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See Notes to Financial Statements.

BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND

JUNE 30, 2015

N-CSRS 1 d936218dncsrs.htm MASTER INVESTMENT PORTFOLIO MASTER INVESTMENT PORTFOLIO

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: 811-07332 and 811-08162

Name of Fund: BlackRock Funds III

BlackRock Cash Funds: Institutional

BlackRock Cash Funds: Prime

BlackRock Cash Funds: Treasury

BlackRock CoreAlpha Bond Fund

BlackRock Large Cap Index Fund (Formerly Russell 1000® Index Fund)

BlackRock LifePath® Retirement Fund (Formerly LifePath® Retirement Portfolio)

BlackRock LifePath® 2020 Fund (Formerly LifePath 2020 Portfolio®)

BlackRock LifePath® 2025 Fund (Formerly LifePath® 2025 Portfolio)

BlackRock LifePath® 2030 Fund (Formerly LifePath 2030 Portfolio®)

BlackRock LifePath® 2035 Fund (Formerly LifePath® 2035 Portfolio)

BlackRock LifePath® 2040 Fund (Formerly LifePath 2040 Portfolio®)

BlackRock LifePath® 2045 Fund (Formerly LifePath® 2045 Portfolio)

BlackRock LifePath® 2050 Fund (Formerly LifePath® 2050 Portfolio)

BlackRock LifePath® 2055 Fund (Formerly LifePath® 2055 Portfolio)

BlackRock LifePath® Index Retirement Fund (Formerly LifePath® Index Retirement Portfolio)

BlackRock LifePath® Index 2020 Fund (Formerly LifePath® Index 2020 Portfolio)

BlackRock LifePath® Index 2025 Fund (Formerly LifePath® Index 2025 Portfolio)

BlackRock LifePath® Index 2030 Fund (Formerly LifePath® Index 2030 Portfolio)

BlackRock LifePath® Index 2035 Fund (Formerly LifePath® Index 2035 Portfolio)

BlackRock LifePath® Index 2040 Fund (Formerly LifePath® Index 2040 Portfolio)

BlackRock LifePath® Index 2045 Fund (Formerly LifePath® Index 2045 Portfolio)

BlackRock LifePath® Index 2050 Fund (Formerly LifePath® Index 2050 Portfolio)

BlackRock LifePath® Index 2055 Fund (Formerly LifePath® Index 2055 Portfolio)

BlackRock S&P 500 Index Fund (Formerly S&P 500 Stock Fund)

BlackRock Total International ex U.S. Index Fund (Formerly ACWI ex-US Index Fund)

BlackRock U.S. Total Bond Index Fund (Formerly Bond Index Fund)

Master Investment Portfolio

Active Stock Master Portfolio

CoreAlpha Bond Master Portfolio

International Tilts Master Portfolio

Large Cap Index Master Portfolio (Formerly Russell 1000® Index Master Portfolio)

LifePath® Retirement Master Portfolio

LifePath® 2020 Master Portfolio

LifePath® 2025 Master Portfolio

LifePath® 2030 Master Portfolio

LifePath® 2035 Master Portfolio

LifePath® 2040 Master Portfolio

LifePath® 2045 Master Portfolio

LifePath® 2050 Master Portfolio

LifePath® 2055 Master Portfolio

LifePath® Index Retirement Master Portfolio

LifePath® Index 2020 Master Portfolio

LifePath® Index 2025 Master Portfolio

LifePath® Index 2030 Master Portfolio

LifePath® Index 2035 Master Portfolio

LifePath® Index 2040 Master Portfolio

LifePath® Index 2045 Master Portfolio

LifePath® Index 2050 Master Portfolio

LifePath® Index 2055 Master Portfolio

Money Market Master Portfolio

Prime Money Market Master Portfolio

S&P 500 Index Master Portfolio (Formerly S&P 500 Stock Master Portfolio)

Total International ex U.S. Index Master Portfolio (Formerly ACWI ex-US Index Master Portfolio

Treasury Money Market Master Portfolio

U.S. Total Bond Index Master Portfolio (Formerly Bond Index Master Portfolio)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

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

Master Investment Portfolio, 55 East 52^nd Street, New York, NY 10055

Registrants’ telephone number, including area code: (800) 537-4942

Date of fiscal year end: 12/31/2015

Date of reporting period: 06/30/2015

Item 1 – Report to Stockholders

JUNE 30, 2015

SEMI-ANNUAL REPORT (UNAUDITED)

BlackRock Total International ex U.S. Index Fund | of BlackRock Funds III

Not FDIC Insured • May Lose Value • No Bank Guarantee


Table of Contents


	Page
The Markets in Review		3
Semi-Annual Report:
Fund Summary		4
About Fund Performance		6
Disclosure of Expenses		6
Derivative Financial Instruments		6
Fund Financial Statements:
Statement of Assets and Liabilities		7
Statement of Operations		8
Statements of Changes in Net Assets		9
Fund Financial Highlights		10
Fund Notes to Financial Statements		13
Master Portfolio Information		16
Master Portfolio Financial Statements:
Schedule of Investments		17
Statement of Assets and Liabilities		36
Statement of Operations		37
Statements of Changes in Net Assets		38
Master Portfolio Financial Highlights		39
Master Portfolio Notes to Financial Statements		40
Disclosure of Investment Advisory Agreement		47
Officers and Trustees		52
Additional Information		53

LOGO



2	BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015

The Markets in Review

Dear Shareholder,

During the 12-month period ended June 30, 2015, market volatility increased from the remarkably low levels seen in recent years, although it remained below the historical average. In the middle of 2014, geopolitical tensions intensified in Ukraine and the Middle East and oil prices became highly volatile, stoking worries about economic growth outside the United States. The U.S. economy, however, was showing improvement, which made investors concerned that the U.S. Federal Reserve (the “Fed”) would raise short-term rates sooner than previously anticipated. The U.S. dollar appreciated and global credit markets tightened, ultimately putting a strain on investor flows.

In the fourth quarter, U.S. growth picked up considerably while the broader global economy showed more signs of slowing. This, combined with rising global risks, drove investors to the relative stability of U.S. assets. International markets continued to struggle even as the European Central Bank (“ECB”) and the Bank of Japan eased monetary policy. Oil prices plummeted due to a global supply-and-demand imbalance, sparking a selloff in energy-related assets and putting stress on emerging markets. Fixed income investors piled into U.S. Treasuries despite their persistently low yields, which had become attractive as compared to the even lower yields on international sovereign debt.

Equity markets reversed in early 2015, with international markets outperforming the United States as global risks abated. Investors had held high expectations for the U.S. economy, but a harsh winter and west coast port strike brought disappointing first-quarter data and high valuations took their toll on U.S. stocks, while bond yields fell to extreme lows. (Bond prices rise as yields fall.) In contrast, economic reports in Europe and Asia easily beat investors’ very low expectations, and accommodative policies from central banks in those regions helped international equities rebound. Oil prices stabilized, providing some relief for emerging market stocks, although a stronger U.S. dollar continued to be a headwind for the asset class.

U.S. economic data regained momentum in the second quarter, helping U.S. stocks resume an upward path. However, meaningful strength in the labor market underscored the likelihood that the Fed would raise short-term rates before the end of 2015 and bond yields moved swiftly higher. The period ended on a downbeat, but temporary, note as Greece’s long-brewing debt troubles came to an impasse. As the drama unfolded around the tumultuous negotiations between Greece and its creditors, investors feared the possibility of Greece leaving the euro zone and the impact such an event might have on global markets. Most asset classes broadly sold off, especially in Europe, even while macroeconomic and company fundamentals continued to improve.

At BlackRock, we believe investors need to think globally, extend their scope across a broad array of asset classes and be prepared to move freely as market conditions change over time. 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 June 30, 2015
	6-month			12-month
U.S. large cap equities (S&P 500^® Index)		1.23	%		7.42	%
U.S. small cap equities (Russell 2000^® Index)		4.75			6.49
International equities (MSCI Europe, Australasia, Far East Index)		5.52			(4.22	)
Emerging market equities (MSCI Emerging Markets Index)		2.95			(5.12	)
3-month Treasury bills (BofA Merrill Lynch 3-Month U.S. Treasury Bill Index)		0.01			0.02
U.S. Treasury securities (BofA Merrill Lynch 10-Year U.S. Treasury Index)		(0.51	)		3.79
U.S. investment-grade bonds (Barclays U.S. Aggregate Bond Index)		(0.10	)		1.86
Tax-exempt municipal bonds (S&P Municipal Bond Index)		0.01			3.00
U.S. high yield bonds (Barclays U.S. Corporate High Yield 2% Issuer Capped Index)		2.53			(0.39	)
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.



		THIS PAGE NOT PART OF YOUR FUND REPORT				3


Fund Summary as of June 30, 2015


Investment Objective

BlackRock Total International ex U.S. Index Fund’s (the “Fund”) (formerly known as BlackRock ACWI ex-U.S. Index Fund) investment objective is to match the performance of the MSCI All Country World ex USA Index (the “MSCI ACWI ex USA Index”) in U.S. dollars with net dividends as closely as possible before the deduction of Fund expenses.


Portfolio Management Commentary

How did the Fund perform?

•

For the six months ended June 30, 2015, the Fund’s Institutional Shares returned 4.34%, Investor A Shares returned 4.37% and Class K Shares returned 4.48%. The benchmark MSCI ACWI ex USA Index returned 4.03% for the same period.

•

Returns for the Fund’s respective share classes differ from the benchmark index due to individual share-class expenses. The Fund invests all of its assets in the Total International ex U.S. Index Master Portfolio (the “Master Portfolio”) (formerly known as ACWI ex-U.S. Index Master Portfolio), a series of Master Investment Portfolio.

Describe the market environment.

•

Japanese stocks experienced a powerful rally during the period, driven largely by increased domestic demand. Japan’s finance leaders effectively encouraged retail investors to take more risk with the introduction of new tax-efficient investment vehicles. In the institutional arena, the Government Pension Investment Fund has been shifting away from Japanese government bonds toward equities and foreign bonds. A weak yen and optimism around the reform of corporate governance policies has also helped stock prices move higher.

•

In Europe, the economic landscape and company fundamentals broadly continued to improve with the support of the European Central Bank’s large asset purchase program. A strong rally in European equity markets in the earlier part of the period was harshly interrupted as the severity of Greece’s debt troubles dominated headlines. European assets came under pressure as the Greek government’s negotiations with the Troika (i.e., the European Commission, European Central Bank and International Monetary Fund) became increasingly erratic leading up to the June 30 expiration of the most recent bailout package. Market volatility spiked when failure to strike a deal resulted in the Greek government putting the Troika’s proposal to a public vote. For the six-month period as a whole, European equities broadly produced positive results, with the strongest performance coming from markets in Denmark, Ireland, Italy and Portugal.

Describe recent portfolio activity.

•

During the period, as changes were made to the composition of the MSCI ACWI ex USA Index, the Master Portfolio purchased and sold securities to maintain its objective of replicating the risks and return of the benchmark index.

Describe portfolio positioning at period end.

•

The Master Portfolio remains positioned to match the risk characteristics of its benchmark index, irrespective of the market’s future direction.

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	BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015


Total Return Based on a $10,000 Investment

LOGO

Assuming transaction costs and other operating expense, including administration fees, if any.

The Fund invests all of its assets in the Master Portfolio. The Master Portfolio will be substantially invested in securities in the MSCI ACWI ex USA Index, and will invest, under normal circumstances, at least 80% of its assets in securities or other financial instruments that are components of or have economic characteristics similar to the securities included in the MSCI ACWI ex USA Index.

The Index is a free float-adjusted market capitalization index designed to measure the combined equity market performance of developed and emerging market countries, excluding the United States.

⁴

Commencement of operations.


Performance Summary for the Period Ended June 30, 2015


	6-Month Total Returns			Average Annual Total Returns⁵
	6-Month Total Returns			1 Year			Since Inception⁶
Institutional		4.34	%		(5.61	)%		1.98	%
Investor A		4.37			(5.79	)		1.73
Class K		4.48			(5.53	)		2.58
MSCI ACWI ex USA Index		4.03			(5.26	)		2.87

⁵

See “About Fund Performance” on page 6 for a detailed description of share classes, including any related sales charges and fees.

⁶

The Fund commenced operations on June 30, 2011.

Past performance is not indicative of future results.


Expense Example


	Actual						Hypothetical⁷
	Beginning Account Value January 1, 2015		Ending Account Value June 30, 2015		Expenses Paid During the Period⁶		Beginning Account Value January 1, 2015		Ending Account Value June 30, 2015		Expenses Paid During the Period⁶		Annualized Expense Ratio
Institutional	$	1,000.00	$	1,043.40	$	0.86	$	1,000.00	$	1,023.95	$	0.85		0.17	%
Investor A	$	1,000.00	$	1,043.70	$	2.13	$	1,000.00	$	1,022.71	$	2.11		0.42	%
Class K	$	1,000.00	$	1,044.80	$	0.71	$	1,000.00	$	1,024.10	$	0.70		0.14	%

⁶

For each class of the Fund, expenses are equal to the annualized net expense ratio for the class, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period shown). Because the Fund invests all of its assets in the Master Portfolio, the expense example reflects the net expenses of both the Fund and the Master Portfolio in which it invests.

⁷

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

See “Disclosure of Expenses” on page 6 for further information on how expenses were calculated.



BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015	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.

•

Performance information reflects past performance and does not guarantee future results. Current performance may be lower or higher than the performance data quoted. Refer to www.blackrock.com/funds 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. 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 administration and distribution fees applicable to each class, which are deducted from the income available to be paid to shareholders. The Fund’s administrator has contractually agreed to waive and/or reimburse a portion of the Fund’s expenses. Without such waiver and/or reimbursement, the Fund’s performance would have been lower. The administrator is under no obligation to continue waiving and/or reimbursing its fees after the applicable termination date of such agreement. See Note 3 of 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 administration fees, service and distribution fees, including 12b-1 fees, acquired fund fees and expenses and other Fund expenses. The expense example on the previous page (which is based on a hypothetical investment of $1,000 invested on January 1, 2015 and held through June 30, 2015) 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 any 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.


Derivative Financial Instruments

The Master Portfolio may invest in various derivative financial instruments. Derivative financial instruments are used to obtain exposure to a security, index and/or market without owning or taking physical custody of securities or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage. Derivative financial instruments also involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the derivative financial instrument. The Master Portfolio’s ability to use a derivative financial instrument successfully depends on the investment advisor’s ability to predict pertinent market movements accurately, which cannot be assured. The use of derivative financial instruments may result in losses greater than if they had not been used, may limit the amount of appreciation the Master Portfolio can realize on an investment and/or may result in lower distributions paid to shareholders. The Master Portfolio’s investments in these instruments are discussed in detail in the Notes to Financial Statements.



6	BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015


Statement of Assets and Liabilities		BlackRock Total International ex U.S. Index Fund


June 30, 2015 (Unaudited)

Assets
Investments at value — Master Portfolio (cost — $28,963,786)	$	33,153,849
Receivables:
Capital shares sold		231,259
From advisor		32,258
Prepaid expenses		34,762

Total assets		33,452,128


Liabilities
Payables:
Contributions to the Master Portfolio		231,136
Professional fees		35,857
Service fees		382
Capital shares redeemed		123
Income dividends		44,473
Capital gains distributions		25,153
Officer’s fees		6
Other accrued expenses payable		15,587

Total liabilities		352,717

Net Assets	$	33,099,411


Net Assets Consist of
Paid-in capital	$	32,271,950
Distributions in excess of net investment income		(79,257	)
Accumulated net realized loss allocated from the Master Portfolio		(3,283,345	)
Net unrealized appreciation (depreciation) allocated from the Master Portfolio		4,190,063

Net Assets	$	33,099,411


Net Asset Value
Institutional — Based on net assets of $23,873,328 and 2,771,520 shares outstanding, unlimited number of shares authorized, no par value	$	8.61

Investor A — Based on net assets of $1,856,727 and 215,947 shares outstanding, unlimited number of shares authorized, no par value	$	8.60

Class K — Based on net assets of $7,369,356 and 832,933 shares outstanding, unlimited number of shares authorized, no par value	$	8.85


Statement of Operations		BlackRock Total International ex U.S. Index Fund


Six Months Ended June 30, 2015 (Unaudited)

Investment Income
Net investment income allocated from the Master Portfolio:
Dividends	$	581,801
Securities lending — affiliated — net		6,950
Interest — affiliated		361
Expenses		(12,625	)
Foreign taxes withheld		(74,743	)
Fees waived		908

Total income		502,652


Fund Expenses
Administration		3,138
Service — Investor A		1,882
Transfer agent — Institutional		3,657
Transfer agent — investor A		256
Professional		30,322
Registration		24,004
Printing		9,768
Miscellaneous		4,307

Total expenses		77,334
Less administration fees waived		(3,726	)
Less transfer agent fees waived — Institutional		(10	)
Less transfer agent fees waived — Investor A		(31	)
Less fees reimbursed by administrator		(60,237	)

Total expenses after fees waived and/or reimbursed		13,330

Net investment income		489,322


Realized and Unrealized Gain (Loss) Allocation from the Master Portfolio
Net realized gain from investments, financial futures contracts and foreign currency transactions		62,935

Net change in unrealized appreciation (depreciation) on investments, financial futures contracts and foreign currency translations		223,527

Total realized and unrealized gain		286,462

Net Increase in Net Assets Resulting from Operations	$	775,784


Statements of Changes in Net Assets


	BlackRock Total International ex U.S. Index Fund
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	489,322		$	505,648
Net realized gain		62,935			2,081,148
Net change in unrealized appreciation (depreciation)		223,527			(3,625,915	)

Net increase (decrease) in net assets resulting from operations		775,784			(1,039,119	)


Distributions to Shareholders From¹
Net investment income:
Institutional		(341,722	)		(471,088	)
Investor A		(26,921	)		(3,912	)
Class K		(111,433	)		(33,598
Net realized gain:
Institutional		(133,575	)		(1,639,808	)
Investor A		(10,321	)		(31,240	)
Class K		(39,404	)		(476,304	)

Decrease in net assets resulting from distributions to shareholders		(663,376	)		(2,655,950	)


Capital Share Transactions
Net increase in net assets derived from capital share transactions		8,967,205			12,556,607


Net Assets
Total increase in net assets		9,079,613			8,861,538
Beginning of period		24,019,798			15,158,260

End of period	$	33,099,411		$	24,019,798

Distributions in excess of net investment income, end of period	$	(79,257	)	$	(88,503	)

¹Distributions for annual periods determined in accordance with federal income tax regulations.


Financial Highlights		BlackRock Total International ex U.S. Index Fund


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period from June 30, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period from June 30, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	8.43		$	10.06		$	9.06		$	8.13		$	10.00

Net investment income²		0.15			0.30			0.22			0.17			0.08
Net realized and unrealized gain (loss)		0.22			(0.75	)		1.02			1.16			(1.89	)

Net increase (decrease) from investment operations		0.37			(0.45	)		1.24			1.33			(1.81	)

Distributions from:³
Net investment income		(0.14	)		(0.29	)		(0.24	)		(0.40	)		(0.04	)
Net realized gain		(0.05	)		(0.89	)		—			—			(0.02	)
Return of capital		—			—			—			(0.00	)⁴		—

Total distributions		(0.19	)		(1.18	)		(0.24	)		(0.40	)		(0.06	)

Net asset value, end of period	$	8.61		$	8.43		$	10.06		$	9.06		$	8.13


Total Return⁵
Based on net asset value		4.34%	⁶		(4.78)%			13.94%			16.61%			(18.05)%	⁶


Ratios to Average Net Assets⁷
Total expenses⁸		0.62%	⁹		0.83%	¹⁰		1.25%			0.75%			2.04%	^9,11

Total expenses after fees waived and/or reimbursed⁸		0.17%	⁹		0.21%	¹⁰		0.35%			0.34%			0.37%	⁹

Net investment income⁸		3.41%	⁹		3.00%	¹⁰		2.35%			1.95%			1.78%	⁹


Supplemental Data
Net assets, end of period (000)	$	23,873		$	17,380		$	15,013		$	9,602		$	46

Portfolio turnover rate of the Master Portfolio		3%			49%			36%			42%			4%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income.

⁸

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.01%, 0.03%, 0.01%, 0.08% and 1.14% for the six months ended June 30, 2015, the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁹

Annualized.

¹⁰

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.01%.

¹¹

Organization costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 2.08%.


Financial Highlights (continued)		BlackRock Total International ex U.S. Index Fund


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period from June 30, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period from June 30, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	8.41		$	10.06		$	9.06		$	8.13		$	10.00

Net investment income²		0.16			0.22			0.21			0.19			0.08
Net realized and unrealized gain (loss)		0.21			(0.71	)		1.00			1.12			(1.89	)

Net increase (decrease) from investment operations		0.37			(0.49	)		1.21			1.31			(1.81	)

Distributions from:³
Net investment income		(0.13	)		(0.27	)		(0.21	)		(0.38	)		(0.04	)
Net realized gain		(0.05	)		(0.89	)		—			—			—
Return of capital		—			—			—			(0.00	)⁴		(0.02	)

Total distributions		(0.18	)		(1.16	)		(0.21	)		(0.38	)		(0.06	)

Net asset value, end of period	$	8.60		$	8.41		$	10.06		$	9.06		$	8.13


Total Return⁵
Based on net asset value		4.37%	⁶		(5.19)%			13.63%			16.31%			(18.11)%	⁶


Ratios to Average Net Assets⁷
Total expenses⁸		0.86%	⁹		1.30%	¹⁰		1.91%			1.88%			2.30%	^9,11

Total expenses after fees waived and/or reimbursed⁸		0.42%	⁹		0.46%	¹⁰		0.64%			0.63%			0.62%	⁹

Net investment income⁸		3.56%	⁹		2.28%	¹⁰		2.21%			2.18%			1.74%	⁹


Supplemental Data
Net assets, end of period (000)	$	1,857		$	372		$	65		$	39		$	20

Portfolio turnover rate of the Master Portfolio		3%			49%			36%			42%			4%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income.

⁸

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.01%, 0.03%, 0.01%, 0.16% and 1.14% for the six months ended June 30, 2015, the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁹

Annualized.

¹⁰

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.01%.

¹¹

Organization costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 2.36%.


Financial Highlights (concluded)		BlackRock Total International ex U.S. Index Fund


	Class K
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period from June 30, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period from June 30, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	8.65		$	10.30		$	9.27		$	8.13		$	10.00

Net investment income²		0.16			0.19			0.23			0.28			0.09
Net realized and unrealized gain (loss)		0.23			(0.65	)		1.04			1.27			(1.90	)

Net increase (decrease) from investment operations		0.39			(0.46	)		1.27			1.55			(1.81	)

Distributions from:³
Net investment income		(0.14	)		(0.30	)		(0.24	)		(0.41	)		(0.04	)
Net realized gain		(0.05	)		(0.89	)		—			—			—
Return of capital		—			—			—			(0.00	)⁴		(0.02	)

Total distributions		(0.19	)		(1.19	)		(0.24	)		(0.41	)		(0.06	)

Net asset value, end of period	$	8.85		$	8.65		$	10.30		$	9.27		$	8.13


Total Return⁵
Based on net asset value		4.48%	⁶		(4.84)%			13.96%			19.25%			(18.04)%	⁶


Ratio to Average Net Assets⁷
Total expenses⁸		0.59%	⁹		0.81%	¹⁰		1.36%			1.80%			1.73%	^9,11

Total expenses after fees waived and/or reimbursed⁸		0.14%	⁹		0.15%	¹⁰		0.34%			0.33%			0.32%	⁹

Net investment income⁸		3.45%	⁹		2.02%	¹⁰		2.40%			3.31%			2.03%	⁹


Supplemental Data
Net assets, end of period (000)	$	7,369		$	6,267		$	80		$	50		$	16,224

Portfolio turnover rate of the Master Portfolio		3%			49%			36%			42%			4%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income.

⁸

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.01%, 0.03%, 0.01%, 0.29% and 1.14% for the six months ended June 30, 2015, the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁹

Annualized.

¹⁰

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.01%.

¹¹

Organization costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 1.79%.


Notes to Financial Statements (Unaudited)				BlackRock Total International ex U.S. Index Fund

1. Organization:

BlackRock Total International ex U.S. Index Fund (the “Fund”) (formerly known as BlackRock ACWI ex-U.S. Index Fund), a series of BlackRock Funds III (the “Trust”), is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a non-diversified, open-end management investment company. The Trust is organized as a Delaware statutory trust. The Fund seeks to achieve its investment objective by investing all of its assets in Total International ex U.S. Index Master Portfolio (the “Master Portfolio”) (formerly known as BlackRock ACWI ex-U.S. Index Master Portfolio), a series of Master Investment Portfolio (“MIP”), an affiliate of the Fund, which has the same investment objective and strategies as the Fund. The value of the Fund’s investment in the Master Portfolio reflects the Fund’s proportionate interest in the net assets of the Master Portfolio. The performance of the Fund is directly affected by the performance of the Master Portfolio. At June 30, 2015, the percentage of the Master Portfolio owned by the Fund was 4.3%. The financial statements of the Master Portfolio, including the Schedule of Investments, are included elsewhere in this report and should be read in conjunction with the Fund’s financial statements.

The Fund offers multiple classes of shares. Institutional and Class K Shares are sold without a sales charge and only to certain eligible investors. Investor A Shares are generally sold without an initial sales charge. All classes of shares have identical voting, dividend, liquidation and other rights and are subject to the same terms and conditions. Investor A Shares bear certain expenses related to shareholder servicing of such shares. Investor A Shares are generally available through financial intermediaries. Each class has exclusive voting rights with respect to matters relating to its shareholder servicing and distribution expenditures. The Board of Trustees of the Fund and Board of Trustees of the Master Portfolio are referred to throughout this report as the “Board of Trustees” or the “Board” and the members are referred to as “Trustees.”

The Fund, together with certain other registered companies advised by BlackRock Advisors (“BFA” or the “Manager”) or its affiliates, is included in a complex of open-end funds referred to as the Equity Liquidity Complex.

2. Significant Accounting Policies:

The Fund’s 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 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. The following is a summary of significant accounting policies followed by the Fund:

Valuation: The Fund’s investments are valued at fair value as of the close of trading on the New York Stock Exchange (“NYSE”) (generally 4:00 p.m., Eastern time). U.S. GAAP defines fair value as the price the 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’s policy is to fair value its financial instruments at market value. The Fund records its investment in the Master Portfolio at fair value based on the Fund’s proportionate interest in the net assets of the Master Portfolio. Valuation of securities held by the Master Portfolio is discussed in Note 2 of the Master Portfolio’s Notes to Financial Statements, which are included elsewhere in this report.

Investment Transactions and Investment Income: For financial reporting purposes, contributions to and withdrawals from the Master Portfolio are accounted on a trade date basis. The Fund records daily its proportionate share of the Master Portfolio’s income, expenses and realized and unrealized gains and losses. Realized and unrealized gains and losses are adjusted utilizing partnership tax allocation rules. In addition, the Fund accrues its own expenses. Income, expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.

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

Other: Expenses directly related to the Fund or its classes are charged to the Fund or the applicable class. 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. 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.

3. Administration Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock, Inc. (“BlackRock”) for 1940 Act purposes.



BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015	13


Notes to Financial Statements (continued)		BlackRock Total International ex U.S. Index Fund

April 30, 2015, for such services, the Fund pays the BAL a monthly fee at an annual rate of 0.01% of the average daily value of the Fund’s net assets. Prior to April 30, 2015, the Fund paid BAL a monthly fee at an annual rate of 0.03% of the average daily net assets of the Fund. The Fund does not pay an investment advisory fee or investment management fee.

BFA, the investment advisor for the Master Portfolio, and BAL 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 expense not included in the ordinary course of the Fund’s business. The expense limitation as a percentage of average daily net assets is as follows:


	Institutional		Investor A		Class K
Rate		0.17%		0.42%		0.12%

Prior to April 30, 2015, the expense limitation, as a percentage of average daily net assets was as follows:


	Institutional		Investor A		Class K
Rate		0.20%		0.45%		0.15%

BFA and BAL have agreed not to reduce or discontinue this contractual waiver or reimbursement prior to May 1, 2016, unless approved by the Board, including a majority of the Independent Trustees. These amounts are shown as, or included in, administration fees waived, transfer agent fees waived — class specific, transfer agent fees reimbursed — class specific and fees reimbursed by administrator in the Statements of Operations.

If during the Fund’s fiscal year the operating expenses of a share class, that at any time during the prior two fiscal years received a waiver or reimbursement from BFA or BAL, as applicable, are less than the expense limit for that share class, BFA or BAL are entitled to be reimbursed by such share class up to the lesser of (a) the amount of fees waived or expenses reimbursed during those prior two fiscal years under the agreement and (b) the amount by which the expense limit for that share class exceeds the operating expenses of the share class for the current fiscal year, provided that: (1) the Fund, of which the share class is a part, has more than $50 million in assets for the fiscal year and (2) BFA or BAL, or an affiliate, continues to serve as the Fund’s investment advisor or administrator. In the event the expense limit for a share class is changed subsequent to a fiscal year in which BFA or BAL, as applicable, becomes entitled to reimbursement for fees waived or reimbursed, the amount available to reimburse BFA or BAL, as applicable, shall be calculated by reference to the expense limit for that share class in effect at the time BFA or BAL became entitled to receive such reimbursement, rather than the subsequently changed expense limit for that share class.

For the six months ended June 30, 2015, BAL and BFA did not recoup any Fund level or class specific waivers and/or reimbursements previously recorded by the Fund.

On June 30, 2015, the Fund level and class specific waivers and/or reimbursements subject to possible future recoupment under the expense limitation agreement are as follows:


	Expiring December 31,
	2015		2016		2017
Fund level	$	102,028	$	102,174	$	63,693
Institutional	$	1,488	$	3,355	$	10
Investor A	$	164	$	339	$	31
Class K	$	84	$	18		—

The Trust, on behalf of the Fund, entered into a Distribution Agreement and Investor A Shares Distribution Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of BlackRock. Pursuant to the Distribution 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 rate of 0.25% based upon the average daily net assets of the Investor A Shares.

Pursuant to sub-agreements with BRIL, broker-dealers and 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 Investor A shareholders.



14	BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015


Notes to Financial Statements (concluded)				BlackRock Total International ex U.S. Index Fund

BAL maintains a call center, which is responsible for providing certain shareholder services to the Fund, such as responding to shareholder inquiries and processing transactions based upon instructions from shareholders with respect to the subscription and redemption of Fund shares. For the six months ended June 30, 2015, the Fund reimbursed BAL 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		Class K
	—	$	9		—

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

4. 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 their taxable income to their shareholders. Therefore, no 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 remains open for each of the three years ended December 31, 2014 and the period ended December 31, 2011. 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 June 30, 2015, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Fund’s financial statements.

5. Capital Share Transactions:

Transactions in capital shares for each class were as follows:


	Six Months Ended June 30, 2015						Year Ended December 31, 2014
	Shares			Amount			Shares			Amount
Institutional
Shares sold		799,112		$	7,316,467			489,164		$	4,780,732
Shares issued to shareholders in reinvestment of distributions		51,581			445,080			236,533			2,110,279
Shares redeemed		(142,063	)		(1,248,641	)		(154,562	)		(1,526,584	)

Net increase		708,630		$	6,512,906			571,135		$	5,364,427


Investor A
Shares sold		184,863		$	1,592,070			36,520		$	345,700
Shares issued to shareholders in reinvestment of distributions		4,320			37,242			3,748			32,243
Shares redeemed		(17,508	)		(155,393	)		(2,444	)		(24,614	)

Net increase		171,675		$	1,473,919			37,824		$	353,329


Class K
Shares sold		278,335		$	2,516,078			697,040		$	6,707,086
Shares issued to shareholders in reinvestment of distributions		17,007			150,837			58,087			506,140
Shares redeemed		(187,108	)		(1,686,535	)		(38,209	)		(374,375	)

Net increase		108,234			980,380			716,918			6,838,851

Total Net Increase		988,539		$	8,967,205			1,325,877		$	12,556,607

6. Subsequent Events:

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



BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015	15


Master Portfolio Information		Total International ex U.S. Index Master Portfolio

As of June 30, 2015


Ten Largest Holdings		Percent of Long-Term Investments


Nestlé SA, Registered Shares	1	%
Novartis AG, Registered Shares	1
Roche Holding AG	1
Toyota Motor Corp.	1
HSBC Holdings PLC	1
Samsung Electronics Co. Ltd.	1
BP PLC	1
Sanofi	1
Taiwan Semiconductor Manufacturing Co. Ltd.	1
Bayer AG, Registered Shares	1


Geographic Allocation		Percent of Long-Term Investments


Japan	16	%
United Kingdom	13
Switzerland	7
France	7
Canada	7
Germany	6
Australia	5
China	4
Hong Kong	4
South Korea	3
Netherlands	3
Taiwan	3
Spain	3
Sweden	2
South Africa	2
India	2
Brazil	2
Italy	2
Other¹	9

Other includes a 1% or less holding in each of the following countries: Austria, Belgium, Chile, Columbia, Czech Republic, Denmark, Egypt, Finland, Greece, Hungary, Indonesia, Ireland, Israel, Luxembourg, Malaysia, Malta, Mexico, New Zealand, Norway, Peru, Philippines, Poland, Portugal, Qatar, Russia, Singapore, Thailand, Turkey and United Arab Emirates.



16	BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015

Schedule of Investments June 30, 2015 (Unaudited)

Total International ex U.S. Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Australia — 4.8%
AGL Energy Ltd.		25,795	$	308,996
Alumina Ltd. (a)		80,719		95,014
Amcor Ltd.		51,838		547,798
AMP Ltd.		140,401		651,504
APA Group		44,511		282,714
Aristocrat Leisure Ltd.		13,448		79,301
Asciano Ltd.		31,432		161,066
ASX Ltd. (a)		9,130		280,787
Aurizon Holdings Ltd.		75,249		297,257
AusNet Services		34,747		37,378
Australia & New Zealand Banking Group Ltd.		115,543		2,867,449
Bank of Queensland Ltd. (a)		19,847		195,284
Bendigo & Adelaide Bank Ltd. (a)		16,747		158,354
BHP Billiton Ltd.		132,317		2,699,111
Boral Ltd.		17,729		79,867
Brambles Ltd.		71,146		580,389
Caltex Australia Ltd.		8,201		201,319
CIMIC Group, Ltd.		1,949		32,650
Coca-Cola Amatil Ltd.		19,681		138,829
Cochlear Ltd.		3,188		197,013
Commonwealth Bank of Australia		67,060		4,397,588
Computershare Ltd.		18,081		162,846
Crown Resorts Ltd. (a)		12,817		120,428
CSL Ltd.		20,686		1,379,061
Dexus Property Group		28,431		159,981
Federation Centres Ltd.		174,986		393,737
Flight Centre Travel Group Ltd. (a)		1,384		36,375
Fortescue Metals Group Ltd. (a)		63,976		94,221
Goodman Group (a)		64,171		309,925
GPT Group (a)		54,780		180,591
Harvey Norman Holdings Ltd.		13,921		48,340
Healthscope Ltd.		26,094		54,640
Iluka Resources Ltd.		34,250		202,544
Incitec Pivot Ltd.		64,383		190,879
Insurance Australia Group Ltd. (a)		120,818		519,442
Lend Lease Group		18,572		214,734
Macquarie Group Ltd.		14,074		881,812
Medibank Pvt, Ltd. (b)		102,248		158,434
Mirvac Group		140,792		200,584
National Australia Bank Ltd.		106,267		2,729,369
Newcrest Mining Ltd. (b)		34,577		348,161
Orica Ltd. (a)		17,936		294,417
Origin Energy Ltd. (a)		49,628		458,031
Platinum Asset Management Ltd.		9,023		52,000
Qantas Airways Ltd. (b)		22,815		55,440
QBE Insurance Group Ltd. (a)		56,479		594,729
Ramsay Health Care Ltd. (a)		7,590		359,522
REA Group Ltd. (a)		1,087		32,787
Rio Tinto Ltd.		20,142		833,209
Common Stocks	Shares		Value
Australia (concluded)
Santos Ltd. (a)		33,767		203,874
Scentre Group		259,267		748,946
Seek Ltd. (a)		11,674		126,508
Sonic Healthcare Ltd.		13,392		220,522
South32, Ltd. (b)		222,708		307,576
Stockland (a)		83,188		262,685
Suncorp Group Ltd.		63,853		660,627
Sydney Airport		37,256		142,958
Tabcorp Holdings Ltd.		54,398		190,678
Tatts Group Ltd.		59,669		171,086
Telstra Corp. Ltd.		182,017		861,404
TPG Telecom Ltd.		14,159		97,799
Transurban Group (a)		90,170		646,483
Treasury Wine Estates Ltd.		43,110		165,556
Wesfarmers Ltd. (a)		48,236		1,450,608
Westfield Corp.		96,369		676,870
Westpac Banking Corp. (a)		128,757		3,185,707
Woodside Petroleum Ltd.		33,078		872,818
Woolworths Ltd. (a)		56,300		1,169,872
WorleyParsons Ltd.		4,265		34,243

				37,552,727
Austria — 0.1%
Andritz AG		2,986		165,353
Erste Group Bank AG (b)		12,316		350,900
OMV AG (a)		7,068		194,580
Raiffeisen Bank International AG (a)		4,478		65,161
Voestalpine AG (a)		4,890		203,802

				979,796
Belgium — 0.9%
Ageas		7,575		292,269
Anheuser-Busch InBev NV		33,195		3,994,697
Belgacom SA		7,467		264,234
Colruyt SA		3,569		160,098
Delhaize Group		3,633		295,498
Groupe Bruxelles Lambert SA		4,624		372,864
KBC Groep NV (b)		10,975		735,743
Solvay SA		3,273		450,906
Telenet Group Holding NV (b)		1,997		108,652
UCB SA		5,627		404,610
Umicore SA		3,627		172,234

				7,251,805
Brazil — 1.6%
AES Tiete SA, Preference Shares		16,600		93,435
AMBEV SA		213,800		1,313,428
B2W Cia Digital (b)		17,200		112,801
Banco Bradesco SA — ADR		35,196		316,743

Portfolio Abbreviations


ADR	American Depositary Receipts	GDR	Global Depositary Receipt	REIT	Real Estate Investment Trust
CVA	Certificaten Van Aandelen (Dutch Certificate)	MSCI	Morgan Stanley Capital International	RTS	Russian Trading System
ETF	Exchange -Traded Fund	NVDR	Non-voting Depository Receipts	S&P	Standard & Poor’s

See Notes to Financial Statements.



BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015	17

Schedule of Investments (continued)

Total International ex U.S. Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Brazil (continued)
Banco Bradesco SA, Preference Shares		103,788	$	951,387
Banco do Brasil SA		36,400		284,260
Banco do Estado do Rio Grande do Sul, Preference Shares		2,900		8,311
Banco Santander Brasil SA		12,700		69,115
BB Seguridade Participacoes SA		29,100		319,163
BM&FBovespa SA		64,700		243,892
BR Malls Participacoes SA		13,700		64,157
Braskem SA, Preference A Shares		11,000		48,188
BRF SA		27,500		580,940
CCR SA		32,500		155,857
Centrais Eletricas Brasileiras SA, Preference ‘B’ Shares		1,600		4,359
CETIP SA — Mercados Organizado		9,411		103,157
Cia Brasileira de Distribuicao Grupo Pao de Acucar, Preference Shares		5,400		127,310
Cia Energetica de Minas Gerais, Preference Shares		24,313		92,745
Cia Energetica de Sao Paulo, Preference ‘B’ Shares		4,000		25,229
Cia Paranaense de Energia, Preference ‘B’ Shares		11,500		129,274
Cielo SA		31,632		445,825
Companhia de Saneamento Basico do Estado de Sao Paulo		7,000		37,149
Companhia Siderurgica Nacional SA		48,700		80,981
Cosan SA Industria e Comercio		1,800		14,560
CPFL Energia SA		3,715		23,001
Cyrela Brazil Realty SA		6,700		21,334
Duratex SA		5,621		13,125
EcoRodovias Infraestrutura e Logistica SA		5,600		13,959
EDP — Energias do Brasil SA		900		3,332
Embraer SA		24,800		188,726
Estacio Participacoes SA		21,100		122,158
Fibria Celulose SA		10,300		140,531
Gerdau SA, Preference Shares		30,600		73,717
Hypermarcas SA (b)		19,300		140,478
Itau Unibanco Holding SA, Preference Shares		123,223		1,356,242
Itausa — Investimentos Itau SA, Preference Shares		135,712		388,921
JBS SA		31,400		165,226
Klabin SA, Preference Shares		22,200		136,309
Kroton Educacional SA		47,568		181,912
Localiza Rent a Car SA		2,940		29,021
Lojas Americanas SA		6,000		25,570
Lojas Americanas SA, Preference Shares		12,320		68,711
Lojas Renner SA		4,300		156,283
M Dias Branco SA		1,500		39,561
Multiplan Empreendimentos Imobiliarios SA		4,600		70,943
Natura Cosmeticos SA		8,200		72,635
Odontoprev SA		600		2,080
Oi SA, Preference Shares (b)		22,800		42,899
Petroleo Brasileiro SA (b)		124,800		563,167
Petroleo Brasileiro SA, Preference Shares (b)		177,100		723,985
Porto Seguro SA		4,400		58,589
Qualicorp SA		8,500		53,885
Raia Drogasil SA		9,300		119,888
Souza Cruz SA		22,800		179,153
Sul America SA		1,638		7,992
Suzano Papel e Celulose SA, Preference ‘A’ Shares		13,600		72,350
Telefonica Brasil SA, Preference Shares		10,700		149,912
Tim Participacoes SA		41,040		135,168
Totvs SA		3,300		41,395
Tractebel Energia SA		4,600		50,585
Common Stocks	Shares		Value
Brazil (concluded)
Transmissora Alianca de Energia Eletrica SA		3,300		21,844
Ultrapar Participacoes SA		18,600		393,046
Usinas Siderurgicas de Minas Gerais SA, Preference ‘A’ Shares		9,600		12,721
Vale SA		47,800		281,195
Vale SA, Preference Shares		93,800		470,041
Via Varejo SA		2,300		8,308
WEG SA		18,720		114,701

				12,556,865
Canada — 6.5%
Agnico Eagle Mines Ltd.		9,355		265,595
Agrium, Inc. (a)		6,664		706,256
Alimentation Couche Tard, Inc., Class B		17,917		766,458
AltaGas Ltd.		5,249		159,866
ARC Resources Ltd. (a)		10,076		172,639
Atco Ltd. Class I		2,968		93,840
Bank of Montreal (a)		28,066		1,663,062
Bank of Nova Scotia (a)		50,746		2,619,371
Barrick Gold Corp.		40,601		433,966
Baytex Energy Corp. (a)		6,019		93,634
BCE, Inc.		8,439		358,506
BlackBerry Ltd. (a)(b)		17,331		141,673
Bombardier, Inc., Class B (a)		55,865		100,638
Brookfield Asset Management, Inc., Class A		38,235		1,335,929
CAE, Inc.		5,726		68,171
Cameco Corp. (a)		12,619		180,546
Canadian Imperial Bank of Commerce (a)		17,975		1,325,027
Canadian National Railway Co.		34,370		1,982,948
Canadian Natural Resources Ltd. (a)		44,709		1,213,479
Canadian Oil Sands Ltd. (a)		11,879		96,059
Canadian Pacific Railway Ltd.		6,990		1,119,407
Canadian Tire Corp. Ltd., Class A		4,121		440,739
Canadian Utilities Ltd., Class A		3,784		108,976
Catamaran Corp. (b)		10,440		638,019
Cenovus Energy, Inc.		39,944		638,656
CGI Group, Inc., Class A (b)		8,942		349,733
CI Financial Corp. (a)		11,539		310,417
Constellation Software, Inc.		918		364,451
Crescent Point Energy Corp. (a)		17,521		359,538
Dollarama, Inc.		5,029		304,800
Eldorado Gold Corp.		17,582		72,918
Empire Co. Ltd., Class A		2,260		159,177
Enbridge, Inc.		36,746		1,718,442
Encana Corp.		30,957		341,295
Enerplus Corp. (a)		4,790		42,032
Fairfax Financial Holdings Ltd.		1,059		522,191
Finning International, Inc.		3,927		73,855
First Capital Realty, Inc. (a)		2,654		37,993
First Quantum Minerals Ltd.		20,152		263,477
Fortis, Inc.		9,289		260,895
Franco-Nevada Corp.		7,452		355,417
George Weston Ltd.		3,435		269,822
Gildan Activewear, Inc.		10,468		347,732
Goldcorp, Inc.		34,235		555,599
Great-West Lifeco, Inc.		12,321		358,680
H&R Real Estate Investment Trust		2,945		52,911
Husky Energy, Inc.		14,784		282,778
IGM Financial, Inc. (a)		4,062		129,373
Imperial Oil Ltd. (a)		12,316		475,778

See Notes to Financial Statements.



18	BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

Total International ex U.S. Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Canada (concluded)
Industrial Alliance Insurance & Financial Services, Inc.		3,523	$	118,496
Intact Financial Corp.		6,978		484,884
Inter Pipeline Ltd.		13,352		306,807
The Jean Coutu Group PJC, Inc., Class A		3,208		59,588
Keyera Corp.		8,330		278,111
Kinross Gold Corp. (b)		50,110		116,750
Loblaw Cos. Ltd.		11,565		584,084
Magna International, Inc.		18,642		1,046,280
Manulife Financial Corp.		76,127		1,414,658
MEG Energy Corp. (b)		7,620		124,458
Methanex Corp.		4,533		253,035
Metro, Inc.		10,392		278,895
National Bank of Canada		13,702		514,730
Onex Corp.		3,099		171,475
Open Text Corp.		5,660		229,889
Paramount Resources Ltd., Class A (b)		2,674		61,444
Pembina Pipeline Corp.		14,575		471,091
Peyto Exploration & Development Corp. (a)		6,142		150,132
Potash Corp. of Saskatchewan, Inc.		32,913		1,019,275
Power Corp. of Canada		15,481		395,887
Power Financial Corp. (a)		10,065		289,057
PrairieSky Royalty Ltd. (a)		5,018		126,595
Restaurant Brands International, Inc.		8,110		310,829
RioCan Real Estate Investment Trust		3,112		66,700
Rogers Communications, Inc., Class B (a)		14,885		527,947
Royal Bank of Canada		59,196		3,620,008
Saputo, Inc.		10,940		264,610
Shaw Communications, Inc., Class B		13,348		290,685
Silver Wheaton Corp.		17,253		299,061
SNC-Lavalin Group, Inc.		5,688		191,088
Sun Life Financial, Inc.		24,691		824,351
Suncor Energy, Inc. (a)		58,588		1,613,633
Teck Resources Ltd., Class B		19,684		195,107
TELUS Corp.		8,212		282,916
Thomson Reuters Corp.		17,572		669,115
The Toronto-Dominion Bank		76,459		3,246,906
Tourmaline Oil Corp. (b)		6,382		191,716
TransAlta Corp.		5,518		42,766
TransCanada Corp. (a)		31,141		1,265,586
Turquoise Hill Resources Ltd. (b)		24,665		93,802
Valeant Pharmaceuticals International, Inc. (b)		13,432		2,979,667
Veresen, Inc. (a)		9,589		129,670
Vermilion Energy, Inc.		4,033		174,204
West Fraser Timber Co. Ltd.		2,687		147,645
Yamana Gold, Inc.		26,930		81,070

				50,737,467
Chile — 0.3%
AES Gener SA		90,837		51,745
Aguas Andinas SA, Class A		76,400		43,472
Banco de Chile		1,354,736		148,491
Banco de Credito e Inversiones		721		31,697
Banco Santander Chile SA		2,103,327		106,306
Cencosud SA		46,368		111,569
Colbun SA		466,420		132,752
Companhia Cervecerias Unidas SA		4,404		46,739
CorpBanca		2,375,874		26,231
Embotelladora Andina SA, Preference ‘B’ Shares		9,220		31,183
Empresa Nacional de Electricidad SA		139,245		192,844
Empresa Nacional de Telecomunicaciones SA		2,032		22,497
Common Stocks	Shares		Value
Chile (concluded)
Empresas CMPC SA		36,023		98,020
Empresas COPEC SA		16,033		170,275
Enersis SA		884,292		281,109
Latam Airlines Group SA (b)		19,853		141,517
SACI Falabella		35,710		249,505
Sociedad Quimica y Minera de Chile SA, Preference ‘B’ Shares		1,850		29,940
SONDA SA		18,572		38,790
Vina Concha y Toro SA		57,286		99,835

				2,054,517
China — 4.1%
AAC Technologies Holdings, Inc.		39,500		222,752
Agricultural Bank of China Ltd., Class H		802,000		430,846
Air China Ltd., Class H		62,000		70,066
Aluminum Corp. of China Ltd., Class H (b)		64,000		32,009
Anhui Conch Cement Co., Ltd., Class H		79,500		278,547
Anta Sports Products Ltd.		81,000		196,451
AviChina Industry & Technology Co. Ltd., Class H		116,000		113,198
Bank of China Ltd., Class H		3,229,000		2,095,560
Bank of Communications Co. Ltd., Class H		321,700		334,851
BBMG Corp., Class H		39,500		39,941
Beijing Capital International Airport Co. Ltd., Class H		100,000		115,142
Byd Co. Ltd., Class H (a)		18,500		110,843
CGN Power Co. Ltd. (c)		365,000		190,761
China Cinda Asset Management Co. Ltd. (b)		186,000		103,446
China Citic Bank Corp. Ltd., Class H (b)		317,000		252,396
China Coal Energy Co. Ltd., Class H		107,000		63,808
China Communications Construction Co. Ltd., Class H		174,000		259,811
China Communications Services Corp. Ltd., Class H		44,000		22,220
China Conch Venture Holdings, Ltd.		21,500		49,321
China Construction Bank Corp., Class H		3,415,000		3,115,011
China COSCO Holdings Co. Ltd., Class H (a)(b)		78,000		50,293
China Everbright Bank Co. Ltd., Class H		58,000		34,739
China Galaxy Securities Co. Ltd., Class H		132,500		172,220
China Huishan Dairy Holdings Co. Ltd. (a)		107,000		24,413
China International Marine Containers Group Co. Ltd., Class H		41,500		106,647
China Life Insurance Co. Ltd., Class H		302,000		1,310,752
China Longyuan Power Group Corp., Class H		125,000		138,744
China Medical System Holdings Ltd.		109,000		152,710
China Mengniu Dairy Co. Ltd.		52,000		259,277
China Merchants Bank Co. Ltd., Class H		183,078		531,779
China Minsheng Banking Corp. Ltd., Class H		222,900		291,673
China National Building Material Co. Ltd., Class H		132,000		124,632
China Oilfield Services Ltd., Class H		64,000		101,778
China Pacific Insurance Group Co. Ltd., Class H		104,600		501,105
China Petroleum & Chemical Corp. Class H		1,080,400		927,049
China Railway Construction Corp. Ltd., Class H		72,000		111,160
China Railway Group Ltd., Class H		147,000		158,476
China Shenhua Energy Co. Ltd., Class H		123,000		280,124
China Shipping Container Lines Co. Ltd., Class H (b)		122,000		47,589
China Southern Airlines Co. Ltd., Class H (b)		48,000		56,228
China Telecom Corp. Ltd., Class H		594,000		347,906
China Unicom Hong Kong Ltd.		246,000		384,593
China Vanke Co. Ltd., Class H (a)		48,500		119,079
Chongqing Changan Automobile Co. Ltd.		21,400		54,650
Chongqing Rural Commercial Bank, Class H		122,000		97,584

See Notes to Financial Statements.



BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015	19

Schedule of Investments (continued)

Total International ex U.S. Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
China (continued)
CITIC Securities Co. Ltd., Class H (a)		90,500	$	325,528
CNOOC Ltd.		817,000		1,158,895
Country Garden Holdings Co. Ltd.		214,270		94,069
CSPC Pharmaceutical Group Ltd.		154,000		152,058
CSR Corp. Ltd., Class H		222,350		341,128
Datang International Power Generation Co. Ltd., Class H		98,000		50,198
Dongfeng Motor Group Co. Ltd., Class H		80,000		107,175
Evergrande Real Estate Group Ltd. (a)		286,000		170,396
Fosun International Ltd.		81,500		191,658
Great Wall Motor Co. Ltd., Class H		41,000		200,992
Guangzhou Automobile Group Co. Ltd., Class H		52,000		48,095
Guangzhou R&F Properties Co. Ltd., Class H (a)(b)		13,200		16,159
Haitian International Holdings Ltd.		67,000		157,285
Haitong Securities Co. Ltd., Class H		47,200		124,491
Hengan International Group Co. Ltd.		39,000		462,933
Huadian Power International Corp., Ltd.		68,000		75,135
Huaneng Power International, Inc., Class H		122,000		169,794
Huaneng Renewables Corp. Ltd.		158,000		63,709
Industrial & Commercial Bank of China Ltd., Class H		3,199,000		2,538,489
Inner Mongolia Yitai Coal Co., Class B		25,300		36,331
Jiangsu Expressway Co. Ltd., Class H		26,000		34,110
Jiangxi Copper Co. Ltd., Class H		36,000		59,983
Kingsoft Corp. Ltd.		55,000		185,190
Lenovo Group Ltd.		286,000		395,413
Longfor Properties Co. Ltd.		51,500		81,839
Luye Pharma Group, Ltd. (b)		46,500		49,711
New China Life Insurance Co. Ltd., Class H		29,100		173,801
People’s Insurance Co. Group of China Ltd., Class H		272,000		173,889
PetroChina Co. Ltd., Class H		894,000		995,645
PICC Property & Casualty Co. Ltd., Class H		135,532		308,525
Ping An Insurance Group Co. of China Ltd., Class H		108,500		1,464,264
Semiconductor Manufacturing International Corp. (b)		1,051,000		114,565
Shandong Weigao Group Medical Polymer Co. Ltd., Class H		44,000		32,832
Shanghai Electric Group Co. Ltd., Class H (a)		104,000		84,773
Shanghai Fosun Pharmaceutical Group Co., Ltd., Class H		7,000		25,933
Shanghai Pharmaceuticals Holding Co. Ltd., Class H		19,100		53,147
Shenzhou International Group Holdings Ltd.		20,000		97,271
Shui On Land Ltd.		76,666		21,731
Sihuan Pharmaceutical Holdings Group Ltd.		249,000		141,661
Sino-Ocean Land Holdings Ltd.		137,000		103,310
Sinopec Engineering Group Co. Ltd.		13,500		12,491
Sinopec Shanghai Petrochemical Co. Ltd., Class H (b)		123,000		66,522
Sinopharm Group Co. Ltd., Class H		47,200		209,600
Sinotrans Ltd., Class H		45,000		29,963
SOHO China Ltd.		195,000		126,894
Sunac China Holdings Ltd.		149,000		162,941
Tencent Holdings Ltd.		221,600		4,431,228
Tingyi Cayman Islands Holding Corp.		64,000		130,575
Tsingtao Brewery Co. Ltd., Class H (a)		14,000		84,881
Want Want China Holdings Ltd.		339,000		357,926
Weichai Power Co. Ltd., Class H		12,200		40,610
Yanzhou Coal Mining Co. Ltd., Class H		36,000		28,137
Common Stocks	Shares		Value
China (concluded)
Zhejiang Expressway Co. Ltd., Class H		54,000		74,890
Zhuzhou CSR Times Electric Co. Ltd., Class H		25,000		186,876
Zijin Mining Group Co. Ltd., Class H (a)		218,000		76,736
ZTE Corp., Class H		14,400		36,564

				31,621,125
Colombia — 0.1%
Almacenes Exito SA		14,362		125,251
Banco Davivienda SA, Preference Shares		3,212		32,968
Bancolombia SA		15,644		167,536
Cementos Argos SA		38,031		135,032
Corp. Financiera Colombiana SA		1,431		20,049
Ecopetrol SA		184,080		122,239
Grupo Argos SA		6,618		43,185
Grupo Aval Acciones y Valores		125,734		61,535
Grupo de Inversiones Suramericana SA		6,592		93,672
Grupo de Inversiones Suramericana SA, Preference Shares		803		11,219
Interconexion Electrica SA		6,953		19,616
Isagen SA ESP		27,340		29,174

				861,476
Czech Republic — 0.0%
CEZ AS		5,998		139,264
Komercni Banka AS		352		78,030

				217,294
Denmark — 1.2%
A.P. Moeller — Maersk A/S, Class A		162		284,116
A.P. Moeller — Maersk A/S, Class B		320		578,573
Carlsberg A/S, Class B		4,168		377,644
Coloplast A/S, Class B		5,933		389,105
Danske Bank A/S (a)		28,943		850,837
DSV A/S		8,213		265,945
ISS A/S (b)		5,869		193,298
Novo Nordisk A/S, Class B		78,527		4,309,158
Novozymes A/S, Class B		10,852		515,586
Pandora A/S		5,073		544,354
TDC A/S		36,256		265,769
Tryg A/S		5,025		104,771
Vestas Wind Systems A/S		9,527		474,859
William Demant Holding A/S (b)		641		48,900

				9,202,915
Egypt — 0.0%
Commercial International Bank		31,428		230,578
Global Telecom Holding SAE (b)		69,057		22,727
Talaat Moustafa Group		21,412		24,809

				278,114
Finland — 0.6%
Elisa OYJ		5,807		183,983
Fortum OYJ		20,758		368,765
Kone OYJ, Class B (a)		11,837		480,464
Metso OYJ		3,741		102,818
Neste Oil OYJ		5,327		135,892
Nokia OYJ		148,713		1,013,770
Nokian Renkaat OYJ (a)		4,713		147,660
Orion OYJ, Class B		4,256		149,081
Sampo OYJ, Class A		16,388		772,316
Stora Enso OYJ, Class R		20,882		215,194
UPM-Kymmene OYJ		27,594		488,301

See Notes to Financial Statements.



20	BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

Total International ex U.S. Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Finland (concluded)
Wartsila OYJ		6,761	$	316,800

				4,375,044
France — 6.8%
Accor SA		10,752		544,160
Aeroports de Paris		1,132		127,872
Air Liquide SA		13,643		1,731,167
Airbus Group NV		25,270		1,646,019
Alcatel-Lucent (b)		114,729		418,443
Alstom SA (b)		10,571		300,261
ArcelorMittal (a)		50,748		492,844
Arkema		2,229		161,129
AtoS		4,829		360,839
AXA SA		77,544		1,965,883
BNP Paribas SA		43,522		2,641,033
Bollore SA		36,855		197,153
Bouygues SA		6,264		234,189
Bureau Veritas SA		11,737		270,561
Cap Gemini SA		5,778		512,604
Carrefour SA		23,685		761,082
Casino Guichard-Perrachon SA		2,964		224,975
Christian Dior SA		2,083		407,787
Cie Generale des Etablissements Michelin		7,924		833,793
CNP Assurances		7,565		126,613
Compagnie de Saint-Gobain		21,050		950,226
Credit Agricole SA		40,506		604,752
Danone SA		23,337		1,511,640
Dassault Systemes SA		4,519		328,053
Edenred		7,704		190,356
EDF		14,412		322,376
Essilor International SA		8,513		1,019,861
Eurazeo		1,698		112,782
Eutelsat Communications SA		4,668		150,791
Fonciere Des Regions		715		60,832
GDF Suez		62,394		1,161,673
Gecina SA		1,165		143,582
Groupe Eurotunnel SA, Registered Shares		14,767		214,110
Hermes International		1,048		391,302
ICADE		1,426		102,000
Iliad SA		930		206,170
Imerys SA		704		54,006
JCDecaux SA		1,720		71,927
Kering		3,064		547,803
Klepierre		8,312		366,471
L’Oreal SA		10,698		1,914,095
Lafarge SA		8,188		541,366
Lagardere SCA		4,159		121,696
Legrand SA		11,592		652,420
LVMH Moet Hennessy Louis Vuitton SA		11,226		1,973,646
Natixis		34,499		248,991
Numericable-SFR (b)		3,879		205,608
Orange SA		75,476		1,166,432
Pernod Ricard SA		8,977		1,037,762
Peugeot SA (b)		21,557		444,545
Publicis Groupe SA		8,151		604,176
Remy Cointreau SA		2,524		182,349
Renault SA		7,728		810,260
Rexel SA		9,904		159,817
Safran SA		11,757		798,998
Sanofi		50,022		4,948,669
Schneider Electric SE		21,812		1,510,241
Common Stocks	Shares		Value
France (concluded)
SCOR SE		6,039		213,548
SES SA		15,115		508,136
Societe BIC SA		705		112,394
Societe Generale SA		31,479		1,477,113
Sodexo		5,001		476,084
Suez Environnement Co.		14,638		273,277
Technip SA		5,041		312,412
Thales SA		3,616		218,482
Total SA		91,838		4,504,740
Unibail-Rodamco SE		3,862		980,966
Valeo SA		3,128		494,796
Vallourec SA		3,788		77,387
Veolia Environnement SA		20,094		411,414
Vinci SA		19,183		1,113,337
Vivendi SA (b)		51,064		1,294,808
Wendel SA		1,358		166,870
Zodiac Aerospace		9,179		298,995

				52,724,950
Germany — 6.2%
adidas AG		9,348		715,256
Allianz SE, Registered Shares		18,452		2,877,608
Axel Springer AG		2,564		134,660
BASF SE		37,275		3,279,936
Bayer AG, Registered Shares		33,875		4,743,857
Bayerische Motoren Werke AG		13,636		1,493,338
Bayerische Motoren Werke AG, Preference Shares		1,531		129,634
Beiersdorf AG		4,978		417,108
Brenntag AG		5,796		332,583
Commerzbank AG (b)		41,141		525,930
Continental AG		4,539		1,074,732
Daimler AG, Registered Shares		39,165		3,567,759
Deutsche Annington Immobilien SE		22,743		641,761
Deutsche Bank AG, Registered Shares		58,503		1,758,991
Deutsche Boerse AG		9,523		788,767
Deutsche Lufthansa AG, Registered Shares (b)		12,602		162,591
Deutsche Post AG, Registered Shares		41,250		1,205,295
Deutsche Telekom AG, Registered Shares		133,640		2,303,992
Deutsche Wohnen AG, Bearer Shares		10,427		239,048
E.ON SE		90,023		1,200,408
Evonik Industries AG		944		36,045
Fraport AG Frankfurt Airport Services Worldwide		748		46,984
Fresenius Medical Care AG & Co. KGaA		10,417		862,384
Fresenius SE & Co. KGaA		16,555		1,062,936
Fuchs Petrolub SE, Preference Shares		1,552		65,623
GEA Group AG		6,843		305,286
Hannover Rueck SE		3,514		340,108
HeidelbergCement AG		6,698		530,862
Henkel AG & Co. KGaA		5,377		512,729
Henkel AG & Co. KGaA, Preference Shares		7,189		806,721
Hugo Boss AG		3,305		369,486
Infineon Technologies AG		47,282		586,750
K+S AG, Registered Shares		6,648		280,332
Kabel Deutschland Holding AG (b)		984		131,674
Lanxess AG		3,425		202,082
Linde AG		8,017		1,519,328
MAN SE		2,023		208,421
Merck KGaA		5,239		522,277
Metro AG		7,442		235,049
Muenchener Rueckversicherungs AG, Registered Shares		7,817		1,385,909

See Notes to Financial Statements.



BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015	21

Schedule of Investments (continued)

Total International ex U.S. Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Germany (concluded)
Osram Licht AG		3,389	$	162,132
Porsche Automobil Holding SE, Preference Shares		6,556		552,779
ProSiebenSat.1 Media AG, Registered Shares		10,705		528,764
RWE AG		24,137		519,147
SAP AG		39,645		2,778,174
Siemens AG, Registered Shares		32,366		3,274,513
Symrise AG		4,423		274,691
Telefonica Deutschland Holding AG (b)		33,908		195,336
ThyssenKrupp AG		19,076		496,251
TUI AG		16,587		268,382
United Internet AG, Registered Shares		4,712		209,425
Volkswagen AG		1,453		336,437
Volkswagen AG, Preference Shares		6,478		1,503,405

				48,703,676
Greece — 0.1%
Alpha Bank AE (b)		199,078		60,746
Eurobank Ergasias SA (b)		225,111		30,718
FF Group (b)		440		10,090
Hellenic Telecommunications Organization SA		12,770		99,229
JUMBO SA		1,999		14,056
National Bank of Greece SA (b)		51,085		58,091
OPAP SA		8,833		65,373
Piraeus Bank SA (b)		86,435		32,763
Titan Cement Co. SA		990		20,076

				391,142
Hong Kong — 3.5%
AIA Group Ltd.		520,800		3,405,333
Alibaba Health Information Technology Ltd. (b)		176,000		182,702
Alibaba Pictures Group Ltd. (b)		480,000		185,919
ASM Pacific Technology Ltd.		6,300		62,347
Bank of East Asia Ltd.		59,000		257,759
Beijing Enterprises Holdings Ltd.		17,500		131,503
Beijing Enterprises Water Group Ltd. (b)		232,000		190,024
Belle International Holdings Ltd.		150,000		172,804
BOC Hong Kong Holdings Ltd.		143,500		597,254
Brilliance China Automotive Holdings Ltd.		148,000		230,657
Cathay Pacific Airways Ltd.		32,000		78,621
Cheung Kong Infrastructure Holdings Ltd.		29,000		225,110
Cheung Kong Property Holdings, Ltd. (b)		118,008		978,890
China Agri-Industries Holdings Ltd. (b)		43,100		24,529
China Everbright International Ltd.		107,000		191,637
China Everbright Ltd.		66,000		228,546
China Gas Holdings Ltd.		74,000		118,403
China Merchants Holdings International Co. Ltd.		60,000		257,031
China Mobile Ltd.		254,500		3,256,049
China Overseas Land & Investment Ltd.		190,000		668,822
China Power International Development, Ltd.		139,000		105,835
China Resources Cement Holdings Ltd.		90,000		50,163
China Resources Enterprise Ltd.		86,000		276,997
China Resources Gas Group Ltd.		48,000		142,140
China Resources Land Ltd.		107,111		346,649
China Resources Power Holdings Co., Ltd.		64,000		178,371
China State Construction International Holdings Ltd.		70,000		125,929
China Taiping Insurance Holdings Co. Ltd. (b)		67,872		242,994
CITIC Ltd.		82,000		147,054
CK Hutchison Holdings Ltd.		118,008		1,734,951
CLP Holdings Ltd.		86,000		730,918
COSCO Pacific Ltd.		36,000		48,805
ENN Energy Holdings Ltd.		34,000		204,454
Common Stocks	Shares		Value
Hong Kong (concluded)
Far East Horizon Ltd.		141,000		134,006
First Pacific Co. Ltd.		140,000		118,118
Franshion Properties China Ltd.		326,000		116,348
Galaxy Entertainment Group Ltd.		107,000		425,749
GCL-Poly Energy Holdings Ltd. (b)		431,000		99,314
Geely Automobile Holdings Ltd.		365,000		194,588
Goldin Properties Holdings, Ltd. (a)(b)		39,647		41,819
GOME Electrical Appliances Holding Ltd.		627,000		138,171
Guangdong Investment Ltd.		106,000		148,330
Haier Electronics Group Co. Ltd.		48,000		129,240
Hanergy Thin Film Power Group, Ltd. (a)(b)		496,000		138,898
Hang Lung Properties Ltd.		120,000		356,631
Hang Seng Bank Ltd.		32,400		632,803
Henderson Land Development Co. Ltd.		58,850		402,295
HKT Trust & HKT Ltd.		64,900		76,357
Hong Kong & China Gas Co. Ltd.		313,330		656,537
Hong Kong Exchanges & Clearing Ltd.		40,400		1,423,475
Hysan Development Co. Ltd.		25,000		108,262
Kerry Properties Ltd.		16,500		64,677
Kunlun Energy Co. Ltd.		134,000		136,184
Li & Fung Ltd.		250,000		198,193
The Link REIT		112,000		655,416
MGM China Holdings Ltd.		27,200		44,414
MTR Corp.		47,000		218,671
New World China Land Ltd.		214,000		126,218
New World Development Co. Ltd.		280,666		366,731
Nine Dragons Paper Holdings Ltd.		178,000		155,272
NWS Holdings Ltd.		52,186		75,437
PCCW Ltd.		84,000		50,102
Power Assets Holdings Ltd.		61,000		556,161
Sands China Ltd.		99,600		334,736
Shanghai Industrial Holdings, Ltd.		15,000		50,787
Shangri-La Asia Ltd.		32,000		44,616
Shimao Property Holdings Ltd.		51,000		100,393
Sino Biopharmaceutical Ltd.		132,000		153,037
Sino Land Co. Ltd.		112,800		188,276
SJM Holdings Ltd. (a)		69,000		74,606
Sun Art Retail Group Ltd. (a)		110,000		99,051
Sun Hung Kai Properties Ltd.		72,000		1,165,160
Swire Pacific Ltd., Class A		27,000		339,038
Swire Properties Ltd.		42,600		135,872
Techtronic Industries Co.		52,500		171,655
WH Group Ltd. (b)(c)		113,500		77,249
Wharf Holdings Ltd.		73,000		485,125
Wheelock & Co. Ltd.		32,000		163,285
Wynn Macau Ltd.		114,000		189,954
Yue Yuen Industrial Holdings Ltd.		19,000		63,553
Yuexiu Property Co. Ltd.		284,400		61,916

				27,665,926
Hungary — 0.0%
MOL Hungarian Oil & Gas PLC		997		51,013
OTP Bank PLC		11,103		219,440
Richter Gedeon Nyrt		3,173		47,664

				318,117
India — 1.6%
ACC Ltd.		1,747		39,578
Adani Enterprises Ltd.		5,116		7,280
Adani Ports & Special Economic Zone Ltd.		26,485		127,827
Adani Transmissions, Ltd. (b)		5,116		3,791

See Notes to Financial Statements.



22	BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

Total International ex U.S. Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
India (continued)
Aditya Birla Nuvo Ltd.		1,463	$	41,014
Ambuja Cements Ltd.		26,422		95,293
Apollo Hospitals Enterprise Ltd.		8,931		184,326
Asian Paints Ltd.		11,155		132,209
Aurobindo Pharma Ltd.		6,758		154,018
Bajaj Auto Ltd.		3,253		129,741
Bharat Forge, Ltd.		5,977		99,611
Bharat Heavy Electricals Ltd.		22,772		88,522
Bharat Petroleum Corp. Ltd.		6,728		92,845
Bharti Airtel Ltd.		48,245		317,803
Bharti Infratel, Ltd.		14,205		99,712
Bosch Ltd.		292		100,202
Cairn India Ltd.		17,443		49,707
Cipla Ltd.		13,384		129,226
Coal India Ltd.		26,935		177,938
Container Corp. of India		2,401		63,151
Dabur India Ltd.		20,426		89,740
Divi’s Laboratories Ltd.		1,544		45,573
DLF Ltd.		16,579		30,289
Dr. Reddy’s Laboratories Ltd. — ADR		4,517		249,880
Eicher Motors, Ltd.		438		134,565
GAIL India Ltd.		12,294		75,715
GlaxoSmithKline Consumer Healthcare Ltd.		391		38,511
Godrej Consumer Products Ltd.		4,619		89,737
HCL Technologies Ltd.		24,000		346,639
Hero MotoCorp Ltd.		1,935		76,656
Hindalco Industries Ltd.		43,227		75,811
Hindustan Unilever Ltd.		29,351		422,426
Housing Development Finance Corp.		64,354		1,309,021
ICICI Bank Ltd. — ADR		20,733		216,038
Idea Cellular Ltd.		41,835		115,499
Infosys Ltd.		200		3,108
Infosys Ltd. — ADR		75,312		1,193,695
ITC Ltd.		96,694		477,944
Jindal Steel & Power Ltd.		14,187		19,130
JSW Steel Ltd.		3,280		44,826
Larsen & Toubro Ltd. — GDR		12,158		338,759
LIC Housing Finance Ltd.		17,978		127,097
Lupin Ltd.		7,610		225,202
Mahindra & Mahindra Financial Services Ltd.		10,804		47,482
Mahindra & Mahindra Ltd. — GDR		13,518		274,415
Marico, Ltd.		11,032		77,783
Motherson Sumi Systems Ltd.		8,204		66,656
Nestle India Ltd.		897		89,477
NTPC Ltd.		63,930		137,984
Oil & Natural Gas Corp. Ltd.		29,850		144,904
Oil India Ltd.		4,661		32,668
Piramal Enterprises Ltd.		8,297		120,918
Power Finance Corp. Ltd.		10,235		41,090
Reliance Communications Ltd. (b)		32,595		31,745
Reliance Industries Ltd. — GDR (c)		27,499		856,594
Rural Electrification Corp., Ltd.		11,484		49,584
Shree Cement Ltd.		231		41,140
Shriram Transport Finance Co. Ltd.		5,718		76,618
Siemens Ltd.		2,761		58,397
State Bank of India — GDR		5,712		236,191
Sun Pharmaceutical Industries Ltd.		39,101		537,025
Tata Consultancy Services Ltd.		20,724		830,180
Tata Motors Ltd. — ADR		6,008		207,096
Tata Power Co. Ltd.		42,988		49,981
Common Stocks	Shares		Value
India (concluded)
Tata Steel Ltd.		11,672		55,695
Tech Mahindra Ltd.		11,300		84,785
UltraTech Cement Ltd.		1,383		64,957
United Breweries Ltd.		2,563		37,527
United Spirits Ltd. (b)		1,690		89,634
UPL Ltd.		13,245		111,236
Vedanta, Ltd., ADR		11,497		124,168
Wipro Ltd. — ADR		18,332		219,434
Zee Entertainment Enterprises Ltd.		20,478		118,193

				12,793,212
Indonesia — 0.5%
Adaro Energy Tbk PT		230,400		13,093
Astra Agro Lestari Tbk PT		11,500		19,753
Astra International Tbk PT		854,400		452,246
Bank Central Asia Tbk PT		515,500		520,592
Bank Danamon Indonesia Tbk PT		186,600		60,118
Bank Mandiri Persero Tbk PT		407,400		306,255
Bank Negara Indonesia Persero Tbk PT		405,600		160,805
Bank Rakyat Indonesia Persero Tbk PT		464,200		359,276
Bumi Serpong Damai Tbk PT		111,800		13,972
Charoen Pokphand Indonesia Tbk PT		271,300		55,822
Global Mediacom Tbk PT		137,600		12,050
Gudang Garam Tbk PT		9,800		33,079
Indocement Tunggal Prakarsa Tbk PT		88,600		138,481
Indofood CBP Sukses Makmur Tbk PT		18,900		17,641
Indofood Sukses Makmur Tbk PT		331,300		163,024
Jasa Marga Persero Tbk PT		71,000		29,076
Kalbe Farma Tbk PT		858,400		107,683
Lippo Karawaci Tbk PT		819,500		72,450
Matahari Department Store Tbk PT		64,300		79,693
Media Nusantara Citra Tbk PT		60,162		8,741
Perusahaan Gas Negara Persero Tbk PT		426,200		137,666
Semen Indonesia Persero Tbk PT		106,000		95,220
Summarecon Agung Tbk PT		493,800		60,362
Surya Citra Media Tbk PT		84,000		18,078
Tambang Batubara Bukit Asam Persero Tbk PT		29,500		18,528
Telekomunikasi Indonesia Persero Tbk PT		2,139,800		469,031
Tower Bersama Infrastructure Tbk PT		38,000		26,293
Unilever Indonesia Tbk PT		62,700		185,361
United Tractors Tbk PT		67,700		103,251
XL Axiata Tbk PT (b)		82,000		22,617

				3,760,257
Ireland — 0.6%
Bank of Ireland (b)		1,235,608		500,170
CRH PLC		31,400		885,258
Experian PLC		41,616		756,928
James Hardie Industries SE		13,437		178,849
Kerry Group PLC, Class A		6,552		486,032
Shire PLC		25,045		2,012,354

				4,819,591
Israel — 0.4%
Azrieli Group		1,500		59,868
Bank Hapoalim BM		66,126		355,887
Bank Leumi Le-Israel BM (b)		44,483		187,963
Bezeq The Israeli Telecommunication Corp. Ltd.		66,621		113,454
Delek Group Ltd.		69		20,344
Israel Chemicals Ltd.		18,197		127,096
The Israel Corp. Ltd.		40		14,118

See Notes to Financial Statements.



BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015	23

Schedule of Investments (continued)

Total International ex U.S. Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Israel (concluded)
Mizrahi Tefahot Bank Ltd. (b)		8,332	$	103,260
NICE Systems Ltd.		2,571		163,289
Teva Pharmaceutical Industries Ltd.		38,301		2,266,574

				3,411,853
Italy — 1.6%
Assicurazioni Generali SpA		45,640		822,605
Atlantia SpA		18,712		462,333
Banca Monte dei Paschi di Siena SpA (b)		108,878		212,151
Banco Popolare SC (b)		14,013		230,732
Enel Green Power SpA		101,500		198,413
Enel SpA		263,756		1,195,419
Eni SpA		107,149		1,903,139
Exor SpA		3,768		179,997
Finmeccanica SpA (b)		15,326		192,787
Intesa Sanpaolo SpA		556,610		2,006,415
Luxottica Group SpA		7,887		524,626
Mediobanca SpA		19,428		190,485
Pirelli & C SpA		9,574		161,582
Prysmian SpA		10,105		218,433
Saipem SpA (a)(b)		17,006		179,704
Snam SpA		108,925		518,376
Telecom Italia SpA (b)		456,952		580,699
Telecom Italia SpA, Non-Convertible Savings Shares		219,492		223,830
Tenaris SA		27,208		366,989
Terna — Rete Elettrica Nazionale SpA		46,233		204,430
UniCredit SpA		180,418		1,212,566
Unione di Banche Italiane SCpA		40,601		325,789
UnipolSai SpA (a)		18,299		45,333

				12,156,833
Japan — 16.0%
ABC-Mart, Inc.		300		18,361
Acom Co. Ltd. (b)		5,700		21,850
Advantest Corp.		12,400		128,930
Aeon Co. Ltd. (a)		36,000		510,843
AEON Financial Service Co. Ltd.		4,000		110,978
Aeon Mall Co. Ltd.		5,190		97,187
Air Water, Inc.		4,000		73,129
Aisin Seiki Co. Ltd.		10,800		459,208
Ajinomoto Co., Inc.		25,000		540,632
Alfresa Holdings Corp.		4,000		62,245
Amada Co. Ltd.		12,700		134,050
ANA Holdings, Inc.		52,000		140,989
Aozora Bank Ltd.		46,000		173,559
Asahi Glass Co. Ltd. (a)		35,000		210,124
Asahi Group Holdings Ltd.		17,700		562,120
Asahi Kasei Corp.		54,000		442,939
Asics Corp. (a)		6,100		157,582
Astellas Pharma, Inc.		92,300		1,314,891
The Bank of Kyoto Ltd.		8,000		92,025
The Bank of Yokohama Ltd.		56,000		342,942
Benesse Holdings, Inc.		1,100		27,576
Bridgestone Corp.		27,300		1,009,078
Brother Industries Ltd.		7,500		106,099
Calbee, Inc.		3,500		147,448
Canon, Inc.		45,000		1,459,727
Casio Computer Co. Ltd. (a)		8,100		159,770
Central Japan Railway Co.		6,200		1,118,818
The Chiba Bank Ltd.		23,000		175,140
Chiyoda Corp. (a)		19,000		168,167
Common Stocks	Shares		Value
Japan (continued)
Chubu Electric Power Co., Inc.		23,700		353,228
Chugai Pharmaceutical Co. Ltd.		9,000		310,440
The Chugoku Bank Ltd.		4,000		63,047
The Chugoku Electric Power Co., Inc.		14,700		214,436
Citizen Holdings Co. Ltd.		14,200		99,070
COLOPL, Inc.		1,500		30,310
Credit Saison Co. Ltd. (a)		7,700		164,862
Dai Nippon Printing Co. Ltd.		26,000		268,290
The Dai-ichi Life Insurance Co. Ltd.		45,800		899,398
Daicel Corp.		7,000		89,825
Daihatsu Motor Co. Ltd.		8,100		115,289
Daiichi Sankyo Co. Ltd. (a)		29,200		539,632
Daikin Industries Ltd.		10,500		754,828
Daito Trust Construction Co. Ltd.		2,500		258,738
Daiwa House Industry Co. Ltd.		30,000		698,939
Daiwa Securities Group, Inc.		79,000		590,976
Denso Corp.		20,300		1,009,988
Dentsu, Inc.		10,000		517,326
Don Quijote Co. Ltd.		4,400		187,215
East Japan Railway Co.		14,700		1,321,518
Eisai Co. Ltd.		10,700		717,377
Electric Power Development Co. Ltd.		7,100		250,814
FamilyMart Co. Ltd. (a)		1,400		64,379
FANUC Corp.		8,000		1,636,925
Fast Retailing Co. Ltd. (a)		2,200		997,636
Fuji Electric Co. Ltd.		13,000		55,912
Fuji Heavy Industries Ltd.		25,200		926,624
FUJIFILM Holdings Corp.		22,200		792,274
Fujitsu Ltd.		86,000		480,512
Fukuoka Financial Group, Inc.		25,000		129,578
GungHo Online Entertainment, Inc.		8,800		34,246
The Gunma Bank Ltd.		15,000		110,675
The Hachijuni Bank Ltd.		10,000		75,400
Hakuhodo DY Holdings, Inc.		5,800		62,028
Hamamatsu Photonics KK		6,400		188,718
Hankyu Hanshin Holdings, Inc.		37,000		218,410
Hikari Tsushin, Inc.		1,800		121,316
Hino Motors Ltd.		8,600		106,315
Hirose Electric Co. Ltd.		735		105,310
The Hiroshima Bank Ltd.		22,000		131,367
Hisamitsu Pharmaceutical Co., Inc.		1,100		42,702
Hitachi Chemical Co. Ltd.		1,600		28,818
Hitachi Construction Machinery Co. Ltd.		4,600		80,525
Hitachi High-Technologies Corp.		1,600		44,979
Hitachi Ltd.		204,000		1,343,859
Hitachi Metals Ltd.		8,000		122,988
Hokuhoku Financial Group, Inc.		45,000		106,166
Hokuriku Electric Power Co.		15,000		223,436
Honda Motor Co. Ltd.		68,000		2,197,749
Hoya Corp.		17,700		708,880
Hulic Co. Ltd.		9,000		79,759
Ibiden Co. Ltd.		2,300		38,896
Idemitsu Kosan Co. Ltd.		2,400		47,083
IHI Corp.		45,000		209,528
Iida Group Holdings Co. Ltd.		6,800		108,102
Inpex Corp.		44,800		508,523
Isetan Mitsukoshi Holdings Ltd.		11,200		200,096
Isuzu Motors Ltd.		31,000		406,706
ITOCHU Corp.		69,700		920,543
Itochu Techno-Solutions Corp.		6,000		149,422
The Iyo Bank Ltd.		8,700		106,809

See Notes to Financial Statements.



24	BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

Total International ex U.S. Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Japan (continued)
J. Front Retailing Co. Ltd.		9,700	$	182,566
Japan Airlines Co. Ltd.		5,100		177,732
Japan Airport Terminal Co. Ltd.		1,500		81,638
Japan Display, Inc. (b)		33,300		125,694
Japan Exchange Group, Inc.		11,000		356,610
Japan Prime Realty Investment Corp.		41		127,299
Japan Real Estate Investment Corp.		56		254,143
Japan Retail Fund Investment Corp.		80		159,975
Japan Tobacco, Inc.		45,800		1,628,157
JFE Holdings, Inc.		22,200		491,861
JGC Corp.		7,000		132,140
The Joyo Bank Ltd.		14,000		78,392
JSR Corp.		6,300		111,216
JTEKT Corp.		6,900		130,482
JX Holdings, Inc.		104,000		448,380
Kajima Corp.		31,000		145,600
Kakaku.com, Inc. (a)		7,400		107,068
Kamigumi Co. Ltd.		18,000		168,964
Kaneka Corp.		19,000		138,756
The Kansai Electric Power Co., Inc. (b)		23,100		255,729
Kansai Paint Co. Ltd.		8,000		123,946
Kao Corp.		22,200		1,032,454
Kawasaki Heavy Industries Ltd.		52,000		242,382
KDDI Corp.		72,600		1,751,979
Keihan Electric Railway Co. Ltd. (a)		15,000		87,350
Keikyu Corp.		22,000		165,954
Keio Corp.		27,000		193,127
Keisei Electric Railway Co. Ltd.		7,000		83,226
Keyence Corp.		1,820		980,937
Kikkoman Corp. (a)		5,000		156,118
Kintetsu Corp.		58,000		197,512
Kirin Holdings Co. Ltd.		42,100		579,892
Kobe Steel Ltd.		126,000		211,984
Koito Manufacturing Co. Ltd.		3,500		136,280
Komatsu Ltd.		40,000		802,532
Konami Corp.		1,900		35,317
Konica Minolta, Inc.		16,300		189,979
Kubota Corp.		48,000		761,106
Kuraray Co. Ltd.		12,600		153,913
Kurita Water Industries Ltd.		7,400		172,375
Kyocera Corp.		13,900		722,695
Kyowa Hakko Kirin Co. Ltd.		12,000		156,814
Kyushu Electric Power Co., Inc. (b)		13,300		154,199
Lawson, Inc.		2,600		177,921
LIXIL Group Corp.		9,700		192,406
M3, Inc.		9,700		194,984
Mabuchi Motor Co. Ltd.		2,300		145,481
Makita Corp.		4,300		232,883
Marubeni Corp.		87,100		499,836
Marui Group Co. Ltd.		9,500		128,350
Maruichi Steel Tube Ltd.		6,400		158,850
Mazda Motor Corp.		24,600		481,392
McDonald’s Holdings Co. Japan Ltd. (a)		1,500		31,679
Medipal Holdings Corp.		3,000		48,863
Meiji Holdings Co. Ltd.		2,500		322,575
Minebea Co. Ltd. (a)		12,000		198,100
Miraca Holdings, Inc.		2,400		119,914
Mitsubishi Chemical Holdings Corp.		55,100		346,393
Mitsubishi Corp.		57,600		1,266,278
Mitsubishi Electric Corp.		76,000		981,365
Mitsubishi Estate Co. Ltd.		51,000		1,098,442
Common Stocks	Shares		Value
Japan (continued)
Mitsubishi Gas Chemical Co., Inc. (a)		31,000		173,577
Mitsubishi Heavy Industries Ltd.		132,000		802,422
Mitsubishi Logistics Corp.		2,000		26,249
Mitsubishi Materials Corp.		37,000		142,070
Mitsubishi Motors Corp.		21,000		178,585
Mitsubishi Tanabe Pharma Corp.		11,400		170,793
Mitsubishi UFJ Financial Group, Inc.		541,300		3,894,362
Mitsubishi UFJ Lease & Finance Co. Ltd.		11,500		62,887
Mitsui & Co. Ltd.		73,100		993,146
Mitsui Chemicals, Inc.		37,000		137,465
Mitsui Fudosan Co. Ltd.		39,000		1,091,333
Mitsui OSK Lines Ltd. (a)		47,000		150,447
Mixi, Inc.		1,800		89,303
Mizuho Financial Group, Inc.		975,000		2,109,639
MS&AD Insurance Group Holdings, Inc.		20,500		638,130
Murata Manufacturing Co. Ltd.		8,500		1,483,380
Nabtesco Corp.		3,900		97,827
Nagoya Railroad Co. Ltd.		31,000		115,910
Namco Bandai Holdings, Inc.		6,600		127,542
NEC Corp.		108,000		326,824
Nexon Co. Ltd.		1,500		20,651
NGK Insulators Ltd.		11,000		283,042
NGK Spark Plug Co. Ltd. (a)		8,500		235,400
NH Foods Ltd.		8,000		182,437
NHK Spring Co. Ltd.		14,000		154,145
Nidec Corp.		10,000		748,378
Nikon Corp.		13,300		153,704
Nintendo Co. Ltd.		4,600		767,407
Nippon Building Fund, Inc.		50		218,826
Nippon Electric Glass Co. Ltd.		9,000		45,513
Nippon Express Co. Ltd.		31,000		152,316
Nippon Paint Co. Ltd.		6,000		169,084
Nippon Prologis REIT, Inc.		53		97,528
Nippon Steel & Sumitomo Metal		310,475		805,016
Nippon Telegraph & Telephone Corp.		32,400		1,173,390
Nippon Yusen KK		59,000		164,259
Nissan Motor Co. Ltd.		102,300		1,068,723
Nisshin Seifun Group, Inc.		3,300		43,861
Nissin Foods Holdings Co. Ltd.		3,500		153,346
Nitori Holdings Co. Ltd.		2,900		236,433
Nitto Denko Corp.		7,300		599,493
NOK Corp.		2,000		61,968
Nomura Holdings, Inc.		162,000		1,093,799
Nomura Real Estate Holdings, Inc.		5,200		109,141
Nomura Research Institute Ltd.		3,700		144,684
NSK Ltd.		17,000		262,127
NTT Data Corp.		4,900		213,986
NTT DoCoMo, Inc.		63,300		1,215,268
NTT Urban Development Corp.		2,400		23,839
Obayashi Corp.		23,000		167,719
Odakyu Electric Railway Co. Ltd. (a)		21,000		195,935
Oji Holdings Corp.		16,000		69,533
Olympus Corp. (b)		11,100		383,228
Omron Corp.		8,900		386,600
Ono Pharmaceutical Co. Ltd. (a)		3,400		371,093
Oracle Corp. Japan		700		29,264
Oriental Land Co. Ltd.		9,500		605,997
ORIX Corp.		56,800		843,450
Osaka Gas Co. Ltd.		68,000		268,382
Otsuka Corp.		1,200		56,018
Otsuka Holdings Co. Ltd.		18,200		579,910

See Notes to Financial Statements.



BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015	25

Schedule of Investments (continued)

Total International ex U.S. Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Japan (continued)
Panasonic Corp.		94,500	$	1,294,291
Park24 Co. Ltd.		8,400		143,804
Rakuten, Inc.		33,000		532,756
Recruit Holdings Co. Ltd.		5,800		176,867
Resona Holdings, Inc.		113,000		616,316
Ricoh Co. Ltd.		31,300		324,235
Rinnai Corp.		900		70,871
Rohm Co. Ltd.		3,400		227,797
Sankyo Co. Ltd.		700		24,783
Sanrio Co. Ltd.		4,800		130,418
Santen Pharmaceutical Co. Ltd.		14,500		205,156
SBI Holdings, Inc.		8,850		121,665
Secom Co. Ltd.		9,600		623,669
Sega Sammy Holdings, Inc.		6,900		90,220
Seibu Holdings, Inc.		6,200		143,576
Seiko Epson Corp.		9,800		173,660
Sekisui Chemical Co. Ltd.		19,000		233,245
Sekisui House Ltd.		22,600		358,909
Seven & I Holdings Co. Ltd.		31,000		1,330,694
Seven Bank Ltd.		27,800		128,692
Sharp Corp. (a)(b)		54,000		65,616
Shikoku Electric Power Co., Inc.		8,000		119,759
Shimadzu Corp.		11,000		149,294
Shimamura Co. Ltd.		900		94,490
Shimano, Inc.		3,500		477,611
Shimizu Corp.		19,000		159,895
Shin-Etsu Chemical Co. Ltd.		16,400		1,016,979
Shinsei Bank Ltd.		61,000		122,931
Shionogi & Co. Ltd.		14,600		565,797
Shiseido Co. Ltd. (a)		14,500		328,879
The Shizuoka Bank Ltd.		20,000		208,774
Showa Shell Sekiyu KK		13,900		121,452
SMC Corp.		2,400		722,206
Softbank Corp.		39,200		2,308,997
Sompo Japan Nipponkoa Holdings, Inc.		15,200		556,567
Sony Corp. (b)		48,500		1,377,248
Sony Financial Holdings, Inc.		6,900		120,811
Stanley Electric Co. Ltd.		5,100		106,217
Sumitomo Chemical Co. Ltd.		58,000		348,487
Sumitomo Corp.		56,600		658,791
Sumitomo Dainippon Pharma Co. Ltd. (a)		3,900		42,979
Sumitomo Electric Industries Ltd.		39,500		611,355
Sumitomo Heavy Industries Ltd.		20,000		116,487
Sumitomo Metal Mining Co. Ltd.		22,000		334,597
Sumitomo Mitsui Financial Group, Inc.		53,600		2,386,228
Sumitomo Mitsui Trust Holdings, Inc.		146,000		667,891
Sumitomo Realty & Development Co. Ltd.		16,000		560,750
Sumitomo Rubber Industries Ltd.		4,300		66,608
Suntory Beverage & Food Ltd.		6,300		250,809
Suruga Bank Ltd.		8,300		177,795
Suzuken Co. Ltd.		1,870		59,827
Suzuki Motor Corp.		16,400		553,491
Sysmex Corp.		6,300		375,212
T&D Holdings, Inc.		20,300		302,623
Taiheiyo Cement Corp.		49,000		143,295
Taisei Corp.		38,000		218,158
Taisho Pharmaceutical Holdings Co. Ltd.		800		54,042
Taiyo Nippon Sanso Corp.		4,000		48,407
Takashimaya Co. Ltd.		13,000		117,837
Takeda Pharmaceutical Co. Ltd.		32,600		1,573,558
TDK Corp.		4,900		375,205
Common Stocks	Shares		Value
Japan (concluded)
Teijin Ltd.		31,000		120,294
Terumo Corp.		13,400		321,335
THK Co. Ltd.		4,000		86,321
Tobu Railway Co. Ltd.		57,000		244,842
Toho Co. Ltd.		5,000		124,326
Toho Gas Co. Ltd.		18,000		106,562
Tohoku Electric Power Co., Inc.		15,700		212,570
Tokio Marine Holdings, Inc.		29,100		1,210,242
The Tokyo Electric Power Co., Inc. (b)		50,500		275,119
Tokyo Electron Ltd.		8,000		508,456
Tokyo Gas Co. Ltd.		108,000		573,337
Tokyo Tatemono Co. Ltd.		8,000		111,037
Tokyu Corp.		36,000		240,935
Tokyu Fudosan Holdings Corp.		16,800		129,479
TonenGeneral Sekiyu KK		7,000		65,114
Toppan Printing Co. Ltd.		23,000		192,279
Toray Industries, Inc.		70,000		591,688
Toshiba Corp.		175,000		600,127
Toto Ltd.		11,000		198,263
Toyo Seikan Kaisha Ltd. (a)		3,500		56,152
Toyo Suisan Kaisha Ltd.		2,900		105,667
Toyoda Gosei Co. Ltd.		4,300		103,648
Toyota Industries Corp.		7,400		421,403
Toyota Motor Corp.		114,100		7,635,261
Toyota Tsusho Corp.		10,200		273,698
Trend Micro, Inc.		4,200		143,668
Unicharm Corp.		16,500		391,949
United Urban Investment Corp.		99		139,805
USS Co. Ltd.		12,100		218,225
West Japan Railway Co.		8,800		563,016
Yahoo! Japan Corp. (a)		54,500		219,965
Yakult Honsha Co. Ltd.		3,400		201,381
Yamada Denki Co. Ltd.		39,300		157,211
Yamaguchi Financial Group, Inc.		4,000		49,809
Yamaha Corp.		5,700		114,881
Yamaha Motor Co. Ltd.		10,700		233,791
Yamato Holdings Co. Ltd.		12,800		247,496
Yamazaki Baking Co. Ltd.		7,000		116,557
Yaskawa Electric Corp.		8,100		103,603
Yokogawa Electric Corp. (a)		8,400		108,185
The Yokohama Rubber Co. Ltd.		5,000		100,328

				124,959,720
Luxembourg — 0.1%
Altice SA (b)		3,659		503,989
RTL Group SA (b)		1,615		145,996

				649,985
Malaysia — 0.7%
AirAsia Bhd		60,100		24,531
Alliance Financial Group Bhd		90,800		105,550
AMMB Holdings Bhd		68,900		110,002
Astro Malaysia Holdings Bhd		29,600		24,156
Axiata Group Bhd		165,600		280,790
Berjaya Sports Toto Bhd		117,638		102,235
British American Tobacco Malaysia Bhd		3,100		50,893
Bumi Armada Bhd (b)		45,600		13,761
CIMB Group Holdings Bhd		239,100		346,423
Dialog Group Bhd		142,134		59,835
DiGi.Com Bhd		113,000		160,383
Felda Global Ventures Holdings Bhd		89,900		38,781

See Notes to Financial Statements.



26	BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

Total International ex U.S. Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Malaysia (concluded)
Gamuda Bhd		39,600	$	48,978
Genting Bhd		78,100		166,800
Genting Malaysia Bhd		106,100		118,025
Genting Plantations Bhd		10,000		26,266
Hong Leong Bank Bhd		14,040		49,814
Hong Leong Financial Group Bhd		7,000		28,107
IHH Healthcare Bhd		96,200		144,215
IJM Corp. Bhd		63,300		109,405
IOI Corp. Bhd		102,200		109,974
IOI Properties Group Sdn Bhd		23,273		11,398
Kuala Lumpur Kepong Bhd		17,500		99,111
Lafarge Malayan Cement Bhd		17,500		39,239
Malayan Banking Bhd		216,600		524,476
Malaysia Airports Holdings Bhd		11,300		18,580
Maxis Bhd		66,600		112,296
MISC Bhd		27,400		56,051
Petronas Chemicals Group Bhd		126,000		210,767
Petronas Dagangan Bhd		6,100		33,256
Petronas Gas Bhd		27,300		153,829
PPB Group Bhd		12,600		50,434
Public Bank Bhd		113,320		562,245
RHB Capital Bhd		12,900		25,193
Sapurakencana Petroleum Bhd		220,700		137,851
Sime Darby Bhd		108,300		244,513
Telekom Malaysia Bhd		20,200		34,947
Tenaga Nasional Bhd		162,200		543,351
UMW Holdings Bhd		10,900		29,271
Westports Holdings Bhd		70,000		78,500
YTL Corp. Bhd		113,160		46,488
YTL Power International Bhd		42,000		17,800

				5,148,520
Malta — 0.0%
Brait SE (b)		10,521		106,666
Mexico — 1.0%
Alfa SAB de CV, Series A		169,400		323,657
America Movil SAB de CV, Series L		1,379,000		1,470,465
Arca Continental SAB de CV		15,972		90,746
Cemex SAB de CV (b)		593,445		544,078
Coca-Cola Femsa SAB de CV, Series L		12,800		101,618
Controladora Comercial Mexicana SAB de CV		6,300		19,805
El Puerto de Liverpool SAB de CV, Series C1		4,400		50,821
Fibra Uno Administracion SA de CV		78,700		186,817
Fomento Economico Mexicano SAB de CV		86,800		772,985
Gentera SAB de CV		37,100		65,714
Gruma SAB de CV		10,000		128,500
Grupo Aeroportuario del Pacifico SAB de CV, Class B		6,700		45,919
Grupo Aeroportuario del Sureste SAB de CV, Class B		3,600		51,125
Grupo Bimbo SAB de CV, Series A (b)		64,700		167,374
Grupo Carso SAB de CV, Series A1		14,900		62,093
Grupo Comercial Chedraui SA de CV		41,000		116,420
Grupo Financiero Banorte SAB de CV, Series O		125,700		689,701
Grupo Financiero Inbursa SAB de CV, Series O		99,700		225,947
Grupo Financiero Santander Mexico SAB de CV, Series B		92,800		171,459
Grupo Lala SAB de CV		9,900		20,654
Grupo Mexico SAB de CV, Series B		164,723		496,553
Grupo Televisa SAB CPO		115,100		894,217
Common Stocks	Shares		Value
Mexico (concluded)
Industrias Penoles SAB de CV		2,850		46,411
Kimberly-Clark de Mexico SAB de CV, Class A		36,900		79,634
Mexichem SAB de CV		35,730		103,183
OHL Mexico SAB de CV (b)		42,200		55,148
Promotora y Operadora de Infraestructura SAB de CV (b)		9,700		103,915
Wal-Mart de Mexico SAB de CV		249,000		605,648

				7,690,607
Netherlands — 2.9%
Aegon NV		80,057		590,676
Akzo Nobel NV		11,859		865,814
ASML Holding NV		14,518		1,510,124
CNH Industrial NV (a)		45,146		411,955
Delta Lloyd NV		8,296		136,188
Gemalto NV (a)		2,808		251,001
Heineken Holding NV		5,586		391,520
Heineken NV		9,785		743,928
ING Groep NV CVA (b)		155,825		2,587,531
Koninklijke Ahold NV		37,447		702,979
Koninklijke Boskalis Westminster NV		2,923		143,483
Koninklijke DSM NV		7,848		455,656
Koninklijke KPN NV		148,504		569,340
Koninklijke Philips Electronics NV		38,195		974,830
Koninklijke Vopak NV		2,494		126,140
NN Group NV (b)		7,768		218,764
OCI NV (b)		3,417		96,843
QIAGEN NV (a)(b)		10,835		266,289
Randstad Holding NV		5,830		379,343
Reed Elsevier NV		31,651		752,841
Royal Dutch Shell PLC, Class A		160,809		4,546,737
Royal Dutch Shell PLC, Class B		100,598		2,864,076
TNT Express NV		19,685		167,180
Unilever NV CVA		66,334		2,773,366
Wolters Kluwer NV		15,969		475,297

				23,001,901
New Zealand — 0.1%
Auckland International Airport Ltd.		55,568		185,980
Contact Energy Ltd.		8,655		29,384
Fletcher Building Ltd.		30,613		168,454
Meridian Energy, Ltd.		22,039		32,259
Mighty River Power Ltd.		12,773		24,149
Ryman Healthcare Ltd.		13,399		71,913
Spark New Zealand Ltd.		65,332		123,659

				635,798
Norway — 0.5%
DnB NOR ASA		41,116		684,730
Gjensidige Forsikring ASA		7,893		127,091
Norsk Hydro ASA		59,486		249,658
Orkla ASA		34,406		269,953
Seadrill Ltd. (a)		18,960		196,910
Statoil ASA		44,630		798,119
Subsea 7 SA		12,237		119,694
Telenor ASA		33,130		726,370
Yara International ASA		7,531		392,426

				3,564,951
Peru — 0.1%
Compania de Minas Buenaventura SA — ADR		4,924		51,111
Credicorp Ltd.		3,530		490,388

See Notes to Financial Statements.



BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015	27

Schedule of Investments (continued)

Total International ex U.S. Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Peru (concluded)
Southern Copper Corp.		7,198	$	211,693

				753,192
Philippines — 0.3%
Aboitiz Equity Ventures, Inc.		86,410		111,324
Aboitiz Power Corp.		29,200		29,445
Alliance Global Group, Inc.		35,800		17,234
Ayala Corp.		7,510		131,532
Ayala Land, Inc.		269,200		222,542
Bank of the Philippine Islands		45,031		94,341
BDO Unibank, Inc.		59,814		143,668
DMCI Holdings, Inc.		170,000		49,742
Energy Development Corp.		642,400		106,528
Globe Telecom, Inc.		845		47,007
GT Capital Holdings, Inc.		2,625		79,458
International Container Terminal Services, Inc.		9,550		23,318
JG Summit Holdings, Inc.		82,763		131,606
Jollibee Foods Corp.		12,070		52,802
Megaworld Corp.		600,000		63,266
Metro Pacific Investments Corp.		1,468,000		154,050
Metropolitan Bank & Trust Co.		12,817		26,715
Philippine Long Distance Telephone Co.		3,590		223,677
SM Investments Corp.		6,035		119,758
SM Prime Holdings, Inc.		311,950		138,228
Universal Robina Corp.		34,300		147,483

				2,113,724
Poland — 0.3%
Alior Bank SA (b)		761		18,053
Bank Handlowy w Warszawie SA		502		13,346
Bank Millennium SA (b)		13,346		23,244
Bank Pekao SA		6,396		306,067
Bank Zachodni WBK SA (b)		1,160		105,215
CCC SA		981		45,427
Cyfrowy Polsat SA (b)		8,953		56,283
Enea SA		3,084		13,082
Energa SA		5,000		30,255
Eurocash SA		9,624		95,549
Getin Noble Bank SA (b)		130,001		47,353
Grupa Azoty SA (b)		1,551		34,077
Grupa Lotos SA (b)		1,964		15,670
KGHM Polska Miedz SA		4,863		137,746
LPP SA		22		38,896
Mbank (b)		573		62,819
Orange Polska SA		11,397		24,684
PGE SA		29,504		144,690
Polski Koncern Naftowy Orlen SA		15,864		311,587
Polskie Gornictwo Naftowe i Gazownictwo SA		93,796		164,683
Powszechna Kasa Oszczednosci Bank Polski SA		34,411		284,509
Powszechny Zaklad Ubezpieczen SA		1,985		228,407
Synthos SA (b)		54,162		66,959
Tauron Polska Energia SA		20,989		24,439

				2,293,040
Portugal — 0.1%
Banco Comercial Portugues SA (b)		1,716,504		150,041
EDP — Energias de Portugal SA		94,763		361,046
Galp Energia SGPS SA		18,382		216,380
Jeronimo Martins SGPS SA		11,973		154,379

				881,846
Common Stocks	Shares		Value
Qatar — 0.2%
Barwa Real Estate Co.		2,548		36,901
The Commercial Bank of Qatar QSC		2,974		44,840
Doha Bank QSC		6,076		88,496
Ezdan Holding Group QSC		27,813		136,320
Gulf International Services OSC		901		19,726
Industries Qatar QSC		6,641		261,147
Masraf Al Rayan		13,978		177,664
Ooredoo QSC		2,666		63,344
Qatar Electricity & Water Co.		1,002		62,487
Qatar Insurance Co. SAQ		3,794		100,351
Qatar Islamic Bank SAQ		1,671		49,229
Qatar National Bank		7,012		371,008
Vodafone Qatar		7,760		35,057

				1,446,570
Russia — 0.8%
AK Transneft OAO, Preference Shares		32		75,847
Alrosa AO		57,800		66,146
Federal Hydrogenerating Co. JSC		6,552,000		65,101
Gazprom OAO		174,350		460,280
Gazprom OAO — ADR		160,445		835,940
Lukoil OAO		9,190		410,973
Lukoil OAO — ADR		12,969		571,410
Magnit OJSC — GDR		11,460		637,451
MegaFon OAO — GDR		2,296		31,914
MMC Norilsk Nickel		2,583		443,627
Mobile Telesystems — ADR		27,500		268,950
Moscow Exchange MICEX-RTS OAO		63,850		80,453
NovaTek OAO — GDR		3,816		388,494
Rosneft Oil Co.		21,260		89,343
Rosneft Oil Co. OJSC		20,000		82,552
Rostelecom OJSC		42,250		69,035
Sberbank of Russia		205,970		269,553
Sberbank of Russia — ADR		40,000		208,588
Severstal OAO		10,830		115,445
Sistema JSFC — GDR		2,940		26,019
Surgutneftegas OAO		119,550		70,903
Surgutneftegas OAO — ADR		24,155		142,706
Surgutneftegas OAO, Preference Shares		268,700		206,307
Tatneft OAO		79,770		424,783
Uralkali OJSC (b)		22,930		60,734
Uralkali PJSC — GDR		8,086		103,777
VTB Bank OJSC		86,510,000		123,939
VTB Bank OJSC — GDR		50,000		136,625

				6,466,895
Singapore — 1.0%
Ascendas Real Estate Investment Trust (a)		77,000		140,581
CapitaCommercial Trust		80,000		92,590
CapitaLand Ltd.		147,400		382,763
CapitaMall Trust		85,000		135,582
City Developments Ltd. (a)		14,000		101,591
ComfortDelGro Corp. Ltd.		86,000		199,722
DBS Group Holdings Ltd.		71,684		1,099,894
Genting Singapore PLC (a)		233,000		154,699
Global Logistic Properties Ltd.		130,000		244,045
Golden Agri-Resources Ltd.		270,000		82,213
Hutchison Port Holdings Trust		309,000		194,623
Jardine Cycle & Carriage Ltd. (a)		4,000		98,202
Keppel Corp. Ltd. (a)		76,700		467,496
Noble Group Ltd. (a)		131,000		73,804

See Notes to Financial Statements.



28	BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

Total International ex U.S. Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Singapore (concluded)
Oversea-Chinese Banking Corp. Ltd.		138,249	$	1,044,051
SembCorp Industries Ltd.		40,000		115,449
SembCorp Marine Ltd. (a)		21,000		44,243
Singapore Airlines Ltd.		28,600		227,714
Singapore Exchange Ltd.		29,000		168,465
Singapore Press Holdings Ltd. (a)		37,676		114,072
Singapore Technologies Engineering Ltd.		57,000		139,559
Singapore Telecommunications Ltd.		348,200		1,086,633
StarHub Ltd.		41,600		121,949
Suntec Real Estate Investment Trust		86,000		110,154
United Overseas Bank Ltd.		51,400		879,401
UOL Group Ltd.		22,000		112,921
Wilmar International Ltd.		108,500		264,076
Yangzijiang Shipbuilding Holdings Ltd. (a)		76,800		80,664

				7,977,156
South Africa — 1.7%
African Bank Investments Ltd. (b)		20,398		17
African Rainbow Minerals Ltd.		17,087		116,193
Anglo American Platinum Ltd. (b)		832		18,761
AngloGold Ashanti Ltd. (b)		19,921		178,329
Aspen Pharmacare Holdings Ltd. (b)		15,530		459,260
Barclays Africa Group Ltd.		20,871		313,758
Barloworld Ltd.		5,200		41,265
Bidvest Group Ltd.		11,167		282,561
Capitec Bank Holdings, Ltd.		1,291		51,462
Coronation Fund Managers Ltd.		2,870		19,429
Discovery Holdings Ltd.		20,716		215,147
Exxaro Resources Ltd.		3,809		27,230
FirstRand Ltd.		154,493		676,867
The Foschini Group Ltd.		6,363		83,178
Gold Fields Ltd.		44,433		142,133
Growthpoint Properties Ltd.		68,757		149,463
Hyprop Investments, Ltd.		7,562		75,210
Impala Platinum Holdings Ltd. (b)		29,321		130,839
Imperial Holdings Ltd.		3,661		55,748
Investec Ltd.		7,549		67,915
Kumba Iron Ore Ltd.		1,303		16,162
Liberty Holdings Ltd.		1,922		22,934
Life Healthcare Group Holdings Ltd.		20,533		63,285
Massmart Holdings Ltd.		4,180		51,430
Mediclinic International Ltd.		14,228		119,605
MMI Holdings Ltd.		20,454		50,689
Mondi, Ltd.		3,303		72,402
Mr. Price Group Ltd.		10,819		222,687
MTN Group Ltd.		69,107		1,298,117
Nampak Ltd.		15,329		42,574
Naspers Ltd., Class N		16,524		2,569,554
Nedbank Group Ltd.		13,358		265,258
Netcare Ltd.		21,846		68,731
Pick n Pay Stores Ltd.		28,036		132,475
PSG Group Ltd.		2,684		45,153
Redefine Properties Ltd.		77,451		64,969
Remgro Ltd.		24,867		522,636
Resilient Property Income Fund, Ltd.		17,014		134,828
RMB Holdings Ltd.		17,898		97,739
RMI Holdings		15,066		52,539
Sanlam Ltd.		87,998		479,023
Sappi Ltd. (b)		10,017		35,528
Sasol Ltd.		24,981		925,039
Shoprite Holdings Ltd.		16,621		236,915
Common Stocks	Shares		Value
South Africa (concluded)
The Spar Group Ltd.		4,305		67,111
Standard Bank Group Ltd.		55,054		724,477
Steinhoff International Holdings Ltd.		100,943		638,840
Telkom SA SOC, Ltd. (b)		11,210		59,073
Tiger Brands Ltd.		7,701		179,649
Truworths International Ltd. (a)		9,001		63,340
Tsogo Sun Holdings, Ltd.		25,000		50,186
Vodacom Group Ltd. (a)		14,966		170,672
Woolworths Holdings Ltd.		31,891		258,416

				12,906,801
South Korea — 3.1%
Amorepacific Corp.		1,345		469,696
Amorepacific Group		880		147,267
BS Financial Group, Inc.		6,269		79,703
Celltrion, Inc. (b)		4,209		294,371
Cheil Industries, Inc. (b)		1,314		209,042
Cheil Worldwide, Inc. (b)		1,700		26,317
CJ CheilJedang Corp.		189		74,661
CJ Corp.		477		126,373
CJ Korea Express Co., Ltd. (b)		414		71,881
Coway Co., Ltd.		1,699		139,103
Daelim Industrial Co., Ltd.		1,073		78,765
Daewoo Engineering & Construction Co., Ltd. (b)		19,237		106,359
Daewoo International Corp.		1,160		26,804
Daewoo Securities Co., Ltd.		8,184		111,562
Daewoo Shipbuilding & Marine Engineering Co., Ltd.		5,365		63,785
Daum Communications Corp.		1,108		125,276
DGB Financial Group, Inc.		5,100		53,411
Dongbu Insurance Co., Ltd.		1,160		58,658
Doosan Corp.		436		42,580
Doosan Heavy Industries & Construction Co., Ltd.		776		16,673
Doosan Infracore Co., Ltd. (b)		3,880		34,023
E-Mart Co., Ltd.		644		133,312
GS Engineering & Construction Corp. (b)		969		23,214
GS Holdings		1,216		54,110
Halla Visteon Climate Control Corp.		750		25,906
Hana Financial Group, Inc.		10,202		265,309
Hankook Tire Co., Ltd.		4,552		171,194
Hanmi Pharm Co., Ltd. (b)		204		85,114
Hanssem Co., Ltd.		731		184,060
Hanwha Chemical Corp.		4,037		67,564
Hanwha Corp.		4,520		191,086
Hanwha Life Insurance Co., Ltd.		7,120		50,624
Hotel Shilla Co., Ltd.		1,174		117,365
Hyosung Corp.		1,140		146,795
Hyundai Department Store Co., Ltd.		314		41,327
Hyundai Development Co-Engineering & Construction		2,250		133,291
Hyundai Engineering & Construction Co., Ltd.		1,666		61,204
Hyundai Glovis Co., Ltd.		1,138		205,758
Hyundai Heavy Industries Co., Ltd. (b)		1,622		161,005
Hyundai Marine & Fire Insurance Co., Ltd.		1,200		31,698
Hyundai Merchant Marine Co., Ltd. (b)		13,543		83,775
Hyundai Mipo Dockyard (b)		1,816		105,259
Hyundai Mobis		2,830		537,269
Hyundai Motor Co.		6,412		780,574
Hyundai Motor Co., Preference Shares		852		77,868
Hyundai Motor Co., Second Preference Shares		1,756		165,133
Hyundai Steel Co.		2,195		133,167
Hyundai Wia Corp.		513		47,273
Industrial Bank of Korea		7,630		98,705

See Notes to Financial Statements.



BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015	29

Schedule of Investments (continued)

Total International ex U.S. Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
South Korea (concluded)
Kangwon Land, Inc.		3,703	$	122,705
KB Financial Group, Inc.		14,508		479,169
KCC Corp.		266		117,047
KEPCO Plant Service & Engineering Co., Ltd.		707		74,791
Kia Motors Corp.		10,215		414,422
Korea Aerospace Industries Ltd.		2,530		180,047
Korea Electric Power Corp.		10,220		417,744
Korea Gas Corp.		753		29,159
Korea Investment Holdings Co., Ltd.		1,486		84,653
Korea Zinc Co., Ltd.		205		99,730
Korean Air Lines Co., Ltd. (b)		3,387		122,866
KT Corp. (b)		1,200		30,578
KT&G Corp.		3,924		333,845
Kumho Petrochemical Co., Ltd.		423		26,812
LG Chem Ltd.		2,155		537,427
LG Chem Ltd., Preference Shares		179		30,149
LG Corp.		3,574		197,722
LG Display Co., Ltd.		13,391		309,180
LG Electronics, Inc.		4,891		206,792
LG Household & Health Care Ltd.		443		307,085
LG Innotek Co., Ltd.		954		85,638
LG Uplus Corp.		5,020		44,346
Lotte Chemical Corp.		1,222		316,147
Lotte Confectionery Co., Ltd.		75		130,531
Lotte Shopping Co., Ltd.		242		50,820
LS Corp.		2,176		84,651
LS Industrial Systems Co., Ltd.		1,994		81,576
Mirae Asset Securities Co., Ltd.		2,793		126,076
NAVER Corp.		1,129		640,862
NCSoft Corp.		540		95,957
OCI Co., Ltd.		1,017		81,938
Orion Corp.		138		129,408
Paradise Co., Ltd.		5,601		120,664
POSCO		2,719		544,452
S-1 Corp.		442		31,074
S-Oil Corp.		1,187		71,741
Samsung C&T Corp.		5,038		298,996
Samsung Card Co., Ltd.		1,210		40,076
Samsung Electro-Mechanics Co., Ltd.		2,177		99,577
Samsung Electronics Co. Ltd.		4,677		5,306,455
Samsung Electronics Co. Ltd., Preference Shares		815		724,307
Samsung Fire & Marine Insurance Co., Ltd.		1,337		352,301
Samsung Heavy Industries Co. Ltd.		4,858		74,082
Samsung Life Insurance Co., Ltd.		2,202		212,166
Samsung SDI Co., Ltd.		2,189		217,105
Samsung SDS Co., Ltd.		1,231		285,901
Samsung Securities Co., Ltd.		2,400		117,196
Shinhan Financial Group Co., Ltd.		17,747		660,578
Shinsegae Co., Ltd.		670		160,727
SK C&C Co., Ltd.		1,054		260,797
SK Holdings Co., Ltd.		923		163,601
SK Hynix, Inc.		22,678		859,531
SK Innovation Co., Ltd. (b)		2,314		252,293
SK Networks Co., Ltd.		14,759		118,697
SK Telecom Co. Ltd.		390		87,265
Woori Bank		13,531		118,677
Woori Investment & Securities Co., Ltd.		5,312		57,902
Yuhan Corp.		122		29,830

				23,791,133
Common Stocks	Shares		Value
Spain — 2.5%
Abertis Infraestructuras SA		20,662		339,314
ACS Actividades de Construccion y Servicios SA (a)		7,981		257,435
Aena SA (b)(c)		3,133		326,826
Amadeus IT Holding SA, Class A (a)		20,022		799,282
Banco Bilbao Vizcaya Argentaria SA		273,353		2,693,607
Banco de Sabadell SA (a)(b)		3,305		7,976
Banco de Sabadell SA International Shares		195,812		474,293
Banco Popular Espanol SA (a)		90,200		438,879
Banco Santander SA		590,740		4,155,272
Bankia SA (b)		213,715		272,086
Bankinter SA		24,963		185,148
CaixaBank SA		104,553		486,516
Distribuidora Internacional de Alimentacion SA (a)		24,444		187,329
Enagas SA		3,839		104,507
Endesa SA (a)		13,298		254,679
Ferrovial SA		20,314		441,350
Gas Natural SDG SA (a)		17,935		407,254
Grifols SA (a)		5,032		203,201
Iberdrola SA		213,931		1,444,364
Inditex SA		43,809		1,428,931
International Consolidated Airlines Group SA (b)		38,441		299,898
Mapfre SA		66,978		231,483
Red Electrica Corp. SA		2,074		166,542
Repsol SA		49,442		871,446
Telefonica SA		185,369		2,640,654
Zardoya Otis SA (a)		4,309		47,029

				19,165,301
Sweden — 2.1%
Alfa Laval AB		10,363		182,399
Assa Abloy AB		43,794		824,457
Atlas Copco AB, A Shares		29,891		836,300
Atlas Copco AB, B Shares		14,189		353,457
Boliden AB		11,878		216,544
Electrolux AB, Class B		9,181		287,669
Elekta AB, B Shares (a)		16,131		101,185
Getinge AB, Class B		7,626		183,604
Hennes & Mauritz AB, Class B		37,411		1,439,901
Hexagon AB, Class B		11,240		407,119
Husqvarna AB, Class B		17,215		129,674
ICA Gruppen AB (a)		3,148		111,682
Industrivarden AB, Class C		2,903		54,709
Investment AB Kinnevik, Class B		12,764		403,723
Investor AB, Class B		19,018		709,099
Lundin Petroleum AB (b)		9,142		156,845
Millicom International Cellular SA		3,166		233,556
Nordea Bank AB		122,809		1,531,643
Sandvik AB		48,016		530,831
Securitas AB, Class B		11,724		154,838
Skandinaviska Enskilda Banken AB, Class A		63,663		814,335
Skanska AB, Class B		14,948		302,907
SKF AB, Class B		18,910		431,489
Svenska Cellulosa AB, B Shares		25,401		645,901
Svenska Handelsbanken AB, A Shares		70,386		1,027,512
Swedbank AB, Class A		40,577		946,029
Swedish Match AB		7,580		215,504
Tele2 AB, Class B		12,243		142,574
Telefonaktiebolaget LM Ericsson, Class B		127,480		1,327,721
TeliaSonera AB		116,593		687,168
Volvo AB, Class B		64,463		800,471

				16,190,846

See Notes to Financial Statements.



30	BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

Total International ex U.S. Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Switzerland — 6.8%
ABB Ltd., Registered Shares (a)(b)		91,542	$	1,918,566
Actelion Ltd., Registered Shares (b)		4,630		678,070
Adecco SA, Registered Shares (b)		8,349		677,583
Aryzta AG (b)		3,776		185,792
Baloise Holding AG, Registered Shares		2,131		259,835
Barry Callebaut AG, Registered Shares (b)		54		61,511
Cie Financiere Richemont SA, Registered Shares		21,466		1,744,709
Coca-Cola HBC AG (b)		7,960		170,831
Credit Suisse Group AG, Registered Shares (b)		64,223		1,771,750
EMS-Chemie Holding AG, Registered Shares		217		91,681
Geberit AG, Registered Shares		1,853		617,780
Givaudan SA, Registered Shares (b)		442		765,237
Glencore PLC (b)		474,060		1,901,076
Holcim Ltd., Registered Shares (a)(b)		9,797		722,877
Julius Baer Group Ltd. (b)		11,407		640,092
Kuehne & Nagel International AG, Registered Shares		2,954		392,241
Lindt & Spruengli AG		33		174,549
Lindt & Spruengli AG, Registered Shares		4		250,362
Lonza Group AG, Registered Shares (b)		2,224		297,271
Nestle SA, Registered Shares		133,577		9,637,661
Novartis AG, Registered Shares		95,232		9,367,063
Pargesa Holding SA, Bearer Shares		734		49,423
Partners Group Holding AG		526		157,215
Roche Holding AG		29,038		8,142,006
Schindler Holding AG, Participation Certificates (a)		1,323		216,378
Schindler Holding AG, Registered Shares		1,208		197,283
SGS SA, Registered Shares (a)		282		514,254
Sika AG — Bearer Shares		69		243,355
Sonova Holding AG, Registered Shares		2,144		289,922
STMicroelectronics NV		37,953		310,718
Sulzer AG, Registered Shares		486		49,991
The Swatch Group AG, Bearer Shares		1,446		563,474
The Swatch Group AG, Registered Shares		1,971		148,052
Swiss Life Holding AG, Registered Shares (b)		1,327		303,857
Swiss Prime Site AG, Registered Shares (b)		2,212		167,861
Swiss Re AG		15,574		1,378,653
Swisscom AG, Registered Shares		1,143		640,591
Syngenta AG, Registered Shares		4,039		1,648,001
Transocean Ltd. (a)		12,621		204,609
UBS Group AG (b)		153,609		3,259,042
Zurich Insurance Group AG (b)		6,623		2,016,237

				52,827,459
Taiwan — 2.7%
Acer, Inc. (b)		69,504		33,652
Advanced Semiconductor Engineering, Inc.		274,097		371,376
Advantech Co., Ltd.		8,795		60,389
Asia Cement Corp.		57,233		67,681
Asia Pacific Telecom Co., Ltd.		33,000		13,257
Asustek Computer, Inc.		25,220		245,617
AU Optronics Corp.		320,000		141,976
Casetek Holdings, Ltd.		6,000		37,115
Catcher Technology Co., Ltd.		24,000		300,048
Cathay Financial Holding Co. Ltd.		317,935		555,099
Chailease Holding Co., Ltd.		22,880		55,169
Chang Hwa Commercial Bank		123,172		70,644
Cheng Shin Rubber Industry Co. Ltd.		71,436		158,162
Chicony Electronics Co., Ltd.		15,545		41,724
China Airlines Ltd. (b)		103,687		44,191
China Development Financial Holding Corp.		577,765		218,923
China Life Insurance Co., Ltd.		112,637		115,252
Common Stocks	Shares		Value
Taiwan (continued)
China Motor Corp.		116,000		90,415
China Steel Corp.		540,638		431,895
Chunghwa Telecom Co. Ltd.		185,000		590,394
Compal Electronics, Inc.		192,000		146,043
CTBC Financial Holding Co. Ltd.		639,499		503,714
CTCI Corp.		81,000		130,970
Delta Electronics, Inc.		87,000		445,080
E.Sun Financial Holding Co., Ltd.		200,046		133,510
Eclat Textile Co., Ltd.		7,160		117,483
Epistar Corp.		48,000		64,153
Eva Airways Corp. (b)		67,689		46,220
Evergreen Marine Corp. Taiwan Ltd. (b)		83,000		43,089
Far Eastern New Century Corp.		84,909		89,941
Far EasTone Telecommunications Co. Ltd.		50,000		120,861
Feng TAY Enterprise Co., Ltd.		14,000		81,255
First Financial Holding Co., Ltd.		233,179		142,837
Formosa Chemicals & Fibre Corp.		134,360		323,185
Formosa Petrochemical Corp.		36,000		92,423
Formosa Plastics Corp.		165,040		388,615
Formosa Taffeta Co., Ltd.		31,000		32,899
Foxconn Technology Co., Ltd.		42,161		152,970
Fubon Financial Holding Co., Ltd.		334,952		665,679
Giant Manufacturing Co., Ltd.		10,000		84,647
Hermes Microvision, Inc.		1,000		64,937
Highwealth Construction Corp.		48,000		114,437
Hiwin Technologies Corp.		10,555		69,423
Hon Hai Precision Industry Co. Ltd.		558,616		1,755,385
Hotai Motor Co., Ltd.		8,000		113,363
HTC Corp. (b)		27,050		62,996
Hua Nan Financial Holdings Co., Ltd.		154,203		88,704
Innolux Corp.		286,494		149,267
Inotera Memories, Inc. (b)		93,000		74,061
Inventec Co. Ltd.		218,470		151,160
Kinsus Interconnect Technology Corp.		3,000		8,221
Largan Precision Co., Ltd.		4,000		456,603
Lite-On Technology Corp.		98,827		115,947
MediaTek, Inc.		66,255		905,679
Mega Financial Holding Co., Ltd.		356,110		320,759
Merida Industry Co., Ltd.		8,150		52,848
Nan Ya Plastics Corp.		205,790		483,031
Novatek Microelectronics Corp.		23,000		110,938
Pegatron Corp.		67,000		196,038
Phison Electronics Corp.		15,000		129,842
Pou Chen Corp.		92,000		131,238
Powertech Technology, Inc. (b)		70,100		151,685
President Chain Store Corp.		18,000		126,548
Quanta Computer, Inc.		138,000		326,326
Radiant Opto-Electronics Corp.		7,729		28,661
Realtek Semiconductor Corp.		23,240		59,559
Ruentex Development Co., Ltd.		42,109		66,565
Ruentex Industries Ltd.		17,521		40,114
Shin Kong Financial Holding Co., Ltd.		281,345		85,881
Siliconware Precision Industries Co.		108,000		164,786
Simplo Technology Co., Ltd.		11,600		53,653
SinoPac Financial Holdings Co., Ltd.		262,795		116,236
Standard Foods Corp.		5,783		17,293
Synnex Technology International Corp.		30,000		44,476
Taishin Financial Holding Co., Ltd.		299,398		124,738
Taiwan Business Bank (b)		225,604		69,525
Taiwan Cement Corp.		105,000		132,564
Taiwan Cooperative Financial Holding Co., Ltd.		171,270		89,621

See Notes to Financial Statements.



BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015	31

Schedule of Investments (continued)

Total International ex U.S. Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Taiwan (concluded)
Taiwan Fertilizer Co., Ltd.		12,000	$	19,841
Taiwan Glass Industry Corp.		120,720		58,084
Taiwan Mobile Co. Ltd.		52,800		176,303
Taiwan Semiconductor Manufacturing Co. Ltd.		1,047,000		4,762,402
Teco Electric and Machinery Co., Ltd.		39,000		30,276
TPK Holding Co., Ltd.		13,887		80,431
Transcend Information, Inc.		29,000		106,712
U-Ming Marine Transport Corp.		3,000		4,073
Uni-President Enterprises Corp.		196,106		347,757
United Microelectronics Corp.		488,000		206,104
Vanguard International Semiconductor Corp.		11,000		17,554
Wan Hai Lines Ltd.		36,000		28,586
Wistron Corp.		118,354		89,720
WPG Holdings Ltd.		28,270		35,409
Yang Ming Marine Transport Corp. (b)		228,000		79,864
Yuanta Financial Holding Co., Ltd.		311,101		168,258
Yulon Motor Co. Ltd.		14,000		16,242
Zhen Ding Technology Holding Ltd.		14,710		51,535

				20,980,812
Thailand — 0.5%
Advanced Info Service PCL — NVDR		52,400		371,323
Airports of Thailand PCL — NVDR		26,500		237,201
Bangkok Bank PCL — NVDR (a)		22,400		117,806
Bangkok Bank PCL, Foreign Registered Shares		30,500		160,872
Bangkok Dusit Medical Services PCL — NVDR		54,300		31,624
Banpu PCL — NVDR (a)		29,500		22,216
BEC World PCL — NVDR		16,900		18,712
BTS Group Holdings PCL		152,700		45,152
Bumrungrad Hospital PCL		8,000		44,193
Central Pattana PCL — NVDR		27,100		38,034
Charoen Pokphand Foods PCL — NVDR		46,200		32,768
CP ALL PCL — NVDR		184,800		252,665
Delta Electronics Thailand PCL		20,000		53,470
Energy Absolute PCL		45,000		31,254
Glow Energy PCL — NVDR		7,600		19,128
Home Product Center PCL		82,832		16,524
Indorama Ventures PCL — NVDR		39,200		32,138
IRPC PCL — NVDR		492,400		65,162
Kasikornbank PCL — NVDR		36,500		203,633
Kasikornbank PCL, Foreign Registered Shares		48,700		271,641
Krung Thai Bank PCL — NVDR (a)		143,775		72,635
Minor International PCL		34,980		30,986
PTT Exploration & Production PCL — NVDR		76,522		246,142
PTT Global Chemical PCL — NVDR		52,168		106,714
PTT PCL — NVDR		48,000		508,769
Siam Cement PCL — NVDR		5,700		87,555
Siam Cement PCL, Foreign Registered Shares		19,200		293,872
Siam Commercial Bank PCL — NVDR		82,400		378,457
Thai Oil PCL — NVDR		17,800		28,918
Thai Union Frozen Products PCL		14,800		9,537
TMB Bank PCL		271,500		18,762
True Corp. PCL — NVDR (b)		350,483		117,851

				3,965,714
Turkey — 0.3%
Akbank TAS		98,935		285,980
Anadolu Efes Biracilik Ve Malt Sanayii AS		3,889		35,075
Arcelik AS		3,960		21,478
BIM Birlesik Magazalar AS		8,104		145,141
Coca-Cola Icecek AS		4,750		79,046
Common Stocks	Shares		Value
Turkey (concluded)
Emlak Konut Gayrimenkul Yatirim Ortakligi AS		92,969		95,734
Enka Insaat ve Sanayi AS		15,716		29,898
Eregli Demir ve Celik Fabrikalari TAS (a)		51,754		83,731
Ford Otomotiv Sanayi		2,700		36,120
Haci Omer Sabanci Holding AS		32,457		122,268
KOC Holding AS		17,992		83,200
Petkim Petrokimya Holding (a)		37,514		56,701
TAV Havalimanlari Holding AS		2,171		18,431
Tofas Turk Otomobil Fabrikasi AS		4,704		32,101
Tupras Turkiye Petrol Rafinerileri AS (b)		5,076		128,593
Turk Hava Yollari (b)		26,638		87,439
Turk Telekomunikasyon AS		10,009		26,329
Turkcell Iletisim Hizmetleri AS (a)		33,444		153,861
Turkiye Garanti Bankasi AS		133,513		416,407
Turkiye Halk Bankasi		25,164		115,921
Turkiye Is Bankasi, Class C		88,347		185,788
Turkiye Sise ve Cam Fabrikalari AS		35,591		47,940
Turkiye Vakiflar Bankasi Tao, Class D (a)		29,827		47,928
Ulker Biskuvi Sanayi		3,956		27,602
Yapi ve Kredi Bankasi		65,139		95,705

				2,458,417
United Arab Emirates — 0.1%
Abu Dhabi Commercial Bank PJSC		80,031		166,657
Aldar Properties PJSC		61,586		45,155
Arabtec Holding Co. (b)		77,075		54,591
DP World Ltd.		10,522		225,171
Dubai Financial Market		39,225		20,954
Dubai Islamic Bank PJSC		12,579		23,282
Emaar Malls Group PJSC (b)		81,000		73,358
Emaar Properties PJSC		172,958		367,699
First Gulf Bank PJSC		37,011		152,727
National Bank of Abu Dhabi PJSC		10,583		31,635

				1,161,229
United Kingdom — 12.7%
3i Group PLC		35,640		289,189
Aberdeen Asset Management PLC		36,371		230,703
Admiral Group PLC		8,110		176,719
Aggreko PLC (a)		10,191		230,187
AMEC PLC		12,361		158,755
Anglo American PLC (a)		65,336		943,872
Antofagasta PLC		26,475		286,561
ARM Holdings PLC		58,104		950,807
Ashtead Group PLC		18,160		312,984
Associated British Foods PLC		15,981		720,139
AstraZeneca PLC		52,543		3,325,459
Aviva PLC		175,397		1,358,516
Babcock International Group PLC		7,644		129,508
BAE Systems PLC		133,248		944,119
Barclays PLC		668,847		2,741,368
Barratt Developments PLC		29,464		284,190
BG Group PLC		145,215		2,418,527
BHP Billiton PLC		86,224		1,695,308
BP PLC		755,378		5,013,197
British American Tobacco PLC		77,194		4,156,318
British Land Co. PLC (a)		48,877		608,817
BT Group PLC		344,589		2,440,153
Bunzl PLC		15,366		419,176
Burberry Group PLC		21,472		529,722
Capita PLC		34,003		660,699

See Notes to Financial Statements.



32	BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

Total International ex U.S. Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
United Kingdom (continued)
Carnival PLC		6,665	$	340,779
Centrica PLC		225,943		937,546
Cobham PLC		41,466		171,255
Compass Group PLC		68,976		1,140,804
Croda International PLC		4,442		192,068
Diageo PLC		105,999		3,069,707
Direct Line Insurance Group PLC		51,669		272,618
Dixons Carphone PLC		35,632		253,375
easyJet PLC		8,921		216,856
Fiat Chrysler Automobiles NV (b)		45,604		669,017
Fresnillo PLC		19,656		214,345
G4S PLC		59,279		249,952
GKN PLC		63,245		332,278
GlaxoSmithKline PLC		200,128		4,161,048
Hammerson PLC		28,123		271,789
Hargreaves Lansdown PLC		8,513		154,239
HSBC Holdings PLC		801,199		7,174,262
ICAP PLC		22,617		188,128
IMI PLC		8,553		151,195
Imperial Tobacco Group PLC		42,416		2,042,847
Inmarsat PLC		16,450		236,477
InterContinental Hotels Group PLC (a)		10,956		441,710
Intertek Group PLC		7,802		299,987
Intu Properties PLC (a)		29,315		141,611
Investec PLC		22,696		203,923
ITV PLC		160,513		664,112
J. Sainsbury PLC (a)		40,957		170,493
Johnson Matthey PLC		10,652		507,974
Kingfisher PLC		117,839		642,751
Land Securities Group PLC		37,586		710,716
Legal & General Group PLC		258,017		1,008,862
Lloyds Banking Group PLC (b)		2,317,520		3,110,570
London Stock Exchange Group PLC		15,659		582,525
Marks & Spencer Group PLC		74,950		632,273
Meggitt PLC		29,906		218,993
Melrose Industries PLC		37,416		145,426
Merlin Entertainments PLC (c)		43,755		293,458
Mondi PLC		10,541		226,940
National Grid PLC		152,381		1,961,269
Next PLC		7,051		825,262
Old Mutual PLC		235,852		746,555
Pearson PLC		34,111		645,873
Persimmon PLC (b)		12,698		393,967
Petrofac Ltd.		7,867		114,470
Prudential PLC		104,211		2,511,436
Randgold Resources Ltd.		4,349		291,715
Reckitt Benckiser Group PLC		26,172		2,256,923
Reed Elsevier PLC		49,583		805,757
Rexam PLC		41,271		357,945
Rio Tinto PLC		51,293		2,109,833
Rolls-Royce Holdings PLC (b)		78,889		1,077,564
Royal Bank of Scotland Group PLC (b)		99,459		549,959
Royal Mail PLC		22,777		184,141
RSA Insurance Group PLC		41,822		260,793
SABMiller PLC		39,866		2,067,068
The Sage Group PLC		41,759		336,140
Schroders PLC		7,414		369,935
Segro PLC		24,988		159,209
Severn Trent PLC		8,564		279,840
Sky PLC		42,277		688,592
Smith & Nephew PLC		37,845		640,234
Common Stocks	Shares		Value
United Kingdom (concluded)
Smiths Group PLC		14,211		251,899
Sports Direct International PLC (b)		11,394		128,466
SSE PLC		42,055		1,014,972
Standard Chartered PLC		108,736		1,741,341
Standard Life PLC		96,440		672,480
Tate & Lyle PLC (a)		18,661		152,323
Taylor Wimpey PLC		96,846		282,430
Tesco PLC		340,304		1,133,818
Travis Perkins PLC		9,375		310,498
Tullow Oil PLC		46,858		250,422
Unilever PLC		54,336		2,333,141
United Utilities Group PLC		30,414		425,990
Vodafone Group PLC		1,089,153		3,973,113
The Weir Group PLC		8,705		232,008
Whitbread PLC		7,941		616,930
William Hill PLC		34,609		219,228
WM Morrison Supermarkets PLC (a)		110,313		313,154
Wolseley PLC		12,407		791,248
WPP PLC		54,042		1,213,036

				99,158,879
Total Common Stocks — 98.1%				764,731,864



Rights
Singapore — 0.0%
Jardine Cycle & Carriage, Ltd. (Expires 07/20/15) (b)		444		2,343
Spain — 0.0%
Abertis Infraestructuras SA (Expires 07/17/15) (b)		20,662		17,046
Repsol SA (Expires 07/03/15) (a)(b)		49,442		25,631
Zardoya Otis SA (Expires 07/31/15) (a)(b)		4,309		1,878

				44,555
Total Rights — 0.0%				46,898
Total Long-Term Investments (Cost — $728,437,921) — 98.1%				764,778,762



Short-Term Securities
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (d)(e)		3,877,677		3,877,677
BlackRock Cash Funds: Prime, SL Agency Shares, 0.13% (d)(e)(f)		33,165,069		33,165,069
Total Short-Term Securities (Cost — $37,042,746) — 4.8%				37,042,746
Total Investments (Cost — $765,480,667) — 102.9%				801,821,508
Liabilities in Excess of Other Assets — (2.9)%				(22,555,272	)

Net Assets — 100.0%			$	779,266,236

See Notes to Financial Statements.



BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015	33


Schedule of Investments (continued)		Total International ex U.S. Index Master Portfolio


Notes to Schedule of Investments

(a)

Security, or a portion of security, is on loan.

(b)

Non-income producing security.

(c)

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

(d)

Represents the current yield as of report date.

(e)

During the six months ended June 30, 2015, investments in issuers considered to be affiliates of the Master Portfolio for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


Affiliate	Shares Held at December 31, 2014		Shares Purchased			Shares Sold			Shares Held at June 30, 2015		Value at June 30, 2015		Income			Realized Gain
BlackRock Cash Funds: Institutional, SL Agency Shares		22,280,035		—			(18,402,358	)¹		3,877,677	$	3,877,677	$	9,665			—
BlackRock Cash Funds: Prime, SL Agency Shares		2,952,909		30,212,160	²		—			33,165,069	$	33,165,069	$	177,861	³		—
iShares India 50 ETF		288,798		65,800			(354,598	)		—		—		—		$	1,817,636
¹ Represents net shares sold.
² Represents net shares purchased.
³ Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.

(f)

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


Contracts Long		Issue	Exchange	Expiration	Notional Value		Unrealized Depreciation
	20	S&P/TSX 60 Index	Montreal Exchange	September 2015	$	843,900	$	(11,909	)
	73	E-Mini MSCI EAFE Index	NYSE Life U.S.	September 2015	$	6,694,100		(226,148	)
	45	MSCI Emerging Markets Mini Index	NYSE Life U.S.	September 2015	$	2,158,650		(16,938	)
	Total						$	(254,995	)

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that the Master Portfolio 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)

•

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Master Portfolio’s own assumptions used in determining the fair value of investments and derivative financial instruments)

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Master Portfolio’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. For information about the Master Portfolio’s policy regarding valuation of investments and derivative financial instruments, refer to Note 2 of the Notes to Financial Statements. As of June 30, 2015, the following tables summarize the Master Portfolio’s investments and derivative financial instruments categorized in the disclosure hierarchy:


	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Common Stocks:
Australia	$	307,576	$	37,245,151		—	$	37,552,727
Austria		—		979,796		—		979,796
Belgium		—		7,251,805		—		7,251,805
Brazil		12,556,865		—		—		12,556,865
Canada		50,737,467		—		—		50,737,467
Chile		2,054,517		—		—		2,054,517
China		742,040		30,879,085		—		31,621,125

See Notes to Financial Statements.



34	BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015


Schedule of Investments (concluded)		Total International ex U.S. Index Master Portfolio


	Level 1			Level 2		Level 3		Total
Assets (concluded):
Investments (concluded):
Common Stocks (concluded):
Colombia	$	861,476		$	—		—	$	861,476
Czech Republic		217,294			—		—		217,294
Denmark		48,900			9,154,015		—		9,202,915
Egypt		—			278,114		—		278,114
Finland		—			4,375,044		—		4,375,044
France		901,943			51,823,007		—		52,724,950
Germany		—			48,703,676		—		48,703,676
Greece		—			—	$	391,142		391,142
Hong Kong		1,445,220			26,220,706		—		27,665,926
Hungary		—			318,117		—		318,117
India		5,866,100			6,927,112		—		12,793,212
Indonesia		26,293			3,733,964		—		3,760,257
Ireland		—			4,819,591		—		4,819,591
Israel		—			3,411,853		—		3,411,853
Italy		—			12,156,833		—		12,156,833
Japan		—			124,959,720		—		124,959,720
Luxembourg		503,989			145,996		—		649,985
Malaysia		962,572			4,185,948		—		5,148,520
Malta		—			106,666		—		106,666
Mexico		7,690,607			—		—		7,690,607
Netherlands		136,188			22,865,713		—		23,001,901
New Zealand		85,792			550,006		—		635,798
Norway		—			3,564,951		—		3,564,951
Peru		753,192			—		—		753,192
Philippines		131,606			1,982,118		—		2,113,724
Poland		343,478			1,949,562		—		2,293,040
Portugal		—			881,846		—		881,846
Qatar		44,840			1,401,730		—		1,446,570
Russia		402,730			6,064,165		—		6,466,895
Singapore		—			7,977,156		—		7,977,156
South Africa		352,016			12,554,768		17		12,906,801
South Korea		823,569			22,967,564		—		23,791,133
Spain		—			19,165,301		—		19,165,301
Sweden		212,867			15,977,979		—		16,190,846
Switzerland		229,372			52,598,087		—		52,827,459
Taiwan		72,777			20,908,035		—		20,980,812
Thailand		—			3,965,714		—		3,965,714
Turkey		326,058			2,132,359		—		2,458,417
United Arab Emirates		225,171			936,058		—		1,161,229
United Kingdom		1,439,913			97,718,966		—		99,158,879
Rights		27,509			19,389		—		46,898
Short-Term Securities		37,042,746			—		—		37,042,746

Total	$	127,572,683		$	673,857,666	$	391,159	$	801,821,508


	Level 1			Level 2		Level 3		Total
Derivative Financial Instruments¹
Liabilities:
Equity contracts	$	(254,995	)		—		—	$	(254,995	)
¹ Derivative financial instruments are financial futures contracts, which are valued at the unrealized appreciation (depreciation) on the instrument.

The Master Portfolio may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of June 30, 2015, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:


	Level 1		Level 2			Level 3	Total
Assets:
Cash pledged for financial futures contracts	$	346,580		—		—	$	346,580
Foreign currency at value		3,410,090		—		—		3,410,090
Liabilities:
Collateral on securities loaned at value		—	$	(33,165,069	)	—		(33,165,069	)

Total	$	3,756,670	$	(33,165,069	)	—	$	(29,408,399	)

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015	35


Statement of Assets and Liabilities		Total International ex U.S. Index Master Portfolio


June 30, 2015 (Unaudited)

Assets
Investments at value — unaffiliated (including securities loaned at value of $31,219,317) ( cost — $728,437,921)	$	764,778,762
Investments at value — affiliated (cost — $37,042,746)		37,042,746
Foreign currency at value (cost — $3,403,890)		3,410,090
Cash pledged for financial futures contracts		346,580
Receivables:
Contributions from investors		4,678,841
Dividends		2,284,057
Securities lending income — affiliated		24,050
Investments sold		17,478
Variation margin receivable on financial futures contracts		17,426
Prepaid expenses		36

Total assets		812,600,066


Liabilities
Collateral on securities loaned at value		33,165,069
Payables:
Investment advisory fees		19,267
Other accrued expenses payable		149,494

Total liabilities		33,333,830

Net Assets	$	779,266,236


Net Assets Consist of
Investors’ capital	$	743,184,361
Net unrealized appreciation (depreciation)		36,081,875

Net Assets	$	779,266,236


Statement of Operations		Total International ex U.S. Index Master Portfolio


Six Months Ended June 30, 2015 (Unaudited)

Investment Income
Dividends	$	14,888,537
Securities lending — affiliated — net		177,861
Interest — affiliated		9,665
Foreign taxes withheld		(1,905,699	)

Total income		13,170,364


Expenses
Investment advisory		134,103
Custodian		153,294
Professional		26,355
Independent Trustees		9,720
Printing		37
Miscellaneous		1,836

Total expenses		325,345
Less fees waived and/or reimbursed by the Manager		(24,634	)

Total expenses after fees waived		300,711

Net investment income		12,869,653


Realized and Unrealized Gain (Loss)
Net realized gain (loss) from:
Investments — unaffiliated (net of $3,929 foreign capital gain tax)		(1,188,689	)
Investments — affiliated		1,817,636
Financial futures contracts		1,495,770
Foreign currency transactions		(225,717	)

		1,899,000

Net change in unrealized appreciation (depreciation) on:
Investments — unaffiliated		17,533,969
Investments — affiliated		(1,328,571	)
Financial futures contracts		(262,438	)
Foreign currency translations		57,051

		16,000,011

Net realized and unrealized gain		17,899,011

Net Increase in Net Assets Resulting from Operations	$	30,768,664


Statements of Changes in Net Assets


	Total International ex U.S. Index Master Portfolio
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	12,869,653		$	13,100,009
Net realized gain		1,899,000			23,574,766
Net change in unrealized appreciation (depreciation)		16,000,011			(64,382,962	)

Net increase (decrease) in net assets resulting from operations		30,768,664			(27,708,187	)


Capital Transactions
Proceeds from contributions		178,644,259			726,393,826
Value of withdrawals		(21,344,120	)		(663,931,697	)

Net increase in net assets derived from capital transactions		157,300,139			62,462,129


Net Assets
Total increase in net assets		188,068,803			34,753,942
Beginning of period		591,197,433			556,443,491

End of period	$	779,266,236		$	591,197,433


Financial Highlights		Total International ex U.S. Index Master Portfolio


	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,							Period from June 30, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013		2012		Period from June 30, 2011¹ to December 31, 2011

Total Return
Total return		4.39%	²		(4.68)%			13.96%		16.65%		(18.04	)%²


Ratio to Average Net Assets
Total expenses		0.09%	³		0.15%	⁴		0.25%		0.42%		1.47%	^3,5

Total expenses after fees waived and/or reimbursed		0.08%	³		0.12%	⁴		0.24%		0.32%		0.33%	³

Net investment income		3.48%	³		3.08%	⁴		2.60%		2.23%		1.76%	³


Supplemental Data
Net assets, end of period (000)	$	779,266		$	591,197		$	556,443	$	381,056		$43,554

Portfolio turnover rate		3%			49%			36%		42%		4%

Commencement of operations.

Aggregate total return.

Annualized.

⁴

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.01%.

⁵

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 1.48%.


Notes to Financial Statements (Unaudited)				Total International ex U.S. Index Master Portfolio

1. Organization:

Total International ex U.S. Index Master Portfolio (the “Master Portfolio”) (formerly known as ACWI ex-U.S. Index Master Portfolio), a series of Master Investment Portfolio (“MIP”), is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a diversified, open-end management investment company. MIP is organized as a Delaware statutory trust.

The Master Portfolio, together with certain other registered investment companies advised by BlackRock Fund Advisors (the “Manager”) or its affiliates, is included in a complex of open-end funds referred to as the Equity-Liquidity Complex.

2. Significant Accounting Policies:

The Master Portfolio’s 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 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 Master Portfolio is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. The following is a summary of significant accounting policies followed by the Master Portfolio:

Equity investments traded on a recognized securities exchange are valued at the official close price each day, if available. For equity investments traded on more than one exchange, the official close price on the exchange where the stock is primarily traded is used. 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. Financial futures contracts traded on exchanges are valued at their last sale price. Investments in open-end registered investment companies are valued at NAV each business day.

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 business on the NYSE. Forward foreign currency exchange contracts are valued at the mean between the bid and ask prices and are determined as of the close of business on the NYSE. Interpolated values are derived when the settlement date of the contract is an interim date for which quotations are not available.

In the event that the 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 Value Investments”). When determining the price for Fair Value Investments, the Global Valuation Committee, or its delegate, seeks to determine the price that the Master Portfolio 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 consistent with the principles of fair value measurement, which include the market approach, income approach and/or in the case of recent investments, the cost approach, as appropriate. The market approach generally consists of using comparable market transactions. The income approach generally is used to discount future cash flows to present value and is adjusted for liquidity as appropriate. These factors include but are not limited to: (i) attributes specific to the investment or asset; (ii) the principal market for the investment or asset; (iii) the customary participants in the principal market for the investment or asset; (iv) data assumptions by market participants for the investment or asset, if reasonably available; (v) quoted prices for similar investments or assets in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, recovery rates, liquidation amounts and/or default rates. Due to the inherent uncertainty of valuations of such investments, the fair values may differ from the values that would have been used had an active market existed. The Global Valuation Committee, or its delegate, employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Master Portfolio’s pricing vendors, regular reviews of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices and large movements in market values and reviews of any market related activity. The pricing of all Fair Value Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.



40	BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015


Notes to Financial Statements (continued)		Total International ex U.S. Index Master Portfolio

Foreign Currency: The Master Portfolio’s books and records are maintained in U.S. dollars. Purchases and sales of investment securities are recorded at the rates of exchange prevailing on the respective date of such transactions. Generally, when the U.S. dollar rises in value against a foreign currency, the Master Portfolio’s investments denominated in that currency will lose value because that currency is worth fewer U.S. dollars; the opposite effect occurs if the U.S. dollar falls in relative value.

The Master Portfolio does not isolate the portion of the results of operations arising as a result of changes in the foreign exchange rates from the changes in the market prices of investments held or sold for financial reporting purposes. Accordingly, the effects of changes in foreign currency 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 Master Portfolio 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 federal income tax purposes.

Segregation and Collateralization: In cases where the Master Portfolio enters into certain investments (e.g., financial futures contracts and forward foreign currency exchange contracts) that would be “senior securities” for 1940 Act purposes, the Master Portfolio may segregate or designate on its books and records cash or liquid securities having a market value at least equal to the amount of the Master Portfolio’s future obligations under such investments. Doing so allows the investment to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Master Portfolio may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments or obligations.

Investment Transactions and Investment Income: For financial reporting purposes, investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on investment transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend date. Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when the Master Portfolio is informed of the ex-dividend date. 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, some 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.

Other: Expenses directly related to the Master Portfolio are charged to the Master Portfolio. Other operating expenses shared by several funds are prorated among those funds on the basis of relative net assets or other appropriate methods.

The Master Portfolio has an arrangement with its custodian whereby fees may be reduced by credits earned on uninvested cash balances, which, if applicable, are shown as fees paid indirectly in the Statement of Operations. The custodian imposes fees on overdrawn cash balances, which can be offset by accumulated credits earned or may result in additional custody charges.

3. Securities and Other Investments:

Securities Lending: The Master Portfolio may lend its securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Master Portfolio 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 Master Portfolio 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 Master Portfolio and any additional required collateral is delivered to the Master Portfolio, or excess collateral returned by the Master Portfolio, on the next business day. During the term of the loan, the Master Portfolio is entitled to all distributions made on or in respect of the loaned securities. 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.

The market value of securities on loan, which were classified as common stocks and rights in the Master Portfolio’s Schedule of Investments, and the value of the 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. As of June 30, 2015, any securities on loan were collateralized by cash. The cash collateral invested by the securities lending agent, BlackRock Institutional Trust Company, N.A. (“BTC”), if any, is disclosed in the Schedule of Investments.



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Notes to Financial Statements (continued)		Total International ex U.S. Index Master Portfolio

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, the borrower can resell or re-pledge the loaned securities, and the Master Portfolio can reinvest cash collateral, or, upon an event of default, resell or re-pledge the collateral.

As of June 30, 2015, the following table is a summary of the Master Portfolio’s securities lending agreements by counterparty, which are subject to offset under an MSLA:


Counterparty	Securities Loaned at Value		Cash Collateral Received¹			Net Amount
BNP Paribas S.A.	$	38,542	$	(38,542	)		—
Citigroup GlobalMarkets, Inc.		1,692,290		(1,692,290	)		—
Credit Suisse Securities (USA) LLC		4,908,920		(4,908,920	)		—
Deutsche Bank Securities, Inc.		460,494		(460,494	)		—
Goldman Sachs & Co.		169,970		(169,970	)		—
JPMorgan Securities LLC		3,750,717		(3,750,717	)		—
Macquarie Capital (USA) Inc.		753,201		(753,201	)		—
Merrill Lynch, Pierce, Fenner & Smith, Inc.		3,217,461		(3,217,461	)		—
Morgan Stanley & Co. LLC		10,198,158		(10,198,158	)		—
Nomura Securities International, Inc.		3,210,737		(3,210,737	)		—
SG Americas Securities LLC		38,881		(38,881	)		—
State Street Bank and Trust Co.		2,779,946		(2,779,946	)		—

Total	$	31,219,317	$	(31,219,317	)		—

Collateral with a value of $33,165,069 has been received in connection with securities lending agreements. Collateral received in excess of the value of securities loaned from the individual counterparty is not shown for financial reporting purposes.

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 Master Portfolio benefits from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of the securities loaned if the collateral received does not cover the value on the securities loaned in the event of borrower default. The Master Portfolio could suffer 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.

4. Derivative Financial Instruments:

The Master Portfolio engages in various portfolio investment strategies using derivative contracts both to increase the returns of the Master Portfolio and/or to manage economically its exposure to certain risks such as equity, foreign currency exchange rate or other risk. These contracts may be transacted on an exchange or over-the-counter (“OTC”).

Financial Futures Contracts: The Master Portfolio invests in long and/or short positions in financial futures contracts and options on financial futures contracts to gain exposure to, or economically hedge against, changes in interest rates (interest rate risk), changes in the value of equity securities (equity risk) or foreign currencies (foreign currency exchange rate risk). Financial futures contracts are agreements between the Master Portfolio and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and at a specified date. Depending on the terms of the particular contract, financial futures contracts are settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date.

Upon entering into a financial futures contract, the Master Portfolio is required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contract’s size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Securities deposited as initial margin are designated on the Schedule of Investments and cash deposited, if any, is recorded on the Statement of Assets and Liabilities as cash pledged for financial futures contracts. Pursuant to the contract, the Master Portfolio agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin. Variation margin is recorded by the Master Portfolio as unrealized appreciation (depreciation) and, if applicable, as a receivable or payable for variation margin in the Statement of Assets and Liabilities.



42	BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015


Notes to Financial Statements (continued)		Total International ex U.S. Index Master Portfolio

When the contract is closed, the Master Portfolio records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of financial futures contracts involves the risk of an imperfect correlation in the movements in the price of financial futures contracts, interest or foreign currency exchange rates and the underlying assets.

Forward Foreign Currency Exchange Contracts: The Master Portfolio enters into forward foreign currency exchange contracts as an economic hedge against either specific transactions or portfolio instruments or to obtain exposure to, or hedge exposure away from, foreign currencies (foreign currency exchange rate risk). A forward foreign currency exchange contract is an agreement between two parties to buy and sell a currency at a set exchange rate on a future date. Forward foreign currency exchange contracts, when used by the Master Portfolio, help to manage the overall exposure to the currencies in which some of the investments held by the Master Portfolio are denominated. Non-deliverable forward foreign currency exchange contracts are settled with the counterparty in cash without the delivery of foreign currency. The contract is marked-to-market daily and the change in market value is recorded by the Master Portfolio as an unrealized gain or loss. When the contract is closed, the Master Portfolio records a realized gain or loss equal to the difference between the value at the time it was opened and the value at the time it was closed. The use of forward foreign currency exchange contracts involves the risk that the value of a forward foreign currency exchange contract changes unfavorably due to movements in the value of the referenced foreign currencies.

The following is a summary of the Master Portfolio’s derivative financial instruments categorized by risk exposure:

Includes cumulative appreciation (depreciation) on financial futures contracts, if any, as reported in Schedule of Investments. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.


The Effect of Derivative Financial Instruments in the Statement of Operations Six Months Ended June 30, 2015
	Net Realized Gain From		Net Change in Unrealized Appreciation (Depreciation) on
Forward foreign currency exchange contracts:
Forward foreign currency transactions/translations		$786		—
Equity contracts:
Financial futures contracts		1,495,770		$(262,438)

Total		$1,496,556		$(262,438)

For the six months ended June 30, 2015, the average quarterly balances of outstanding derivative financial instruments were as follows:


Financial futures contracts:
Average notional value of contracts — long	$	10,534,079
Forward foreign currency exchange contracts:
Average amounts purchased — in USD	$	4,647	¹
Average amounts sold — in USD	$	51,487

Actual amounts for the period are shown due to limited outstanding derivative financial instruments as of each quarter.

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

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



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Notes to Financial Statements (continued)		Total International ex U.S. Index Master Portfolio

In order to better define its contractual rights and to secure rights that will help the Master Portfolio mitigate its counterparty risk, the Master Portfolio may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its counterparties. An ISDA Master Agreement is a bilateral agreement between the Master Portfolio and a counterparty that governs certain OTC derivatives and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, the Master Portfolio may, under certain circumstances, offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default including the bankruptcy or insolvency of the counterparty. Bankruptcy or insolvency laws of a particular jurisdiction may restrict or prohibit the right of offset in bankruptcy, insolvency or other events. In addition, certain ISDA Master Agreements allow counterparties to terminate derivative contracts prior to maturity in the event the Master Portfolio’s net assets decline by a stated percentage or the Master Portfolio fails to meet the terms of its ISDA Master Agreements. The result would cause the Master Portfolio to accelerate payment of any net liability owed to the counterparty.

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

Cash collateral that has been pledged to cover obligations of the Master Portfolio and cash collateral received from the counterparty, if any, is reported separately on the Statement of Assets and Liabilities as cash pledged as collateral and cash received as collateral, respectively. Non-cash collateral pledged by the Master Portfolio, if any, is noted in the Schedule of Investments. Generally, the amount of collateral due from or to a party has to exceed a minimum transfer amount threshold (typically either $250,000 or $500,000) before a transfer is required, which is determined at the close of business of the Master Portfolio. Any additional required collateral is delivered to/pledged by the Master Portfolio on the next business day. Typically, the Master Portfolio and its counterparties are not permitted to sell, re-pledge or use the collateral they receive. To the extent amounts due to the Master Portfolio from its counterparties are not fully collateralized, the Master Portfolio bears the risk of loss from counterparty non-performance. Likewise, to the extent the Master Portfolio has delivered collateral to a counterparty and stands ready to perform under the terms of its agreement with such counterparty, the Master Portfolio bears the risk of loss from a counterparty in the amount of the value of the collateral in the event the counterparty fails to return such collateral.

For financial reporting purposes, the Master Portfolio does not offset derivative assets and derivative liabilities that are subject to netting arrangements, if any, in the Statement of Assets and Liabilities.

5. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock for 1940 Act purposes.

MIP, on behalf of the Master Portfolio, entered into an Investment Advisory Agreement with the Manager, the Master Portfolio’s investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory and administration services. The Manager is responsible for the management of the Master Portfolio’s portfolio and provides the necessary personnel, facilities, equipment and certain other services to the operations of the Master Portfolio. Effective April 30, 2015, for such services, the Master Portfolio pays the Manager a monthly fee based on a percentage of the Master Portfolio’s average daily net assets at an annual rate of 0.03%. Prior to April 30, 2015, the Master Portfolio paid the Manager a monthly fee at an annual rate of 0.04%.

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 Master Portfolio’s business, in order to limit expenses of certain feeder funds which invest their assets in the Master Portfolio. The Manager has agreed not to reduce or discontinue this contractual waiver or reimbursement prior to May 1, 2016, unless approved by the Board, including a majority of the Independent Trustees.

The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the Master Portfolio pays to the Manager indirectly through its investment in the iShares India 50 ETF. However, the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid in connection with the Master Portfolio’s investments in other affiliated investment companies, if any. This amount is included in fees waived and/or reimbursed by the Manager in the Statement of Operations. For the six months ended June 30, 2015, the amount waived was $20,753. This voluntary waiver expired on April 30, 2015.



44	BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015


Notes to Financial Statements (continued)		Total International ex U.S. Index Master Portfolio

The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the Master Portfolio pays to the Manager indirectly through its investment in affiliated money market funds. This amount is included in fees waived by the Manager in the Statement of Operations. However, the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid in connection with the Master Portfolio’s investments in other affiliated investment companies, if any. For the six months ended June 30, 2015, the amount waived was $3,881.

The U.S. Securities and Exchange Commission has issued an exemptive order which permits BTC, an affiliate of the Manager, to serve as securities lending agent for the Master Portfolio, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending. The Master Portfolio is responsible for fees in connection with the investment of cash collateral received for securities on loan in a money market fund managed by the Manager or its affiliates, however, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees the Master Portfolio bears to an annual rate of 0.04% (the “collateral investment fees”).

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 fees. The Master Portfolio retains a portion of securities lending income and remits a remaining portion to BTC as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, the Master Portfolio retains 80% of securities lending income, and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees. In addition, commencing the business day following the date that the aggregate securities lending income earned across certain funds in the Equity-Liquidity Complex in a calendar year exceeds a specified threshold, the Master Portfolio, pursuant to the securities lending agreement, will retain for the remainder of the calendar year securities lending income in an amount equal to 85% of securities lending income, and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.

The share of securities lending income earned by the Master Portfolio is shown as securities lending — affiliated — net in the Statement of Operations. For the six months ended June 30, 2015, the Master Portfolio paid BTC $44,407 for securities lending agent services and collateral investment fees.

Certain officers and/or trustees of MIP are officers and/or directors of BlackRock or its affiliates.

6. Purchases and Sales:

For the six months ended June 30, 2015, purchases and sales of investments, excluding short-term securities, were $203,568,701 and $21,805,757, respectively.

7. Income Tax Information:

The Master Portfolio is classified as a partnership for federal income tax purposes. As such, each investor in the Master Portfolio is treated as the owner of its proportionate share of net assets, income, expenses and realized and unrealized gains and losses of the Master Portfolio. Therefore, no federal income tax provision is required. It is intended that the Master Portfolio’s assets will be managed so an investor in the Master Portfolio can satisfy the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended.

The Master Portfolio 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 Master Portfolio’s U.S. federal tax returns remains open for each of the three years ended December 31, 2014 and the period ended December 31, 2011. The statutes of limitations on the Master Portfolio’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 Master Portfolio as of June 30, 2015, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Master Portfolio’s financial statements.

As of June 30, 2015, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:


Tax cost	$	768,276,867
Gross unrealized appreciation	$	77,517,934
Gross unrealized depreciation		(43,973,293	)

Net unrealized appreciation	$	33,544,641



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Notes to Financial Statements (concluded)		Total International ex U.S. Index Master Portfolio

8. Bank Borrowings:

MIP, on behalf of the Master Portfolio, along with certain other funds managed by the Manager and its affiliates (“Participating Funds”), is a party to a 364-day, $2.1 billion credit agreement with a group of lenders, under which the Master Portfolio may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Master Portfolio, can borrow up to an aggregate commitment amount of $1.6 billion, subject to asset coverage and other limitations as specified in the agreement. The credit agreement has the following terms: a fee of 0.06% 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 2016 unless extended or renewed. Participating Funds paid administration, legal and arrangement fees, and along with commitment 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 June 30, 2015, the Master Portfolio did not borrow under the credit agreement.

9. Principal Risks:

In the normal course of business, the Master Portfolio invests in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations, including to pay principal and interest when due (issuer credit risk). The value of securities held by the Master Portfolio may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Master Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency, interest rate and price fluctuations. Similar to issuer credit risk, the Master Portfolio may be exposed to counterparty credit risk, or the risk that an entity with which the Master Portfolio has unsettled or open transactions may fail to or be unable to perform on its commitments. The Master Portfolio 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 Master Portfolio to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Master Portfolio’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Statement of Assets and Liabilities, less any collateral held by the Master Portfolio.

The Master Portfolio invests a substantial amount of its assets in issuers located in a single country or a limited number of countries. When the Master Portfolio concentrates its investments in this manner, it assumes the risk that economic, political and social conditions in those countries may have a significant impact on their investment performance. Foreign issuers may not be subject to the same uniform accounting, auditing and financial reporting standards and practices as used in the United States. Foreign securities markets may also be less liquid, more volatile, and less subject to governmental supervision not typically associated with investing in U.S. securities. Investment percentages in specific countries are presented in the Schedule of Investments.

The Master Portfolio invests a significant portion of its assets in securities of issuers located in Europe or with significant exposure to European issuers or countries. The European financial markets have recently experienced volatility and adverse trends due to concerns about economic downturns in, or rising government debt levels of, several European countries. These events may spread to other countries in Europe and may affect the value and liquidity of certain of the Master Portfolio’s investments.

As of June 30, 2015, the Master Portfolio had the following industry classifications:


Industry	Percent of Long-Term Investments
Commercial Banks		15	%
Pharmaceuticals		7
Oil, Gas & Consumable Fuels		6
Insurance		6
Other¹		66

All other industries held were each less than 5% of long-term investments.

10. Subsequent Events:

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



46	BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015


Disclosure of Investment Advisory Agreement

Activities and Composition of the Board

On the date of the May Meeting, the Board consisted of fourteen individuals, thirteen of whom were not “interested persons” of the Master Fund or the Fund as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Board Members”). The Board Members are responsible for the oversight of the operations of the Master Fund or the Fund, as pertinent, and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Board Members have retained independent legal counsel to assist them in connection with their duties. The Chair of the Board is an Independent Board Member. The Board has established five standing committees: an Audit Committee, a Governance and Nominating Committee, a Compliance Committee, a Performance Oversight and Contract Committee and an Executive Committee, each of which is chaired by an Independent Board Member and composed of Independent Board Members (except for the Executive Committee, which also has one interested Board Member).

The Agreement

Pursuant to the 1940 Act, the Board is required to consider the continuation of the Agreement on an annual basis. The Board has four quarterly meetings per year, each extending over two days, a fifth one-day meeting to consider specific information surrounding the consideration of renewing the Agreement, and additional in-person and telephonic meetings as needed. In connection with this year-long deliberative process, the Board assessed, among other things, the nature, extent and quality of the services provided to the Master Portfolio and the Portfolio by BlackRock, BlackRock’s personnel and affiliates, including (as applicable) investment management services; administrative and shareholder services; the oversight of fund service providers; marketing services; risk oversight; compliance; and ability to meet applicable legal and regulatory requirements.

The Board, acting directly and through its committees, considers at each of its meetings, and from time to time as appropriate, factors that are relevant to its annual consideration of the renewal of the Agreement, including the services and support provided by BlackRock to the Master Portfolio, the Portfolio and their shareholders. Among the matters the Board considered were: (a) investment performance for one-year, three-year, five-year and/or since inception periods, as applicable, against peer funds, applicable benchmark, and performance metrics, as applicable, as well as senior management’s and portfolio managers’ analysis of the reasons for any over performance or underperformance relative to its peers, benchmark, and other performance metrics, as applicable; (b) fees, including advisory, administration, if applicable, and other amounts paid to BlackRock and its affiliates by the Master Portfolio and/or the Portfolio for services, such as marketing and distribution, call center and fund accounting; (c) the Master Portfolio’s and /or the Portfolio’s operating expenses and how BlackRock allocates expenses to the Master Portfolio and the Portfolio; (d) the resources devoted to, risk oversight of, and compliance reports relating to, implementation of the Master Portfolio’s and the Portfolio’s investment objective(s), policies and restrictions, and meeting new regulatory requirements; (e) the Master Fund’s and the Fund’s compliance with its respective compliance policies and procedures; (f) the nature, cost and character of non-investment management services provided by BlackRock and its affiliates; (g) BlackRock’s and other service providers’ internal controls and risk and compliance oversight mechanisms; (h) BlackRock’s implementation of the proxy voting policies approved by the Board; (i) the use of brokerage commissions and execution quality of portfolio transactions; (j) BlackRock’s implementation of the Master Fund’s and/or the Fund’s valuation and liquidity procedures; (k) an analysis of management fees for products with similar investment mandates across the open-end fund, exchange-traded fund (“ETF”), closed-end fund and institutional account product channels, as applicable, and the similarities and differences between these products and the services provided as compared to the Master Portfolio and/or the Portfolio; (l) BlackRock’s compensation methodology for its investment professionals and the incentives it creates, along with investment professionals’ investments in the fund(s) they manage; and (m) periodic updates on BlackRock’s business.



BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015	47


Disclosure of Investment Advisory Agreement (continued)

Rock’s management structure; portfolio turnover, execution quality and use of soft dollars; BlackRock’s portfolio manager compensation and performance accountability; marketing support for the funds; services provided to the funds by BlackRock affiliates; and BlackRock’s oversight of relationships with third party service providers.

Board Considerations in Approving the Agreement

The Approval Process: Prior to the April Meeting, the Board requested and received materials specifically relating to the Agreement. The Board is continuously engaged in a process with its independent legal counsel and BlackRock to review the nature and scope of the information provided to better assist its deliberations. The materials provided in connection with the April Meeting included (a) information independently compiled and prepared by Lipper, Inc. (“Lipper”) on fees and expenses of the Master Portfolio and the Portfolio, as applicable, as compared with a peer group of funds as determined by Lipper (“Expense Peers”) and the investment performance of the Portfolio as compared with a peer group of funds as determined by Lipper¹, as well as the gross investment performance of the Portfolio as compared with its benchmark; (b) information on the profits realized by BlackRock and its affiliates pursuant to the Agreement and a discussion of fall-out benefits to BlackRock and its affiliates; (c) a general analysis provided by BlackRock concerning investment management fees charged to other clients, such as institutional clients, sub-advised mutual funds, ETFs and closed-end funds, under similar investment mandates, as well as the performance of such other clients, as applicable; (d) review of non-management fees; (e) the existence, impact and sharing of potential economies of scale; (f) a summary of aggregate amounts paid by the Master Portfolio and/or the Portfolio to BlackRock; (g) sales and redemption data regarding the Portfolio’s shares; and (h) if applicable, a comparison of management fees to similar BlackRock open-end funds, as classified by Lipper.

At the April Meeting, the Board reviewed materials relating to its consideration of the Agreement. As a result of the discussions that occurred during the April Meeting, and as a culmination of the Board’s year-long deliberative process, the Board presented BlackRock with questions and requests for additional information. BlackRock responded to these requests with additional written information in advance of the May Meeting.

At the May Meeting, the Board of the Master Fund, including the Independent Board Members, approved the continuation of the Agreement between the Manager and the Master Fund with respect to the Master Portfolio for a one-year term ending June 30, 2016. The Board of the Fund, including the Independent Board Members, also considered the continuation of the Agreement with respect to the Master Portfolio and found the Agreement to be satisfactory. In approving the continuation of the Agreement, the Board of the Master Fund considered: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of the Master Portfolio, the Portfolio and BlackRock; (c) the advisory fee and the cost of the services and profits to be realized by BlackRock and its affiliates from their relationship with the Master Portfolio and the Portfolio; (d) the Portfolio’s costs to investors compared to the costs of Expense Peers and performance compared to the relevant performance comparison as previously discussed; (e) the sharing of potential economies of scale; (f) fall-out benefits to BlackRock and its affiliates as a result of its relationship with the Master Portfolio and the Portfolio; and (g) other factors deemed relevant by the Board Members.

The Board also considered other matters it deemed important to the approval process, such as payments made to BlackRock or its affiliates relating to the distribution of Portfolio shares, securities lending and cash management, services related to the valuation and pricing of portfolio holdings of the Master Portfolio, direct and indirect benefits to BlackRock and its affiliates from their relationship with the Master Portfolio and the Portfolio and advice from independent legal counsel with respect to the review process and materials submitted for the Board’s review. The Board noted the willingness of BlackRock personnel to engage in open, candid discussions with the Board. The Board did not identify any particular information as determinative, and each Board Member may have attributed different weights to the various items considered.

A. Nature, Extent and Quality of the Services Provided by BlackRock: The Board, including the Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of the Portfolio. Throughout the year, the Board compared the Portfolio’s performance to the performance of a comparable group of mutual funds, relevant benchmark, and performance metrics, as applicable. The Board met with BlackRock’s senior management personnel responsible for investment activities, including the senior investment officers. The Board also reviewed the materials provided by the Master Portfolio’s portfolio management team discussing the Master Portfolio’s performance and the Master Portfolio’s investment objective(s), strategies and outlook.

The Board considered, among other factors, with respect to BlackRock: the number, education and experience of investment personnel generally and the Master Portfolio’s portfolio management team; BlackRock’s research capabilities; investments by portfolio managers in the funds they manage; portfolio trading capabilities; use of technology; commitment to compliance; credit analysis capabilities; risk analysis and oversight capabilities; and the approach to training and retaining portfolio managers and other research, advisory and management personnel. The Board engaged in a review of

Funds are ranked by Lipper in quartiles, ranging from first to fourth, where first is the most desirable quartile position and fourth is the least desirable.



48	BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015


Disclosure of Investment Advisory Agreement (continued)

BlackRock’s compensation structure with respect to the Master Portfolio’s portfolio management team and BlackRock’s ability to attract and retain high-quality talent and create performance incentives.

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

B. The Investment Performance of the Master Portfolio, the Portfolio and BlackRock: The Board, including the Independent Board Members, also reviewed and considered the performance history of the Master Portfolio and the Portfolio, as applicable. The Board noted that the Portfolio’s investment results correspond directly to the investment results of the Master Portfolio. In preparation for the April Meeting, the Board worked with its independent legal counsel, BlackRock and Lipper to develop a template for, and was provided with, reports independently prepared by Lipper, which included a comprehensive analysis of the Portfolio’s performance. The Board also reviewed a narrative and statistical analysis of the Lipper data that was prepared by BlackRock. In connection with its review, the Board received and reviewed information regarding the investment performance of the Portfolio as compared to other funds in its applicable Lipper category and the gross investment performance of the Portfolio as compared with its benchmark. The Board was provided with a description of the methodology used by Lipper to select peer funds and periodically meets with Lipper representatives to review its methodology. The Board and its Performance Oversight and Contract Committee regularly review, and meet with Master Portfolio management to discuss, the performance of the Master Portfolio and the Portfolio, as applicable, throughout the year.

In evaluating performance, the Board recognized that the performance data reflects a snapshot of a period or as of a particular date and that selecting a different performance period could produce significantly different results. Further, the Board recognized that it is possible that long-term performance can be adversely affected by even one period of significant underperformance so that a single investment decision or theme has the ability to affect long-term performance disproportionately.

The Board noted that for the one-year, three-year and since-inception periods reported, the Portfolio’s gross performance (before expenses and fees), as agreed upon by the Board, was within tolerance of its benchmark, underperformed its benchmark, and underperformed its benchmark, respectively. The Board noted that for each of the past three calendar years the Portfolio’s gross performance was within tolerance. BlackRock believes that gross performance relative to the benchmark is an appropriate performance metric for the Portfolio.

C. Consideration of the Advisory/Management Fees and the Cost of the Services and Profits to be Realized by BlackRock and its Affiliates from their Relationship with the Master Portfolio and the Portfolio: The Board, including the Independent Board Members, reviewed the Master Portfolio’s/Portfolio’s contractual management fee rate compared with the other funds in the Portfolio’s Lipper category. The contractual management fee rate represents a combination of the advisory fee and any administrative fees, before taking into account any reimbursements or fee waivers. The Board also compared the Portfolio’s total expense ratio, as well as the Master Portfolio’s/Portfolio’s actual management fee rate, to those of other funds in the Portfolio’s Lipper category. The total expense ratio represents a fund’s total net operating expenses, including any 12b-1 or non-12b-1 service fees. The total expense ratio gives effect to any expense reimbursements or fee waivers that benefit a fund, and the actual management fee rate gives effect to any management fee reimbursements or waivers that benefit a fund. The Board considered the services provided and the fees charged by BlackRock and its affiliates to other types of clients with similar investment mandates, as applicable, including institutional accounts and sub-advised mutual funds.



BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015	49


Disclosure of Investment Advisory Agreement (continued)

vided for the two prior years. The Board reviewed BlackRock’s profitability with respect to certain other U.S. fund complexes managed by the Manager and/or its affiliates. The Board reviewed BlackRock’s assumptions and methodology of allocating expenses in the profitability analysis, noting the inherent limitations in allocating costs among various advisory products. The Board recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, precision of expense allocations and business mix. As a result, calculating and comparing profitability at individual fund levels is difficult.

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

In addition, the Board considered the cost of the services provided to the Master Portfolio and the Portfolio by BlackRock, and BlackRock’s and its affiliates’ profits relating to the management and distribution of the Master Portfolio and the Portfolio and the other funds advised by BlackRock and its affiliates. As part of its analysis, the Board reviewed BlackRock’s methodology in allocating its costs to the management of the Master Portfolio and the Portfolio. The Board may periodically receive and review information from independent third parties as part of its annual evaluation. BlackRock retained an independent third party to evaluate its cost allocation methodologies in the context of BlackRock’s 1940 Act Fund business. The Board considered the results of that evaluation in connection with BlackRock’s profitability reporting. The Board also considered whether BlackRock has the financial resources necessary to attract and retain high quality investment management personnel to perform its obligations under the Agreement and to continue to provide the high quality of services that is expected by the Board. The Board further considered factors including but not limited to BlackRock’s commitment of time, assumption of risk and liability profile in servicing the Master Portfolio and the Portfolio in contrast to what is required of BlackRock with respect to other products with similar investment mandates across the open-end fund, ETF, closed-end fund, sub-advised mutual fund and institutional account product channels, as applicable.

The Board noted that the Master Portfolio’s/Portfolio’s contractual management fee rate ranked in the first quartile, and that the actual management fee rate and the Portfolio’s total expense ratio ranked in the first and second quartiles, respectively, relative to the Portfolio’s Expense Peers. The Board also noted that BlackRock has contractually agreed to a cap on the Portfolio’s total expenses as a percentage of the Portfolio’s average daily net assets on a class-by-class basis. The Board noted that BlackRock proposed, and the Board agreed to, a lower contractual expense cap on the Portfolio on a class-by-class basis. This expense cap reduction was implemented on April 30, 2015. The Board also noted that BlackRock proposed, and the Board agreed to, a contractual reduction of the Master Portfolio’s advisory fee and the Portfolio’s administration fee. These reductions were implemented on April 30, 2015.

D. Economies of Scale: The Board, including the Independent Board Members, considered the extent to which economies of scale might be realized as the assets of the Master Portfolio and the Portfolio increase, as well as the existence of expense caps, as applicable. The Board also considered the extent to which the Master Portfolio and the Portfolio benefit from such economies and whether there should be changes in the advisory fee rate or breakpoint structure in order to enable the Master Portfolio and the Portfolio to participate in these economies of scale, for example through the use of breakpoints in the advisory fee based upon the asset level of the Master Portfolio. In their consideration, the Board Members took into account the existence of any expense caps and further considered the continuation and/or implementation, as applicable, of such caps.

E. Other Factors Deemed Relevant by the Board Members: The Board, including the Independent Board Members, also took into account other ancillary or “fall-out” benefits that BlackRock or its affiliates may derive from their respective relationships with the Master Portfolio and the Portfolio, both tangible and intangible, such as BlackRock’s ability to leverage its investment professionals who manage other portfolios and risk management personnel, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates as service providers to the Master Portfolio and the Portfolio, including for administrative, distribution, securities lending and cash management services. The Board also considered BlackRock’s overall operations and its efforts to expand the scale of, and improve the quality of, its operations. The Board also noted that BlackRock may use and benefit from third party research obtained by soft dollars generated by certain registered fund transactions to assist in managing all or a number of its other client accounts. The Board further noted that it had considered the investment by BlackRock’s funds in affiliated ETFs without any offset against the management fees payable by the funds to BlackRock.

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

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



50	BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015


Disclosure of Investment Advisory Agreement (concluded)

Conclusion

The Board of the Master Fund, including the Independent Board Members, approved the continuation of the Agreement between the Manager and the Master Fund, with respect to the Master Portfolio, for a one-year term ending June 30, 2016. Based upon its evaluation of all of the aforementioned factors in their totality, the Board of the Master Fund, including the Independent Board Members, was satisfied that the terms of the Agreement were fair and reasonable and in the best interest of the Master Portfolio and its shareholders. The Board of the Fund, including the Independent Board Members, also considered the continuation of the Agreement with respect to the Master Portfolio and found the Agreement to be satisfactory. In arriving at its decision to approve the Agreement, the Board of the Master Fund did not identify any single factor or group of factors as all-important or controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were also assisted by the advice of independent legal counsel in making this determination. The contractual fee arrangements for the Master Portfolio reflect the results of several years of review by the Board Members and predecessor Board Members, and discussions between such Board Members (and predecessor Board Members) and BlackRock. As a result, the Board Members’ conclusions may be based in part on their consideration of these arrangements in prior years.



BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015	51


Officers and Trustees

Rodney D. Johnson, Chair of the Board and Trustee

David O. Beim, Trustee

Collette Chilton, Trustee

Frank J. Fabozzi, Trustee

Dr. Matina S. Horner, Trustee

Herbert I. London, Trustee

Cynthia A. Montgomery, Trustee

Barbara G. Novick, Trustee

Joseph P. Platt, Trustee

Robert C. Robb, Jr., Trustee

Toby Rosenblatt, Trustee

Mark Stalnecker, Trustee

Kenneth L. Urish, Trustee

Frederick W. Winter, Trustee

John M. Perlowski, President and Chief Executive Officer

Richard Hoerner, CFA, Vice President

Jennifer McGovern, Vice President

Neal Andrews, Chief Financial Officer

Jay Fife, Treasurer

Charles Park, Chief Compliance Officer

Fernanda Piedra, Anti-Money Laundering Compliance Officer

Benjamin Archibald, Secretary

Effective March 1, 2015, Charles Park resigned as Anti-Money Laundering Compliance Officer of MIP and Fernanda Piedra became Anti-Money Laundering Compliance Officer of the Trust/MIP.

Effective May 18, 2015, Ian MacKinnon resigned as a Trustee of the Trust/MIP.



52	BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015


Additional Information


General Information

Householding

The Fund will mail only one copy of shareholder documents, including prospectuses, annual and semi-annual reports 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/Master Portfolio file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s/Master Portfolio’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The Fund’s/ Master Portfolio’s Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762.

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the Fund/Master Portfolio use to determine how to vote proxies relating to portfolio securities is available upon request and without charge (1) by calling (800) 441-7762; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.

Availability of Proxy Voting Record

Information about how the Fund/Master Portfolio voted proxies relating to securities held in the Fund’s/Master Portfolio’s portfolio during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com; or by calling (800) 441-7762; and (2) on the SEC’s website at http://www.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 online at http://www.blackrock.com for more information.


Shareholder Privileges

Account Information

Call us at (800) 441-7762 from 8:00 AM to 6:00 PM EST on any business day to get information about your account balances, recent transactions and share prices. You can also reach us on the Web at http://www.blackrock.com/funds.

Automatic Investment Plans

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

Systematic Withdrawal Plans

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

Retirement Plans

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



BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015	53


Additional Information (concluded)

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.



54	BLACKROCK TOTAL INTERNATIONAL ex U.S. INDEX FUND	JUNE 30, 2015

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.

LOGO


ACWI-6/15-SAR

JUNE 30, 2015

SEMI-ANNUAL REPORT (UNAUDITED)

BlackRock U.S. Total Bond Index Fund | of BlackRock Funds III

Not FDIC Insured • May Lose Value • No Bank Guarantee


Table of Contents


	Page
The Markets in Review		3
Semi-Annual Report:
Fund Summary		4
About Fund Performance		6
Disclosure of Expenses		6
Fund Financial Statements:
Statement of Assets and Liabilities		7
Statement of Operations		8
Statements of Changes in Net Assets		9
Fund Financial Highlights		10
Fund Notes to Financial Statements		13
Master Portfolio Information		16
Master Portfolio Financial Statements:
Schedule of Investments		17
Statement of Assets and Liabilities		42
Statement of Operations		43
Statements of Changes in Net Assets		44
Master Portfolio Financial Highlights		45
Master Portfolio Notes to Financial Statements		46
Disclosure of Investment Advisory Agreement		52
Officers and Trustees		57
Additional Information		58

LOGO



2	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015

The Markets in Review

Dear Shareholder,

Sincerely,

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

LOGO

Rob Kapito

President, BlackRock Advisors, LLC


Total Returns as of June 30, 2015
	6-month			12-month
U.S. large cap equities (S&P 500^® Index)		1.23	%		7.42	%
U.S. small cap equities (Russell 2000^® Index)		4.75			6.49
International equities (MSCI Europe, Australasia, Far East Index)		5.52			(4.22	)
Emerging market equities (MSCI Emerging Markets Index)		2.95			(5.12	)
3-month Treasury bills (BofA Merrill Lynch 3-Month U.S. Treasury Bill Index)		0.01			0.02
U.S. Treasury securities (BofA Merrill Lynch 10-Year U.S. Treasury Index)		(0.51	)		3.79
U.S. investment-grade bonds (Barclays U.S. Aggregate Bond Index)		(0.10	)		1.86
Tax-exempt municipal bonds (S&P Municipal Bond Index)		0.01			3.00
U.S. high yield bonds (Barclays U.S. Corporate High Yield 2% Issuer Capped Index)		2.53			(0.39	)
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.



		THIS PAGE NOT PART OF YOUR FUND REPORT				3


Fund Summary as of June 30, 2015

Investment Objective

BlackRock U.S. Total Bond Index Fund’s (the “Fund”) (formerly known as BlackRock Bond Index Fund) investment objective is to seek to provide investment results that correspond to the total return performance of fixed-income securities in the aggregate, as represented by the Barclays U.S. Aggregate Bond Index (the “Index”).

Portfolio Management Commentary

How did the Fund perform?

•

For the six-month period ended June 30, 2015, the Fund’s Institutional Shares returned (0.18%), Investor A Shares returned (0.30%) and Class K Shares returned (0.16%). For the same period, the benchmark Barclays U.S. Aggregate Bond Index (the “Index”) returned (0.10%).

•

Returns for the Fund’s respective share classes differ from the Index based on individual share-class expenses. The Fund invests all of its assets in U.S. Total Bond Index Master Portfolio (the “Master Portfolio”) (formerly known as Bond Index Master Portfolio), a series of Master Investment Portfolio.

Describe the market environment.

•

During the first quarter of 2015, the much anticipated March 18th Federal Open Market Committee (“FOMC”) statement was interpreted as “dovish” by market participants. This was in light of the fact that the FOMC stated that the federal funds rate would be raised on condition of further improvement in the U.S. labor market and a reasonable expectation that inflation would approach its 2% target over the medium term. Longer-term interest rates retreated, and yields at the front end of the curve also fell as expectations of the coming Fed rate hikes were pushed further out in the year. In the first quarter, the highest returns came from spread sectors including commercial mortgage-backed securities, asset-backed securities and credit, while mortgages and agencies continued to underperform. Economic data in the United States was mixed early in the year, but U.S. labor markets continued to show strength. Elsewhere, the European Central Bank’s quantitative easing program (announced in January and commenced in early March) was one of the main themes in the global fixed-income markets earlier in 2015, pushing euro area debt yields to negative levels. This effectively anchored rates lower across the board in Europe, and central banks in emerging markets also announced rate cuts.

•

In the second quarter of 2015, negative headlines surrounding the debt/liquidity crisis in Greece, combined with weakness in some economic data, prompted pessimistic evaluations of the U.S. economy by analysts. Such pessimism appeared to be unwarranted, however, as a number of economic indicators showed improvement, including payroll growth, arguably stronger than at any time over the past 20 years. Labor market strength was seemingly confirmed by other indicators including falling unemployment and favorable manufacturing reports.

•

In June, defying the expectations of many at the beginning of the year, the Fed left short-term rates unchanged, while maintaining flexibility to hike rates later in 2015. Weaker-than-expected first quarter GDP and geopolitical uncertainty kept the Fed on hold. However, while the FOMC left its 2015 monthly interest rate forecast unchanged, it did lower its monthly interest rate forecasts for 2016 and 2017. Additionally, in her comments following the FOMC meeting, Fed Chair Janet Yellen struck a favorable tone regarding the U.S. economy, but stated that she is looking for additional labor market strength prior to a rate hike. Yellen also emphasized that the timing of the rate “lift-off” was less important than the trajectory of rates. She has repeatedly stated that the pace of interest rate increases will be very slow.

Describe recent portfolio activity.

•

During the period, the Master Portfolio maintained its objective of seeking to provide investment results that correspond to the total return performance of fixed-income securities in the aggregate, as represented by the Index, by selecting securities in accordance with their relative proportion within the Index. Other factors considered in security selection included credit quality, industry, maturity structure, coupon rates and call features.

•

The Master Portfolio held cash committed for pending transactions. The cash balance did not have a material impact on performance.

Describe portfolio positioning at period end.

•

The Master Portfolio remains positioned to attempt to match the risk characteristics of the Index, irrespective of the market’s future direction.



4	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015

Total Return Based on a $10,000 Investment

LOGO

Assuming transaction costs and other operating expenses, including administration fees, if any.

The Fund invests all of its assets in the Master Portfolio. The Master Portfolio invests primarily in investment-grade U.S. Government securities and corporate bonds, as well as investment-grade mortgage-backed, asset-backed and commercial mortgage-backed securities.

A widely recognized unmanaged market-capitalization weighted index, comprised of investment-grade corporate bonds rated BBB or better, mortgages and U.S. Treasury and U.S. Government agency issues with at least one year to maturity.

Performance Summary for the Period Ended June 30, 2015


	Standardized 30-Day Yields			Unsubsidized 30-Day Yields			6-Month Total Returns			Average Annual Total Returns
	Standardized 30-Day Yields			Unsubsidized 30-Day Yields			6-Month Total Returns			1 Year			5 Years			10 Years
Institutional		1.80	%		1.77	%		(0.18	)%		1.78	%		3.12	%		4.37	%
Investor A		1.55			1.52			(0.30	)		1.54			2.87			4.15
Class K		1.85			1.82			(0.16	)		1.74			3.17			4.40
Barclays U.S. Aggregate Bond Index		—			—			(0.10	)		1.86			3.35			4.44

See “About Fund Performance” on page 6 for further information on how performance was calculated.

Past performance is not indicative of future results.

Expense Example


	Actual						Hypothetical⁵
	Beginning Account Value January 1, 2015		Ending Account Value June 30, 2015		Expenses Paid During the Period⁴		Beginning Account Value January 1, 2015		Ending Account Value June 30, 2015		Expenses Paid During the Period⁴		Annualized Expense Ratio
Institutional	$	1,000.00	$	998.20	$	0.59	$	1,000.00	$	1,024.20	$	0.60		0.12	%
Investor A	$	1,000.00	$	997.00	$	1.83	$	1,000.00	$	1,022.96	$	1.86		0.37	%
Class K	$	1,000.00	$	998.40	$	0.35	$	1,000.00	$	1,024.45	$	0.35		0.07	%

⁴

⁵

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

See “Disclosure of Expenses” on page 6 for further information on how expenses were calculated.



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	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. Prior to March 31, 2011, Institutional Shares’ performance results are those of Class K Shares restated to reflect Institutional Shares’ fees.

•

Investor A Shares are not subject to any sales charge and bear no ongoing distribution fee. These shares are subject to an ongoing service fee of 0.25% per year. These shares are generally available through financial intermediaries. Prior to March 31, 2011, Investor A Shares’ performance results are those of Class K Shares restated to reflect Investor A Shares’ fees.

The Fund’s administrator waived a portion of the Fund’s expenses. Without such waiver, the Fund’s performance would have been lower. The standardized 30-day yield includes the effects of any waivers and/or reimbursements. The unsubsidized 30-day yield excludes the effects of any waivers and/or reimbursements. See Note 3 of 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 administration fees, service and/or distribution fees, including 12b-1 fees, and other Fund expenses. The expense example shown on the previous page (which is based on a hypothetical investment of $1,000 invested on January 1, 2015 and held through June 30, 2015) 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.



6	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015


Statement of Assets and Liabilities		BlackRock U.S. Total Bond Index Fund


June 30, 2015 (Unaudited)

Assets
Investments at value — Master Portfolio (cost $204,551,860)	$	209,004,412
Receivables:
Contributions from investors		8,326,774
Capital shares sold		665,214

Total assets		217,996,400


Liabilities
Payables:
Capital shares redeemed		8,991,988
Income dividends		83,960
Administration fees		4,300
Service fees		2,662
Other accrued expenses		8,319

Total liabilities		9,091,229

Net Assets	$	208,905,171


Net Assets Consist of
Paid-in capital	$	205,578,290
Distributions in excess of net investment income		(668,173	)
Accumulated net realized loss		(457,498	)
Net unrealized appreciation (depreciation)		4,452,552

Net Assets	$	208,905,171


Net Asset Value
Institutional — Based on net assets of $42,670,758 and 4,240,027 shares outstanding, unlimited shares authorized, no par value	$	10.06

Investor A — Based on net assets of $14,365,733 and 1,427,883 shares outstanding, unlimited shares authorized, no par value	$	10.06

Class K — Based on net assets of $151,868,680 and 15,090,213 shares outstanding, unlimited shares authorized, no par value	$	10.06


Statement of Operations		BlackRock U.S. Total Bond Index Fund


Six Months Ended June 30, 2015 (Unaudited)

Investment Income
Net investment income allocated from the Master Portfolio:
Interest	$	1,959,439
Interest — affiliated		39,227
Securities lending — affiliated — net		206
Foreign taxes withheld		(28	)
Expenses		(76,017	)
Fees waived		20,592

Total income		1,943,419


Fund Expenses
Administration — Institutional		13,623
Administration — Investor A		4,413
Administration — Class K		16,016
Service — Investor A		15,794
Professional		9,231
Miscellaneous		326

Total expenses		59,403
Less administration fees waived		(9,231	)

Total expenses after fees waived		50,172

Net investment income		1,893,247


Realized and Unrealized Gain (Loss) Allocated from the Master Portfolio
Net realized gain from investments		284,881
Net change in unrealized appreciation (depreciation) on investments		(2,552,498	)

Total realized and unrealized loss		(2,267,617	)

Net Decrease in Net Assets Resulting from Operations	$	(374,370	)


Statements of Changes in Net Assets		BlackRock U.S. Total Bond Index Fund


	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	1,893,247		$	2,565,695
Net realized gain		284,881			2,209,105
Net change in unrealized appreciation (depreciation)		(2,552,498	)		3,399,354

Net increase (decrease) in net assets resulting from operations		(374,370	)		8,174,154


Distributions to Shareholders From¹
Net investment income:
Institutional		(362,781	)		(404,342	)
Investor A		(103,399	)		(100,112	)
Class K		(1,510,199	)		(2,143,878	)
Net realized gain:
Institutional		—			(203,671	)
Investor A		—			(85,653	)
Class K		—			(1,462,982	)

Decrease in net assets resulting from distributions to shareholders		(1,976,379	)		(4,400,638	)


Capital Share Transactions
Net increase in net assets derived from capital share transactions		6,536,968			78,078,795


Net Assets
Total increase in net assets		4,186,219			81,852,311
Beginning of period		204,718,952			122,866,641

End of period	$	208,905,171		$	204,718,952

Distributions in excess on net investment income, end of period	$	(668,173	)	$	(585,041	)

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


Financial Highlights		BlackRock U.S. Total Bond Index Fund


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period March 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period March 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	10.17		$	9.85		$	10.65		$	10.57		$	10.11

Net investment income²		0.09			0.17			0.15			0.19			0.25
Net realized and unrealized gain (loss)		(0.11	)		0.41			(0.40	)		0.22			0.46

Net increase (decrease) from investment operations		(0.02	)		0.58			(0.25	)		0.41			0.71

Distributions from:³
Net investment income		(0.09	)		(0.17	)		(0.18	)		(0.22	)		(0.25	)
Net realized gain		—			(0.09	)		(0.37	)		(0.11	)		(0.00	)⁴

Total distributions		(0.09	)		(0.26	)		(0.55	)		(0.33	)		(0.25	)

Net asset value, end of period	$	10.06		$	10.17		$	9.85		$	10.65		$	10.57


Total Return⁵
Based on net asset value		(0.18)%	⁶		5.88%			(2.39)%			3.91%			7.18%	⁶


Ratios to Average Net Assets⁷
Total expenses		0.13%	^8,9,10		0.17%	^9,10		0.26%	¹¹		0.26%	¹¹		0.27%	^8,12

Total expenses after fees waived		0.12%	^8,9,10		0.16%	^9,10		0.25%	¹¹		0.25%	¹¹		0.25%	^8,12

Net investment income		1.77%	^8,9,10		1.67%	⁹^,10		1.48%	¹¹		1.71%	¹¹		2.98%	^8,12


Supplemental Data
Net assets, end of period (000)	$	42,671		$	34,538		$	22,939		$	11,534		$	53

Portfolio turnover rate of the Master Portfolio¹³		191%			476%			417%			436%			122%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the Fund’s share of the Master Portfolio’s allocated expenses and/or net investment income.

⁸

Annualized.

⁹

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.02%

¹⁰

Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.02%.

¹¹

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.01%

¹²

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.05%

¹³

Includes mortgage dollar roll transactions (“MDRs”). Additional information regarding portfolio turnover rate is as follows:

Six Months Ended

June 30, 2015

(Unaudited)

Year Ended December 31,

Period

March 31, 2011¹

to December 31,
2011

2014

2013

2012

Portfolio turnover rate (excluding MDRs)

131%

244%

214%

231%

121%


Financial Highlights (continued)		BlackRock U.S. Total Bond Index Fund


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period March 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period March 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	10.17		$	9.85		$	10.65		$	10.57		$	10.11

Net investment income²		0.08			0.15			0.11			0.16			0.22
Net realized and unrealized gain (loss)		(0.11	)		0.41			(0.39	)		0.22			0.48

Net increase (decrease) from investment operations		(0.03	)		0.56			(0.28	)		0.38			0.70

Distributions from:³
Net investment income		(0.08	)		(0.15	)		(0.15	)		(0.19	)		(0.24	)
Net realized gain		—			(0.09	)		(0.37	)		(0.11	)		(0.00	)⁴

Total distributions		(0.08	)		(0.24	)		(0.52	)		(0.30	)		(0.24	)

Net asset value, end of period	$	10.06		$	10.17		$	9.85		$	10.65		$	10.57


Total Return⁵
Based on net asset value		(0.30)%	⁶		5.63%			(2.63)%			3.66%			7.01%	⁶


Ratios to Average Net Assets⁷
Total expenses		0.38%	^8,9,10		0.41%	^9,10		0.51%	¹¹		0.51%	¹¹		0.53%	^8,12

Total expenses after fees waived		0.37%	^8,9,10		0.40%	^9,10		0.50%	¹¹		0.50%	¹¹		0.50%	^8,12

Net investment income		1.52%	^8,9,10		1.44%	^9,10		1.10%	¹¹		1.45%	¹¹		2.65%	^8,12


Supplemental Data
Net assets, end of period (000)	$	14,366		$	10,732		$	3,735		$	1,805		$	202

Portfolio turnover rate of the Master Portfolio¹³		191%			476%			417%			436%			122%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than (0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the Fund’s share of the Master Portfolio’s allocated expenses and/or net investment income.

⁸

Annualized.

⁹

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.02%

¹⁰

Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.02%.

¹¹

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.01%

¹²

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.05%

¹³

Includes MDRs. Additional information regarding portfolio tunrover rate is as follows:

Six Months Ended

June 30, 2015

(Unaudited)

Year Ended December 31,

Period

March 31, 2011¹

to December 31,
2011

2014

2013

2012

Portfolio turnover rate (excluding MDRs)

133%

244%

214%

231%

121%


Financial Highlights (concluded)		BlackRock U.S. Total Bond Index Fund


	Class K
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	10.17		$	9.85		$	10.65		$	10.57		$	10.17		$	9.90

Net investment income¹		0.10			0.17			0.16			0.22			0.35			0.37
Net realized and unrealized gain (loss)		(0.11	)		0.41			(0.41	)		0.19			0.40			0.30

Net increase (decrease) from investment operations		(0.01	)		0.58			(0.25	)		0.41			0.75			0.67

Distributions from:²
Net investment income		(0.10	)		(0.17	)		(0.18	)		(0.22	)		(0.35	)		(0.40	)
Net realized gain		—			(0.09	)		(0.37	)		(0.11	)		(0.00	)³		—

Total distributions		(0.10	)		(0.26	)		(0.55	)		(0.33	)		(0.35	)		(0.40	)

Net asset value, end of period	$	10.06		$	10.17		$	9.85		$	10.65		$	10.57		$	10.17


Total Return⁴
Based on net asset value		(0.16)%	⁵		5.94%			(2.35)%			3.94%			7.55%			6.79%


Ratios to Average Net Assets⁶
Total expenses		0.08%	^7,8,9		0.12%	^8,9		0.21%	¹⁰		0.21%	¹⁰		0.23%	¹¹		0.26%

Total expenses after fees waived		0.07%	^7,8,9		0.10%	^8,9		0.20%	¹⁰		0.20%	¹⁰		0.20%	¹¹		0.23%

Net investment income		1.81%	^7,8,9		1.72%	⁸^,9		1.52%	¹⁰		1.96%	¹⁰		3.19%	¹¹		3.65%


Supplemental Data
Net assets, end of period (000)	$	151,869		$	159,449		$	96,193		$	115,516		$	122,015		$	98,559

Portfolio turnover rate of the Master Portfolio¹²		191%			476%			417%			436%			122%			59%

Based on average shares outstanding.

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

Amount is greater than $(0.005) per share.

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

Includes the Fund’s share of the Master Portfolio’s allocated expenses and/or net investment income.

⁷

Annualized.

⁸

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.02%

⁹

Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.02%.

¹⁰

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.01%

¹¹

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.05%

¹²

Includes MDRs. Additional information regarding portfolio turnover rate is as follows:

Six Months Ended
June 30, 2015

(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Portfolio turnover rate (excluding MDRs)

133%

244%

214%

231%

121%


Notes to Financial Statements				BlackRock U.S. Total Bond Index Fund

1. Organization:

BlackRock U.S. Total Bond Index Fund (the “Fund”) (formerly known as BlackRock Bond Index Fund), a series of BlackRock Funds III (the “Trust”), is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a diversified, open-end management investment company. The Trust is organized as a Delaware statutory trust. The Fund seeks to achieve its investment objective by investing substantially all of its assets in U.S. Total Bond Index Master Portfolio (the “Master Portfolio”) (formerly known as Bond Index Master Portfolio), a series of Master Investment Portfolio (“MIP”), an affiliate of the Fund, which has the same investment objective and strategies as the Fund. The value of the Fund’s investment in the Master Portfolio reflects the Fund’s proportionate interest in the net assets of the Master Portfolio. The performance of the Fund is directly affected by the performance of the Master Portfolio. At June 30, 2015, the percentage of the Master Portfolio owned by the Fund was 15.0%. As such, the financial statements of the Master Portfolio, including the Schedule of Investments, are included elsewhere in this report and should be read in conjunction with the Fund’s financial statements.

The Fund offers multiple classes of shares. Institutional and Class K Shares are sold without a sales charge and only to certain eligible investors. Investor A Shares are sold without an initial sales charge. All classes of shares have identical voting, dividend, liquidation and other rights and are subject to the same terms and conditions, except that Investor A Shares bear certain expenses related to the shareholder servicing of such shares. Each class has exclusive voting rights with respect to matters relating to its shareholder servicing and distribution expenditures.

2. Significant Accounting Policies:

Valuation: The Fund’s investments are valued at fair value as of the close of trading on the New York Stock Exchange (“NYSE”) (generally 4:00 p.m., Eastern time). U.S. GAAP defines fair value as the price the 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 BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to provide oversight of the pricing function for the Fund for all financial instruments. The Fund’s policy is to fair value its financial instruments at market value. The Fund records its investment in the Master Portfolio at fair value based on the Fund’s proportionate interest in the net assets of the Master Portfolio. Valuation of securities held by the Master Portfolio is discussed in Note 2 of the Master Portfolio’s Notes to Financial Statements, which are included elsewhere in this report.

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

Other: Expenses directly related to the Fund or its classes are charged to the Fund or the applicable class. Other operating expenses shared by several funds are prorated among those funds on the basis of relative net assets or other appropriate methods. 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.

3. Administration Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock, Inc. (“BlackRock”) for 1940 Act purposes.

The Trust, on behalf of the Fund, entered into an Administration Agreement with BlackRock Advisors, LLC (“BAL”), an indirect, wholly owned subsidiary of BlackRock to provide administration services (other than investment advice and related portfolio activities). BAL, in consideration thereof, has agreed to bear all of the Fund’s ordinary operating expenses, excluding, generally, investment advisory fees, distribution fees, brokerage and other expenses related to the execution of portfolio transactions, extraordinary expenses and certain other expenses which are borne by the Fund. BAL is



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	13


Notes to Financial Statements (continued)				BlackRock U.S. Total Bond Index Fund

entitled to receive for these administration services an annual fee of 0.02% of the average daily net assets of Class K Shares and 0.07% of the average daily net assets of Institutional and Investor A Shares.

From time to time, BAL may waive such fees in whole or in part. Any such waiver will reduce the expenses of the Fund and, accordingly, have a favorable impact on its performance. BAL may delegate certain of its administration duties to sub-administrators.

The fees and expenses of the Trust’s trustees who are not “interested persons” of the Trust, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and the Trust’s independent registered public accounting firm (together, the “independent expenses”) are paid directly by the Fund. BAL has contractually agreed to provide an offsetting credit against the administration fees paid by the Fund in an amount equal to the independent expenses through April 30, 2016.

The Trust, on behalf of the Fund, entered into a Distribution Agreement and a Distribution and Service Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of BlackRock. 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 of 0.25% based upon the average daily net assets of Investor A Shares.

Certain officers and/or trustees of the Trust are officers and/or directors of BlackRock or its affiliates.

4. 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 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 remains open for each of the four years ended December 31, 2014. The statutes of limitations on the Fund’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.

5. Capital Share Transactions:

Transactions in capital shares for each class were as follows:


	Six Months Ended June 30, 2015						Year Ended December 31, 2014
	Shares			Amount			Shares			Amount
Institutional
Shares sold		1,211,837		$	12,415,589			1,738,605		$	17,601,977
Shares issued to shareholders in reinvestment of distributions		35,495			362,781			60,060			608,013
Shares redeemed		(403,857	)		(4,131,840	)		(731,418	)		(7,404,180	)

Net increase		843,475		$	8,646,530			1,067,247		$	10,805,810


Investor A
Shares sold		880,547		$	8,979,402			953,418		$	9,634,368
Shares issued to shareholders in reinvestment of distributions		10,117			103,399			18,313			185,765
Shares redeemed		(518,320	)		(5,294,862	)		(295,415	)		(2,963,720	)

Net increase		372,344		$	3,787,939			676,316		$	6,856,413



14	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015


Notes to Financial Statements (concluded)				BlackRock U.S. Total Bond Index Fund


	Six Months Ended June 30, 2015						Year Ended December 31, 2014
	Shares			Amount			Shares			Amount
Class K
Shares sold		2,864,973		$	29,321,278			10,203,581		$	103,895,691
Shares issued to shareholders in reinvestment of distributions		145,803			1,488,306			354,853			3,596,678
Shares redeemed		(3,600,139	)		(36,707,085	)		(4,643,962	)		(47,075,797	)

Net increase (decrease)		(589,363	)	$	(5,897,501	)		5,914,472		$	60,416,572

Total Net Increase		626,456		$	6,536,968			7,658,035		$	78,078,795

6. Subsequent Events:



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	15


Master Portfolio Information		U.S. Total Bond Index Master Portfolio


As of June 30, 2015


Portfolio Composition		Percent of Long-Term Investments


U.S. Treasury Obligations	37	%
U.S. Government Sponsored Agency Securities	32
Corporate Bonds	26
Foreign Agency Obligations	3
Non-Agency Mortgage-Backed Securities	1
Municipal Bonds	1

Credit Quality Allocation¹

Percent of

Long-Term Investments


AAA/Aaa²	73	%
AA/Aa	5
A	11
BBB/Baa	11

For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either Standard & Poor’s or Moody’s Investors Service. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

The investment advisor evaluates the credit quality of not-rated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors, individual investments and/or issuer. Using this approach, the investment advisor has deemed U.S. Government Sponsored Agency Securities and U.S. Treasury Obligations as AAA/Aaa.



16	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015

Schedule of Investments June 30, 2015 (Unaudited)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


Asset-Backed Securities	Par (000)		Value
BMW Vehicle Owner Trust, Series 2014-A, Class A4, 1.50%, 2/25/21	$	200	$	200,756
Capital One Multi-Asset Execution Trust:
Series 2007-A7, Class A7, 5.75%, 7/15/20		1,500		1,644,096
Series 2014-A5, Class A, 1.48%, 7/15/20		400		402,058
Chase Issuance Trust, Series 2014-A1, Class A, 1.15%, 1/15/19		1,000		1,002,072
Citibank Credit Card Issuance Trust, Series 2008-A1, Class A1, 5.35%, 2/07/20		170		187,059
Discover Card Execution Note Trust, Series 2014-A3, Class A3, 1.22%, 10/15/19		1,000		1,001,629
GE Capital Credit Card Master Note Trust, Series 2013-1, Class A, 1.35%, 3/15/21		750		745,583
Hyundai Auto Receivables Trust, Series 2015-B, Class A3, 1.12%, 11/15/19		1,000		998,047
Nissan Auto Lease Trust, Series 2014-B, Class A4, 1.29%, 3/16/20		200		199,997
Toyota Auto Receivables Owner Trust, Series 2014-C, Class A4, 1.44%, 4/15/20		200		200,518
Total Asset-Backed Securities — 0.5%				6,581,815



Corporate Bonds
Aerospace & Defense — 0.4%
The Boeing Co.:
2.35%, 10/30/21		75		75,035
6.13%, 2/15/33		100		125,022
3.30%, 3/01/35		65		59,024
Crane Co., 4.45%, 12/15/23		125		130,216
Eaton Corp.:
2.75%, 11/02/22		250		243,157
4.00%, 11/02/32		200		193,584
General Dynamics Corp., 3.88%, 7/15/21		50		53,408
Harris Corp., 4.85%, 4/27/35		65		62,286
Honeywell International, Inc., 5.30%, 3/01/18		100		110,407
Ingersoll-Rand Luxembourg Finance SA, 4.65%, 11/01/44		30		28,958
L-3 Communications Corp.:
3.95%, 11/15/16		250		258,133
1.50%, 5/28/17		250		248,283
4.95%, 2/15/21		250		266,805
Lockheed Martin Corp.:
3.35%, 9/15/21		250		257,308
3.60%, 3/01/35		65		60,115
Corporate Bonds	Par (000)		Value
Aerospace & Defense (concluded)
Lockheed Martin Corp. (concluded):
4.07%, 12/15/42	$	100	$	94,489
3.80%, 3/01/45		500		445,730
Northrop Grumman Corp.:
1.75%, 6/01/18		250		249,394
4.75%, 6/01/43		125		126,284
Parker-Hannifin Corp., 4.20%, 11/21/34		250		249,221
Precision Castparts Corp.:
1.25%, 1/15/18		75		74,563
2.50%, 1/15/23		150		143,790
4.20%, 6/15/35		250		249,208
Raytheon Co.:
4.88%, 10/15/40		250		266,270
4.70%, 12/15/41		100		104,284
Textron, Inc., 3.65%, 3/01/21		350		357,138
Tyco Electronics Group SA, 3.45%, 8/01/24		75		75,019
United Technologies Corp.:
1.80%, 6/01/17		250		253,642
3.10%, 6/01/22		100		100,795
5.70%, 4/15/40		50		58,419
4.50%, 6/01/42		450		457,153
4.15%, 5/15/45		250		238,716

				5,715,856
Agriculture, Fishing & Ranching — 0.0%
Bunge Ltd. Finance Corp., 3.20%, 6/15/17		150		154,445
Air Freight & Logistics — 0.0%
FedEx Corp.:
4.00%, 1/15/24		250		259,302
3.90%, 2/01/35		190		175,652
3.88%, 8/01/42		50		43,281
United Parcel Service, Inc.:
5.13%, 4/01/19		50		55,741
6.20%, 1/15/38		100		125,006

				658,982
Airlines — 0.0%
American Airlines Pass-Through Trust, Series 2013-2, Class A, 4.95%, 7/15/24		183		194,616
Continental Airlines Pass Through Trust, Series 2012-1, Class A, 4.15%, 10/11/25		45		46,543
Delta Air Lines Pass Through Trust, Series 2012-1, Class A, 4.75%, 11/07/21		83		88,993
Southwest Airlines Co., 2.75%, 11/06/19		75		76,095
United Airlines Pass-Through Trust, Series 2013-1, Class A, 4.30%, 2/15/27		195		201,242

				607,489
Auto Components — 0.1%
BorgWarner, Inc., 3.38%, 3/15/25		70		68,879
Delphi Corp., 5.00%, 2/15/23		250		266,250


Portfolio Abbreviations


COP	Certificates of Participation	NPFGC	National Public Finance Guarantee Corp.
EDA	Economic Development Authority	RB	Revenue Bonds
GO	General Obligation Bonds

See Notes to Financial Statements.



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	17

Schedule of Investments (continued)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value
Auto Components (concluded)
Johnson Controls, Inc.:
1.40%, 11/02/17	$	500	$	498,066
3.63%, 7/02/24		80		80,142
4.95%, 7/02/64		250		237,538

				1,150,875
Automobiles — 0.2%
Daimler Finance North America LLC, 8.50%, 1/18/31		100		146,964
Ford Motor Co.:
7.45%, 7/16/31		150		191,671
4.75%, 1/15/43		350		339,361
General Motors Co.:
5.00%, 4/01/35		250		245,417
5.20%, 4/01/45		125		123,805
Toyota Motor Credit Corp.:
2.10%, 1/17/19		250		251,046
2.13%, 7/18/19		350		351,123
2.15%, 3/12/20		500		499,846

				2,149,233
Banks — 3.2%
Abbey National Treasury Services PLC:
1.38%, 3/13/17		250		250,520
1.65%, 9/29/17		250		250,683
2.38%, 3/16/20		250		249,151
Asian Development Bank:
1.75%, 9/11/18		500		508,226
1.88%, 4/12/19		500		508,077
Australia & New Zealand Banking Group Ltd.:
1.25%, 6/13/17		250		250,383
1.50%, 1/16/18		250		249,840
2.25%, 6/13/19		250		251,071
Bancolombia SA, 5.95%, 6/03/21		100		109,650
Bank of Montreal:
2.50%, 1/11/17		150		153,356
1.40%, 4/10/18		230		228,601
The Bank of New York Mellon Corp.:
2.30%, 7/28/16		50		50,891
1.35%, 3/06/18		250		248,529
2.20%, 5/15/19		250		251,113
2.30%, 9/11/19		500		499,663
3.55%, 9/23/21		50		52,238
3.00%, 2/24/25		105		101,728
Bank of Nova Scotia:
1.38%, 7/15/16		250		251,585
1.10%, 12/13/16		500		500,819
1.30%, 7/21/17		250		250,051
1.38%, 12/18/17		100		99,617
2.05%, 10/30/18		250		251,230
Barclays Bank PLC:
5.00%, 9/22/16		175		183,154
2.00%, 3/16/18		500		498,903
5.13%, 1/08/20		200		222,462
3.75%, 5/15/24		250		251,089
3.65%, 3/16/25		450		425,609
BB&T Corp.:
5.25%, 11/01/19		100		110,154
2.45%, 1/15/20		250		250,560
2.63%, 6/29/20		250		250,555
Corporate Bonds	Par (000)		Value
Banks (continued)
BNP Paribas SA:
2.38%, 9/14/17		250		253,745
5.00%, 1/15/21		100		110,479
3.25%, 3/03/23		250		248,125
4.25%, 10/15/24		250		246,566
BPCE SA:
2.50%, 12/10/18		250		253,655
4.00%, 4/15/24		250		252,385
Branch Banking & Trust Co.:
2.30%, 10/15/18		250		253,813
3.80%, 10/30/26		250		252,471
Citizens Bank NA/Providence, 1.60%, 12/04/17		250		249,589
Commonwealth Bank of Australia:
1.63%, 3/12/18		500		501,425
2.30%, 3/12/20		250		249,759
Commonwealth Bank of Australia, New York, 2.25%, 3/13/19		250		251,217
Compass Bank:
2.75%, 9/29/19		250		249,382
3.88%, 4/10/25		250		235,364
Cooperatieve Centrale Raiffeisen-Boerenleenbank BA:
1.70%, 3/19/18		250		250,618
2.25%, 1/14/19		250		251,634
4.63%, 12/01/23		500		515,854
3.38%, 5/21/25		250		243,698
5.25%, 5/24/41		25		27,389
Credit Suisse Group Funding Guernsey, Ltd. (a):
3.75%, 3/26/25		500		481,336
4.88%, 5/15/45		250		240,543
Credit Suisse, New York:
1.75%, 1/29/18		500		498,056
2.30%, 5/28/19		600		598,958
5.40%, 1/14/20		150		165,850
3.00%, 10/29/21		250		248,051
Discover Bank/Greenwood Delaware, 7.00%, 4/15/20		500		581,920
Export-Import Bank of Korea:
4.00%, 1/11/17		400		415,679
1.75%, 2/27/18		500		499,392
Fifth Third Bancorp:
1.45%, 2/28/18		200		198,527
2.88%, 10/01/21		200		198,034
3.50%, 3/15/22		100		101,709
4.30%, 1/16/24		250		256,569
HSBC Bank USA NA, 4.88%, 8/24/20		500		553,389
HSBC Holdings PLC:
4.88%, 1/14/22		150		165,411
4.25%, 3/14/24		500		504,992
6.50%, 5/02/36		200		237,846
6.80%, 6/01/38		250		310,411
5.25%, 3/14/44		250		259,317
HSBC USA, Inc.:
2.25%, 6/23/19		250		248,059
2.35%, 3/05/20		250		247,956
The Huntington National Bank, 1.38%, 4/24/17		250		249,072

See Notes to Financial Statements.



18	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value
Banks (continued)
Intesa Sanpaolo SpA:
3.88%, 1/16/18	$	200	$	206,467
5.25%, 1/12/24		250		265,659
KeyCorp:
2.30%, 12/13/18		340		343,006
5.10%, 3/24/21		100		110,948
KFW:
0.50%, 7/15/16		1,500		1,500,433
0.50%, 9/15/16		1,000		999,926
0.88%, 12/15/17		1,000		997,320
1.00%, 1/26/18		500		499,522
1.88%, 6/30/20		750		751,833
2.13%, 1/17/23		200		197,580
The Korea Development Bank:
1.50%, 1/22/18		200		198,624
3.00%, 3/17/19		350		359,996
Landwirtschaftliche Rentenbank:
2.13%, 7/15/16		1,000		1,017,241
0.88%, 9/12/17		750		749,675
Lloyds Bank PLC:
2.35%, 9/05/19		350		350,109
2.40%, 3/17/20		750		747,944
Lloyds TSB Bank PLC, 4.20%, 3/28/17		50		52,473
Manufacturers & Traders Trust Co.:
1.40%, 7/25/17		250		249,648
1.45%, 3/07/18		250		248,206
MUFG Union Bank NA, 2.63%, 9/26/18		250		254,034
Oesterreichische Kontrollbank AG, 1.63%, 3/12/19		500		504,019
PNC Bank NA (b):
2.20%, 1/28/19		500		502,394
2.25%, 7/02/19		350		348,851
2.30%, 6/01/20		500		496,852
2.95%, 1/30/23		250		241,873
PNC Funding Corp. (b):
5.63%, 2/01/17		150		159,408
3.30%, 3/08/22		150		152,556
Rabobank Nederland:
3.38%, 1/19/17		300		309,879
3.88%, 2/08/22		150		156,046
Regions Financial Corp., 2.00%, 5/15/18		250		249,832
Royal Bank of Canada:
1.45%, 9/09/16		250		251,916
1.25%, 6/16/17		250		250,480
1.40%, 10/13/17		225		225,602
2.20%, 7/27/18		250		254,264
2.15%, 3/06/20		250		249,594
Santander Holdings USA, Inc.:
3.45%, 8/27/18		250		257,970
2.65%, 4/17/20		150		147,467
Sumitomo Mitsui Banking Corp.:
1.35%, 7/11/17		250		249,927
1.80%, 7/18/17		250		251,773
2.45%, 1/10/19		250		252,721
2.45%, 1/16/20		250		250,568
SunTrust Banks, Inc.:
3.50%, 1/20/17		50		51,490
2.35%, 11/01/18		250		251,585
Svenska Handelsbanken AB, 1.63%, 3/21/18		250		250,454
Corporate Bonds	Par (000)		Value
Banks (concluded)
The Toronto-Dominion Bank:
2.38%, 10/19/16	$	50	$	50,944
1.63%, 3/13/18		500		502,676
1.40%, 4/30/18		250		249,477
2.25%, 11/05/19		300		301,210
US Bancorp:
1.65%, 5/15/17		250		253,012
1.95%, 11/15/18		225		227,028
4.13%, 5/24/21		50		54,159
US Bank NA:
1.35%, 1/26/18		500		499,674
2.13%, 10/28/19		250		250,284
Wachovia Corp., 5.63%, 10/15/16		250		264,329
Wells Fargo & Co.:
1.25%, 7/20/16		250		251,060
2.63%, 12/15/16		100		102,284
2.10%, 5/08/17		150		152,544
5.63%, 12/11/17		250		274,680
1.50%, 1/16/18		250		249,531
2.15%, 1/15/19		250		251,553
2.13%, 4/22/19		350		351,374
2.15%, 1/30/20		460		455,609
3.00%, 1/22/21		250		254,074
3.45%, 2/13/23		450		447,563
4.48%, 1/16/24		250		263,185
4.10%, 6/03/26		520		522,192
5.38%, 11/02/43		150		160,158
5.61%, 1/15/44		306		336,077
4.65%, 11/04/44		345		330,679
3.90%, 5/01/45		150		134,993
Westpac Banking Corp.:
1.50%, 12/01/17		250		250,353
1.60%, 1/12/18		250		250,763
2.25%, 1/17/19		350		354,385
4.88%, 11/19/19		50		55,431

				44,437,199
Beverages — 0.5%
Anheuser-Busch Cos. LLC, 6.45%, 9/01/37		100		123,472
Anheuser-Busch InBev Finance, Inc.:
2.15%, 2/01/19		500		501,424
4.63%, 2/01/44		400		402,623
Anheuser-Busch InBev Worldwide, Inc.:
1.38%, 7/15/17		500		502,350
7.75%, 1/15/19		250		296,737
2.50%, 7/15/22		200		192,335
8.20%, 1/15/39		150		223,305
3.75%, 7/15/42		50		44,145
Beam, Inc., 1.88%, 5/15/17		100		100,887
The Coca-Cola Co.:
1.80%, 9/01/16		50		50,604
1.15%, 4/01/18		250		248,687
1.65%, 11/01/18		500		502,644
2.45%, 11/01/20		350		355,218
Coca-Cola Femsa SAB de CV, 2.38%, 11/26/18		250		253,525
Diageo Capital PLC:
1.50%, 5/11/17		200		200,018
5.75%, 10/23/17		100		109,120
3.88%, 4/29/43		125		110,972

See Notes to Financial Statements.



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	19

Schedule of Investments (continued)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value
Beverages (concluded)
Diageo Investment Corp.:
2.88%, 5/11/22	$	100	$	97,763
4.25%, 5/11/42		250		233,528
Dr Pepper Snapple Group, Inc.:
3.20%, 11/15/21		25		25,598
2.70%, 11/15/22		100		95,465
Molson Coors Brewing Co., 3.50%, 5/01/22 (c)		75		75,672
PepsiCo, Inc.:
1.25%, 8/13/17		500		500,830
2.25%, 1/07/19		250		253,412
2.75%, 3/05/22		250		249,369
2.75%, 3/01/23		300		295,273
3.60%, 3/01/24		250		257,196
4.88%, 11/01/40		100		106,043
3.60%, 8/13/42		100		87,787

				6,496,002
Biotechnology — 0.3%
Amgen, Inc.:
2.13%, 5/15/17		300		304,730
1.25%, 5/22/17		750		749,445
2.20%, 5/22/19		250		249,289
3.45%, 10/01/20		100		103,455
5.15%, 11/15/41		550		564,822
5.38%, 5/15/43		250		265,293
4.40%, 5/01/45		175		161,260
Celgene Corp.:
3.25%, 8/15/22		150		148,339
5.25%, 8/15/43		145		150,973
Gilead Sciences, Inc.:
3.05%, 12/01/16		150		154,313
3.70%, 4/01/24		500		510,918
3.50%, 2/01/25		170		170,248
5.65%, 12/01/41		50		57,288
4.50%, 2/01/45		150		149,422

				3,739,795
Building Products — 0.0%
Owens Corning, 4.20%, 12/15/22		150		152,035
Capital Markets — 1.2%
Ameriprise Financial, Inc., 4.00%, 10/15/23		150		156,642
Ares Capital Corp., 3.88%, 1/15/20		300		304,945
Brookfield Asset Management, Inc., 4.00%, 1/15/25		250		247,431
The Charles Schwab Corp.:
2.20%, 7/25/18		75		76,090
4.45%, 7/22/20		100		110,532
3.00%, 3/10/25		80		78,469
CME Group, Inc.:
3.00%, 3/15/25		250		242,772
5.30%, 9/15/43		100		110,333
FMS Wertmanagement AoeR:
1.13%, 10/14/16		250		251,757
0.63%, 1/30/17		500		499,600
Franklin Resources, Inc., 2.80%, 9/15/22		150		148,726
Goldman Sachs Capital I, 6.35%, 2/15/34		250		289,960
The Goldman Sachs Group, Inc.:
5.95%, 1/18/18		300		329,785
Corporate Bonds	Par (000)		Value
Capital Markets (concluded)
The Goldman Sachs Group, Inc. (concluded):
2.38%, 1/22/18	$	250	$	253,803
2.90%, 7/19/18		500		511,764
2.63%, 1/31/19		500		506,188
7.50%, 2/15/19		150		176,191
2.55%, 10/23/19		755		756,770
2.60%, 4/23/20		600		596,993
5.75%, 1/24/22		350		398,114
3.63%, 1/22/23		150		149,054
4.00%, 3/03/24		425		432,415
3.75%, 5/22/25		250		246,711
6.13%, 2/15/33		400		477,174
6.75%, 10/01/37		650		762,416
5.15%, 5/22/45		250		241,182
Invesco Finance PLC, 4.00%, 1/30/24		250		256,726
Lazard Group LLC, 4.25%, 11/14/20		150		157,719
Legg Mason, Inc., 5.63%, 1/15/44		125		133,368
Morgan Stanley:
5.75%, 10/18/16		225		237,814
4.75%, 3/22/17		760		801,759
1.88%, 1/05/18		250		250,663
6.63%, 4/01/18		500		561,028
2.38%, 7/23/19		500		496,717
5.63%, 9/23/19		250		280,149
2.65%, 1/27/20		500		499,108
5.50%, 7/28/21		100		112,809
4.88%, 11/01/22		500		531,854
4.10%, 5/22/23		250		250,467
3.88%, 4/29/24		250		252,664
5.00%, 11/24/25		250		261,715
4.35%, 9/08/26		500		489,940
3.95%, 4/23/27		250		235,722
7.25%, 4/01/32		50		66,088
6.38%, 7/24/42		50		61,390
4.30%, 1/27/45		250		233,599
Murray Street Investment Trust I, 4.65%, 3/09/17 (d)		200		210,085
The NASDAQ OMX Group, Inc., 4.25%, 6/01/24		250		254,142
Nomura Holdings, Inc.:
2.00%, 9/13/16		250		251,822
2.75%, 3/19/19		250		252,310
State Street Corp.:
3.10%, 5/15/23		250		244,919
3.30%, 12/16/24		405		404,295
TD Ameritrade Holding Corp., 2.95%, 4/01/22		250		247,877

				16,392,566
Chemicals — 0.6%
Agrium, Inc.:
3.15%, 10/01/22		50		48,478
3.50%, 6/01/23		250		244,389
3.38%, 3/15/25		145		137,867
Airgas, Inc., 2.38%, 2/15/20		250		247,013
Albemarle Corp., 4.15%, 12/01/24		250		249,193
CF Industries, Inc.:
6.88%, 5/01/18		200		225,148
5.15%, 3/15/34		250		246,926

See Notes to Financial Statements.



20	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value
Chemicals (concluded)
Cytec Industries, Inc.:
3.50%, 4/01/23	$	250	$	240,750
3.95%, 5/01/25		250		245,961
The Dow Chemical Co.:
8.55%, 5/15/19		100		121,923
4.25%, 11/15/20		300		320,008
4.13%, 11/15/21		50		52,445
3.00%, 11/15/22		250		240,506
5.25%, 11/15/41		100		102,013
E.I. du Pont de Nemours & Co.:
6.00%, 7/15/18		325		364,694
2.80%, 2/15/23		250		243,596
Eastman Chemical Co.:
3.60%, 8/15/22		200		202,167
3.80%, 3/15/25		300		299,470
Ecolab, Inc.:
2.25%, 1/12/20		135		133,643
4.35%, 12/08/21		150		161,827
LYB International Finance BV:
4.00%, 7/15/23		200		204,670
5.25%, 7/15/43		75		76,403
LyondellBasell Industries NV:
6.00%, 11/15/21		250		286,164
4.63%, 2/26/55		100		88,064
Methanex Corp., 3.25%, 12/15/19		250		251,525
Monsanto Co.:
4.20%, 7/15/34		300		273,390
4.40%, 7/15/44		150		134,321
3.95%, 4/15/45		120		99,558
The Mosaic Co.:
3.75%, 11/15/21		50		51,567
5.45%, 11/15/33		250		266,119
Potash Corp. of Saskatchewan, Inc.:
3.25%, 12/01/17		250		260,419
3.63%, 3/15/24		250		252,603
3.00%, 4/01/25		250		239,125
PPG Industries, Inc., 2.30%, 11/15/19		350		350,561
Praxair, Inc.:
1.25%, 11/07/18		250		246,718
2.65%, 2/05/25		165		157,673
Rohm & Haas Co., 7.85%, 7/15/29		250		328,341
The Sherwin-Williams Co., 1.35%, 12/15/17		200		199,331

				7,894,569
Commercial Services & Supplies — 0.1%
3M Co., 1.63%, 6/15/19		350		348,780
Northwestern University, 3.87%, 12/01/48		100		94,702
Republic Services, Inc.:
5.25%, 11/15/21		50		56,033
3.55%, 6/01/22		250		253,240
3.20%, 3/15/25		250		240,451
Vanderbilt University, 5.25%, 4/01/19		100		111,826
Waste Management, Inc.:
4.60%, 3/01/21		100		110,096
2.90%, 9/15/22		200		196,593
3.90%, 3/01/35		65		59,599

				1,471,320
Corporate Bonds	Par (000)		Value
Communications Equipment — 0.1%
Cisco Systems, Inc.:
1.10%, 3/03/17	$	500	$	501,767
2.13%, 3/01/19		500		503,477
2.90%, 3/04/21		125		127,578
5.50%, 1/15/40		350		398,919
Motorola Solutions, Inc.:
3.75%, 5/15/22		150		147,627
3.50%, 3/01/23		250		235,792

				1,915,160
Construction & Engineering — 0.0%
ABB Finance USA, Inc.:
1.63%, 5/08/17		150		150,939
2.88%, 5/08/22		100		98,383
Fluor Corp., 3.50%, 12/15/24		250		250,658

				499,980
Consumer Finance — 0.2%
American Express Co.:
1.55%, 5/22/18		250		248,108
3.63%, 12/05/24		300		291,895
4.05%, 12/03/42		67		62,143
Capital One Bank USA NA:
1.30%, 6/05/17		250		248,450
2.25%, 2/13/19		250		248,568
Capital One Financial Corp.:
2.45%, 4/24/19		250		250,026
3.50%, 6/15/23		110		108,262
Caterpillar Financial Services Corp.:
1.70%, 6/16/18		250		250,601
3.30%, 6/09/24		250		251,895
Discover Financial Services, 3.75%, 3/04/25		75		71,612
HSBC Finance Corp., 6.68%, 1/15/21		161		186,261
MasterCard, Inc., 3.38%, 4/01/24		250		255,190
Synchrony Financial, 3.75%, 8/15/21		500		503,804

				2,976,815
Containers & Packaging — 0.0%
Packaging Corp. of America, 4.50%, 11/01/23		250		257,824
Diversified Financial Services — 2.8%
Air Lease Corp.:
2.13%, 1/15/18		175		173,250
3.38%, 1/15/19		250		254,688
3.88%, 4/01/21		175		176,750
American Express Credit Corp.:
2.38%, 3/24/17		100		102,062
1.13%, 6/05/17		500		498,117
1.55%, 9/22/17		105		105,342
2.13%, 3/18/19		400		400,822
2.25%, 8/15/19		250		250,421
American Honda Finance Corp.:
1.55%, 12/11/17		250		250,864
2.15%, 3/13/20		250		248,597
Bank of America Corp.:
3.75%, 7/12/16		350		358,799
3.88%, 3/22/17		300		311,903
1.70%, 8/25/17		250		250,287
2.00%, 1/11/18		1,050		1,053,441

See Notes to Financial Statements.



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	21

Schedule of Investments (continued)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value
Diversified Financial Services (continued)
Bank of America Corp. (concluded):
6.88%, 4/25/18	$	400	$	451,872
2.60%, 1/15/19		500		505,445
5.63%, 7/01/20		150		169,059
5.00%, 5/13/21		100		109,777
5.70%, 1/24/22		100		113,516
4.13%, 1/22/24		500		512,434
4.20%, 8/26/24		500		498,796
4.00%, 1/22/25		250		243,574
4.25%, 10/22/26		290		284,085
6.11%, 1/29/37		100		112,082
7.75%, 5/14/38		200		266,297
5.88%, 2/07/42		100		115,326
5.00%, 1/21/44		250		259,571
4.88%, 4/01/44		175		177,752
Series L, 2.65%, 4/01/19		500		505,923
Series L, 3.95%, 4/21/25		155		149,294
Bank of America NA:
1.65%, 3/26/18		750		748,882
1.75%, 6/05/18		250		249,462
Boeing Capital Corp., 4.70%, 10/27/19		250		277,161
Capital One Bank USA NA, 3.38%, 2/15/23		350		339,983
CIT Group, Inc., 1.80%, 2/05/18		480		478,843
Citigroup, Inc.:
4.45%, 1/10/17		400		417,904
1.35%, 3/10/17		250		249,896
2.50%, 9/26/18		350		353,942
8.50%, 5/22/19		250		304,924
2.50%, 7/29/19		250		250,367
2.40%, 2/18/20		695		686,395
4.05%, 7/30/22		250		255,995
3.50%, 5/15/23		250		244,082
3.88%, 3/26/25		500		478,953
3.30%, 4/27/25		155		149,049
4.40%, 6/10/25		250		249,068
4.30%, 11/20/26		150		146,673
6.63%, 6/15/32		100		118,375
6.13%, 8/25/36		184		210,197
8.13%, 7/15/39		75		107,652
6.68%, 9/13/43		250		302,785
Deutsche Bank AG, London:
1.40%, 2/13/17		500		498,502
2.50%, 2/13/19		250		251,271
3.70%, 5/30/24		215		212,320
Ford Motor Credit Co. LLC:
4.25%, 2/03/17		250		259,845
1.72%, 12/06/17		250		248,702
2.38%, 1/16/18		250		252,324
2.24%, 6/15/18		250		250,169
2.38%, 3/12/19		500		498,388
2.60%, 11/04/19		250		248,176
2.46%, 3/27/20		250		245,684
4.38%, 8/06/23		220		228,161
General Electric Capital Corp.:
1.50%, 7/12/16		250		251,873
2.90%, 1/09/17		100		102,952
2.30%, 4/27/17		1,000		1,019,526
5.63%, 5/01/18		300		332,047
2.30%, 1/14/19		500		506,928
Corporate Bonds	Par (000)		Value
Diversified Financial Services (continued)
General Electric Capital Corp. (concluded):
6.00%, 8/07/19	$	100	$	114,309
4.38%, 9/16/20		50		54,446
4.63%, 1/07/21		250		275,251
4.65%, 10/17/21		200		219,131
3.45%, 5/15/24		300		303,987
6.75%, 3/15/32		500		649,125
5.88%, 1/14/38		750		897,022
6.88%, 1/10/39		250		335,669
6.38%, 11/15/67 (e)		250		268,750
General Motors Financial Co., Inc.:
2.40%, 4/10/18		105		105,261
3.45%, 4/10/22		150		146,978
4.00%, 1/15/25		250		245,308
IntercontinentalExchange Group, Inc., 2.50%, 10/15/18		250		255,491
Jefferies Group LLC:
8.50%, 7/15/19		125		148,394
5.13%, 1/20/23		150		154,856
John Deere Capital Corp.:
1.95%, 12/13/18		500		505,224
2.25%, 4/17/19		100		100,899
2.05%, 3/10/20		1,000		989,107
2.80%, 3/04/21		250		253,250
3.90%, 7/12/21		50		53,870
JPMorgan Chase & Co.:
3.15%, 7/05/16		300		306,075
1.35%, 2/15/17		1,250		1,251,091
2.00%, 8/15/17		250		252,536
1.80%, 1/25/18		1,000		1,003,084
1.63%, 5/15/18		500		496,106
2.35%, 1/28/19		500		501,926
2.20%, 10/22/19		500		495,594
4.50%, 1/24/22		300		321,502
3.25%, 9/23/22		200		198,703
3.20%, 1/25/23		150		147,117
3.38%, 5/01/23		250		242,755
3.88%, 9/10/24		300		295,172
3.13%, 1/23/25		250		238,689
4.13%, 12/15/26		250		245,819
6.40%, 5/15/38		100		123,924
5.50%, 10/15/40		125		140,221
5.60%, 7/15/41		50		56,688
5.63%, 8/16/43		500		533,230
4.85%, 2/01/44		100		103,328
4.95%, 6/01/45		250		243,017
JPMorgan Chase Bank NA, 6.00%, 10/01/17		250		272,588
Leucadia National Corp., 5.50%, 10/18/23		150		153,132
Moody’s Corp.:
2.75%, 7/15/19		40		40,341
4.50%, 9/01/22		50		53,259
MUFG Americas Holdings Corp., 3.00%, 2/10/25		250		234,589
National Rural Utilities Cooperative Finance Corp.:
2.30%, 11/15/19		250		251,200
3.40%, 11/15/23		350		357,440
2.85%, 1/27/25		250		240,213

See Notes to Financial Statements.



22	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value
Diversified Financial Services (concluded)
NCUA Guaranteed Notes, 3.00%, 6/12/19	$	1,000	$	1,052,400
ORIX Corp., 3.75%, 3/09/17		100		103,848
PACCAR Financial Corp., 2.20%, 9/15/19		250		251,743
Royal Bank of Scotland Group PLC:
1.88%, 3/31/17		175		174,110
6.40%, 10/21/19		250		279,381
Toyota Motor Credit Corp., 1.38%, 1/10/18		200		200,118
UBS AG, 2.35%, 3/26/20		500		496,520
UBS AG/Stamford CT:
5.75%, 4/25/18		300		332,361
2.38%, 8/14/19		800		799,937

				39,503,687
Diversified Telecommunication Services — 1.1%
AT&T, Inc.:
1.70%, 6/01/17		500		501,916
2.38%, 11/27/18		500		504,376
2.45%, 6/30/20		1,500		1,470,403
4.50%, 5/15/35		310		284,979
6.30%, 1/15/38		200		222,081
5.35%, 9/01/40		463		455,831
5.55%, 8/15/41		200		204,914
4.30%, 12/15/42		151		129,414
4.35%, 6/15/45		759		647,970
4.75%, 5/15/46		350		318,491
British Telecommunications PLC:
2.35%, 2/14/19		250		251,104
9.63%, 12/15/30		50		74,209
CC Holdings GS V LLC/Crown Castle GS III Corp., 2.38%, 12/15/17		325		328,756
Deutsche Telekom International Finance BV, 8.75%, 6/15/30		400		562,772
Embarq Corp., 8.00%, 6/01/36		100		110,870
Orange SA:
2.75%, 9/14/16		200		203,620
4.13%, 9/14/21		150		158,665
5.38%, 1/13/42		225		231,173
Qwest Corp.:
6.50%, 6/01/17		150		162,174
6.75%, 12/01/21		50		55,188
Telefonaktiebolaget LM Ericsson, 4.13%, 5/15/22		100		103,584
Telefonica Emisiones SAU:
3.19%, 4/27/18		250		256,810
5.46%, 2/16/21		50		55,287
4.57%, 4/27/23		200		210,015
7.05%, 6/20/36		75		92,111
Telefonica Europe BV, 8.25%, 9/15/30		300		402,433
Verizon Communications, Inc.:
2.50%, 9/15/16		172		174,791
1.35%, 6/09/17		250		249,646
1.10%, 11/01/17		250		247,109
3.65%, 9/14/18		500		525,893
2.55%, 6/17/19		500		506,835
2.63%, 2/21/20		250		249,438
3.50%, 11/01/21		400		405,507
4.15%, 3/15/24		250		256,603
3.50%, 11/01/24		500		486,329
7.75%, 12/01/30		100		129,777
6.40%, 9/15/33		500		572,970
Corporate Bonds	Par (000)		Value
Diversified Telecommunication Services (concluded)
Verizon Communications, Inc. (concluded):
5.05%, 3/15/34	$	500	$	503,364
4.40%, 11/01/34		500		462,879
4.27%, 1/15/36 (a)		250		225,517
6.40%, 2/15/38		200		227,815
6.00%, 4/01/41		250		275,023
3.85%, 11/01/42		250		206,324
6.55%, 9/15/43		750		877,315
5.01%, 8/21/54		650		596,432

				15,178,713
Electric Utilities — 1.5%
Alabama Power Co., 5.50%, 10/15/17		100		109,565
Ameren Illinois Co.:
2.70%, 9/01/22		100		98,197
4.30%, 7/01/44		250		248,219
American Electric Power Co., Inc.:
1.65%, 12/15/17		200		200,232
Series F, 2.95%, 12/15/22		500		485,262
Arizona Public Service Co., 3.15%, 5/15/25		250		245,178
Berkshire Hathaway Energy Co.:
1.10%, 5/15/17		500		497,760
2.00%, 11/15/18		500		502,594
3.50%, 2/01/25		110		109,541
6.13%, 4/01/36		250		294,515
5.15%, 11/15/43		250		266,817
4.50%, 2/01/45		400		393,651
CenterPoint Energy Houston Electric LLC, 3.55%, 8/01/42		100		87,729
Commonwealth Edison Co.:
2.15%, 1/15/19		500		502,872
3.10%, 11/01/24		250		247,267
5.90%, 3/15/36		50		59,558
The Connecticut Light & Power Co., 2.50%, 1/15/23		150		143,595
Consolidated Edison Co. of New York, Inc., 3.30%, 12/01/24		250		250,066
Dominion Gas Holdings LLC, 3.60%, 12/15/24		250		248,976
Dominion Resources, Inc., 7.00%, 6/15/38		250		310,910
DTE Electric Co.:
4.00%, 4/01/43		150		142,430
3.70%, 3/15/45		145		131,080
Duke Energy Carolinas LLC, 6.05%, 4/15/38		100		123,188
Duke Energy Corp.:
2.15%, 11/15/16		500		507,684
1.63%, 8/15/17		250		250,931
3.95%, 10/15/23		250		259,380
Duke Energy Indiana, Inc.:
4.20%, 3/15/42		150		146,150
4.90%, 7/15/43		250		269,689
Duke Energy Progress, Inc.:
4.10%, 5/15/42		150		143,550
4.10%, 3/15/43		250		239,075
4.38%, 3/30/44		100		100,587
Entergy Corp.:
4.70%, 1/15/17		150		156,105
4.00%, 7/15/22		200		201,538

See Notes to Financial Statements.



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	23

Schedule of Investments (continued)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value
Electric Utilities (continued)
Entergy Louisiana LLC, 4.05%, 9/01/23	$	250	$	263,101
Eversource Energy, Series H, 3.15%, 1/15/25		125		120,777
Exelon Corp., 3.95%, 6/15/25		250		251,475
Exelon Generation Co. LLC, 6.25%, 10/01/39		150		165,517
Florida Power & Light Co.:
2.75%, 6/01/23		250		245,084
5.95%, 2/01/38		50		61,070
Georgia Power Co., 4.30%, 3/15/42		200		189,835
Great Plains Energy, Inc., 5.29%, 6/15/22 (d)		150		166,885
Indiana Michigan Power Co., 6.05%, 3/15/37		175		204,443
Interstate Power & Light Co., 3.25%, 12/01/24		250		251,352
LG&E and KU Energy LLC, 3.75%, 11/15/20		50		52,243
Louisville Gas & Electric Co., 4.65%, 11/15/43		250		259,827
Nevada Power Co., 5.45%, 5/15/41		50		57,027
NextEra Energy Capital Holdings, Inc., 3.63%, 6/15/23		1,000		997,831
NiSource Finance Corp., 6.13%, 3/01/22		500		577,579
Nisource Finance Corp.:
5.95%, 6/15/41		50		58,203
5.25%, 2/15/43		75		79,925
Northeast Utilities, 1.45%, 5/01/18		250		248,530
Northern States Power Co., 3.40%, 8/15/42		200		175,027
Oglethorpe Power Corp., 4.55%, 6/01/44		250		246,295
Oncor Electric Delivery Co. LLC:
7.00%, 9/01/22		100		123,028
5.30%, 6/01/42		75		83,548
3.75%, 4/01/45 (a)		250		223,429
Pacific Gas & Electric Co.:
3.25%, 6/15/23		500		496,826
6.05%, 3/01/34		250		300,553
5.13%, 11/15/43		250		270,340
4.75%, 2/15/44		250		257,738
PacifiCorp:
2.95%, 2/01/22		100		99,990
2.95%, 6/01/23		300		297,871
Pennsylvania Electric Co., 6.15%, 10/01/38		250		277,342
Potomac Electric Power Co., 3.60%, 3/15/24		250		255,643
PPL Capital Funding, Inc.:
1.90%, 6/01/18		250		249,395
3.40%, 6/01/23		250		249,111
Progress Energy, Inc.:
4.40%, 1/15/21		100		107,033
7.75%, 3/01/31		50		67,477
Public Service Co. of Colorado:
3.95%, 3/15/43		200		194,535
4.30%, 3/15/44		75		75,567
Public Service Electric & Gas Co.:
1.80%, 6/01/19		250		246,814
3.50%, 8/15/20		50		52,691
2.38%, 5/15/23		250		238,258
3.05%, 11/15/24		250		247,352
3.95%, 5/01/42		50		47,431
3.65%, 9/01/42		50		44,648
Corporate Bonds	Par (000)		Value
Electric Utilities (concluded)
Puget Energy, Inc.:
5.63%, 7/15/22	$	500	$	561,963
3.65%, 5/15/25 (a)		250		244,686
South Carolina Electric & Gas Co., 4.60%, 6/15/43		250		247,147
Southern California Edison Co.:
1.13%, 5/01/17		500		499,462
2.40%, 2/01/22		250		243,155
5.50%, 3/15/40		50		58,200
4.65%, 10/01/43		350		364,296
The Toledo Edison Co., 6.15%, 5/15/37		100		114,837
Virginia Electric & Power Co.:
2.95%, 1/15/22		400		398,730
4.00%, 1/15/43		250		233,622
4.45%, 2/15/44		150		150,632
WEC Energy Group, Inc., 3.55%, 6/15/25		350		349,077

				20,618,344
Electrical Equipment — 0.1%
Amphenol Corp., 2.55%, 1/30/19		350		354,540
Emerson Electric Co.:
5.00%, 4/15/19		100		110,815
2.63%, 2/15/23		350		341,791
Pentair Finance SA, 1.88%, 9/15/17		250		250,938
Roper Industries, Inc., 3.13%, 11/15/22		150		145,223

				1,203,307
Electronic Equipment, Instruments & Components — 0.1%
Arrow Electronics, Inc., 3.00%, 3/01/18		750		761,854
Corning, Inc.:
3.70%, 11/15/23		250		257,396
4.75%, 3/15/42		50		51,194
Ingram Micro, Inc., 4.95%, 12/15/24		200		204,428
Jabil Circuit, Inc., 4.70%, 9/15/22		250		252,500
Tyco Electronics Group SA:
6.55%, 10/01/17		50		55,479
3.50%, 2/03/22		100		101,240

				1,684,091
Energy Equipment & Services — 0.1%
Baker Hughes, Inc., 5.13%, 9/15/40		100		107,724
Ensco PLC:
4.70%, 3/15/21		100		101,860
4.50%, 10/01/24		250		238,839
5.20%, 3/15/25		65		64,354
FMC Technologies, Inc., 3.45%, 10/01/22		100		96,378
Halliburton Co.:
6.15%, 9/15/19		100		115,052
4.50%, 11/15/41		50		49,666
4.75%, 8/01/43		250		256,871
National Oilwell Varco, Inc., 3.95%, 12/01/42		150		130,602
Noble Holding International Ltd.:
2.50%, 3/15/17		150		149,813
5.95%, 4/01/25		200		197,195
5.25%, 3/15/42		50		37,680
Transcontinental Gas Pipe Line Co. LLC, 4.45%, 8/01/42		250		209,450

				1,755,484
Food & Staples Retailing — 0.5%
Costco Wholesale Corp.:
1.13%, 12/15/17		150		149,766
2.25%, 2/15/22		85		82,522

See Notes to Financial Statements.



24	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value
Food & Staples Retailing (concluded)
CVS Caremark Corp.:
2.25%, 8/12/19	$	500	$	497,729
4.00%, 12/05/23		500		516,494
H.J.Heinz Co., 5.00%, 7/15/35 (a)		500		506,010
The Kroger Co.:
6.15%, 1/15/20		100		115,063
3.30%, 1/15/21		500		510,344
3.40%, 4/15/22		100		100,733
5.15%, 8/01/43		125		131,775
Sysco Corp., 4.35%, 10/02/34		500		505,000
Target Corp., 2.30%, 6/26/19		750		760,225
Wal-Mart Stores, Inc.:
1.00%, 4/21/17		500		502,178
1.13%, 4/11/18		250		249,045
3.63%, 7/08/20		150		159,664
6.20%, 4/15/38		250		311,863
5.63%, 4/15/41		500		590,089
4.00%, 4/11/43		150		143,127
4.75%, 10/02/43		250		266,281
4.30%, 4/22/44		250		250,663
Walgreen Co.:
1.80%, 9/15/17		200		200,793
3.10%, 9/15/22		200		194,245
Walgreens Boots Alliance Inc.:
4.50%, 11/18/34		155		145,752
4.80%, 11/18/44		150		141,149

				7,030,510
Food Products — 0.3%
Archer-Daniels-Midland Co.:
5.77%, 3/01/41 (d)		250		299,393
4.54%, 3/26/42		75		75,711
ConAgra Foods, Inc.:
3.25%, 9/15/22		200		186,161
4.65%, 1/25/43		165		139,981
General Mills, Inc.:
2.20%, 10/21/19		300		298,270
3.15%, 12/15/21		150		152,312
The JM Smucker Co.:
3.50%, 10/15/21		50		51,431
4.25%, 3/15/35 (a)		250		234,008
Kellogg Co.:
1.88%, 11/17/16		200		201,888
Series B, 7.45%, 4/01/31		100		125,915
Kraft Foods Group, Inc.:
5.38%, 2/10/20		52		58,042
6.50%, 2/09/40		250		293,892
5.00%, 6/04/42		200		199,304
Mead Johnson Nutrition Co., 4.60%, 6/01/44		250		237,964
Mondelez International, Inc.:
2.25%, 2/01/19		250		250,403
4.00%, 2/01/24		250		258,931
Tyson Foods, Inc.:
2.65%, 8/15/19		500		503,300
4.50%, 6/15/22		150		159,336
4.88%, 8/15/34		70		70,437
Unilever Capital Corp.:
2.20%, 3/06/19		200		201,834
4.25%, 2/10/21		200		219,854

				4,218,367
Corporate Bonds	Par (000)		Value
Gas Utilities — 0.0%
AGL Capital Corp., 3.50%, 9/15/21	$	50	$	52,133
Atmos Energy Corp., 4.15%, 1/15/43		100		94,606
National Fuel Gas Co., 3.75%, 3/01/23		300		278,161

				424,900
Health Care Equipment & Supplies — 0.4%
Baxter International, Inc.:
1.85%, 6/15/18		250		249,175
4.50%, 6/15/43		250		249,859
Becton Dickinson & Co.:
1.80%, 12/15/17		250		250,030
2.68%, 12/15/19		500		500,378
3.30%, 3/01/23		200		194,295
6.00%, 5/15/39		250		288,290
Boston Scientific Corp.:
6.00%, 1/15/20		100		113,238
4.13%, 10/01/23		100		101,520
3.85%, 5/15/25		250		242,563
Covidien International Finance SA:
2.95%, 6/15/23		250		244,416
6.55%, 10/15/37		25		31,856
Medtronic, Inc.:
1.38%, 4/01/18		300		298,789
4.13%, 3/15/21		50		54,018
3.15%, 3/15/22 (a)		350		351,568
3.63%, 3/15/24		400		410,058
4.38%, 3/15/35 (a)		350		347,314
4.00%, 4/01/43		150		138,435
4.63%, 3/15/45 (a)		250		253,087
St. Jude Medical, Inc., 3.25%, 4/15/23		150		147,899
Stryker Corp., 1.30%, 4/01/18		200		198,420
Zimmer Holdings, Inc.:
3.15%, 4/01/22		500		491,828
4.25%, 8/15/35		295		272,657

				5,429,693
Health Care Providers & Services — 0.6%
Aetna, Inc.:
1.50%, 11/15/17		250		250,615
4.13%, 6/01/21		250		267,896
2.75%, 11/15/22		250		235,876
3.50%, 11/15/24		70		68,619
6.75%, 12/15/37		50		62,916
4.75%, 3/15/44		25		24,562
AmerisourceBergen Corp.:
1.15%, 5/15/17		250		249,573
4.25%, 3/01/45		250		226,948
Cardinal Health, Inc.:
3.20%, 6/15/22		50		49,259
3.50%, 11/15/24		250		245,844
4.60%, 3/15/43		50		48,231
Cigna Corp.:
4.00%, 2/15/22		25		25,763
3.25%, 4/15/25		300		287,766
5.38%, 2/15/42		50		53,680
Dignity Health:
2.64%, 11/01/19		100		101,000
5.27%, 11/01/64		100		99,705
Express Scripts Holding Co.:
2.65%, 2/15/17		350		356,269

See Notes to Financial Statements.



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	25

Schedule of Investments (continued)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value
Health Care Providers & Services (concluded)
Express Scripts Holding Co. (concluded):
2.25%, 6/15/19	$	350	$	347,166
4.75%, 11/15/21		300		325,532
3.50%, 6/15/24		250		244,513
Humana, Inc., 4.95%, 10/01/44		250		245,305
Kaiser Foundation Hospitals, 3.50%, 4/01/22		100		101,247
Laboratory Corp. of America Holdings:
3.75%, 8/23/22		100		101,142
4.00%, 11/01/23		100		102,103
3.60%, 2/01/25		75		71,731
McKesson Corp.:
2.85%, 3/15/23		150		143,261
4.88%, 3/15/44		250		248,439
Quest Diagnostics, Inc.:
4.70%, 4/01/21		100		108,148
4.25%, 4/01/24		250		253,530
3.50%, 3/30/25		370		351,122
UnitedHealth Group, Inc.:
1.40%, 10/15/17		250		250,279
1.63%, 3/15/19		550		543,426
2.30%, 12/15/19		250		250,611
2.88%, 3/15/23		250		240,658
6.88%, 2/15/38		100		131,535
5.95%, 2/15/41		100		119,279
3.95%, 10/15/42		150		135,718
WellPoint, Inc.:
1.88%, 1/15/18		450		449,217
2.25%, 8/15/19		225		222,277
3.13%, 5/15/22		200		194,368
3.30%, 1/15/23		100		96,110
4.63%, 5/15/42		50		45,703
5.10%, 1/15/44		150		146,615
4.85%, 8/15/54		150		138,362

				8,261,919
Hotels, Restaurants & Leisure — 0.2%
Carnival Corp., 3.95%, 10/15/20		250		262,480
Hyatt Hotels Corp., 3.38%, 7/15/23		190		185,017
Marriott International, Inc.:
3.00%, 3/01/19		100		102,538
3.25%, 9/15/22		100		98,598
McDonald’s Corp.:
1.88%, 5/29/19		100		99,787
3.50%, 7/15/20		50		52,550
3.25%, 6/10/24		400		397,495
3.70%, 2/15/42		100		84,720
Starbucks Corp., 3.85%, 10/01/23		250		262,843
Starwood Hotels & Resorts Worldwide, Inc.:
3.13%, 2/15/23		250		238,114
4.50%, 10/01/34		250		233,087
Wyndham Worldwide Corp., 4.25%, 3/01/22		50		50,107
Yum! Brands, Inc.:
5.30%, 9/15/19		100		109,880
5.35%, 11/01/43		100		96,004

				2,273,220
Household Durables — 0.1%
Leggett & Platt, Inc., 3.80%, 11/15/24		200		200,589
Corporate Bonds	Par (000)		Value
Household Durables (concluded)
Mohawk Industries, Inc., 3.85%, 2/01/23	$	125	$	124,823
Newell Rubbermaid, Inc., 4.00%, 12/01/24		250		253,228
Whirlpool Corp., 5.15%, 3/01/43		200		204,958

				783,598
Household Products — 0.1%
The Clorox Co.:
3.05%, 9/15/22		50		48,854
3.50%, 12/15/24		250		247,192
Kimberly-Clark Corp.:
1.90%, 5/22/19		500		498,848
3.63%, 8/01/20		50		53,320
2.65%, 3/01/25		85		82,164
The Procter & Gamble Co.:
2.30%, 2/06/22		250		248,009
5.55%, 3/05/37		250		301,763

				1,480,150
Independent Power and Renewable Electricity Producers — 0.1%
Exelon Generation Co. LLC:
4.25%, 6/15/22		500		511,798
5.60%, 6/15/42		50		50,877
Southern Power Co., 5.25%, 7/15/43		500		530,195

				1,092,870
Industrial Conglomerates — 0.1%
General Electric Co.:
5.25%, 12/06/17		750		816,970
2.70%, 10/09/22		150		146,635
4.50%, 3/11/44		500		507,795
Koninklijke Philips Electronics NV, 3.75%, 3/15/22		250		253,370

				1,724,770
Insurance — 1.0%
ACE INA Holdings, Inc., 4.15%, 3/13/43		150		142,791
Aflac, Inc.:
2.65%, 2/15/17		250		255,888
3.63%, 6/15/23		250		252,640
3.63%, 11/15/24		250		250,851
Alleghany Corp., 4.95%, 6/27/22		50		53,931
The Allstate Corp.:
3.15%, 6/15/23		250		250,321
4.50%, 6/15/43		150		151,347
American International Group, Inc.:
2.30%, 7/16/19		500		499,107
3.38%, 8/15/20		250		258,767
4.88%, 6/01/22		250		274,229
4.13%, 2/15/24		250		259,419
Aon PLC, 4.45%, 5/24/43		200		185,661
Arch Capital Group US, Inc., 5.14%, 11/01/43		125		127,732
Assurant, Inc., 2.50%, 3/15/18		250		253,694
Assured Guaranty US Holdings, Inc., 5.00%, 7/01/24		110		107,884
AXA SA, 8.60%, 12/15/30		50		67,008
Berkshire Hathaway Finance Corp., 4.40%, 5/15/42		100		98,470
Berkshire Hathaway, Inc.:
1.90%, 1/31/17		100		101,560
1.55%, 2/09/18		500		502,398

See Notes to Financial Statements.



26	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value
Insurance (concluded)
Berkshire Hathaway, Inc. (concluded):
2.10%, 8/14/19	$	500	$	503,501
4.50%, 2/11/43		100		100,257
The Chubb Corp., Series 1, 6.50%, 5/15/38		100		130,877
CNA Financial Corp., 5.75%, 8/15/21		100		113,233
First American Financial Corp., 4.60%, 11/15/24		200		201,786
The Hartford Financial Services Group, Inc.:
6.30%, 3/15/18		250		278,053
6.63%, 3/30/40		100		124,673
6.10%, 10/01/41		100		119,130
Lincoln National Corp.:
4.85%, 6/24/21		300		328,893
4.20%, 3/15/22		100		104,934
4.00%, 9/01/23		200		205,580
3.35%, 3/09/25		65		63,051
Loews Corp., 2.63%, 5/15/23		250		239,043
Markel Corp., 3.63%, 3/30/23		250		246,398
Marsh & McLennan Cos., Inc.:
2.35%, 9/10/19		235		235,760
2.35%, 3/06/20		190		189,232
4.80%, 7/15/21		50		55,269
MetLife, Inc.:
4.75%, 2/08/21		200		220,905
3.00%, 3/01/25		650		621,934
6.40%, 12/15/36		100		109,750
4.13%, 8/13/42		300		279,211
4.88%, 11/13/43		250		259,464
Old Republic International Corp., 4.88%, 10/01/24		250		258,639
Principal Financial Group, Inc.:
1.85%, 11/15/17		250		251,790
3.40%, 5/15/25		250		244,216
4.63%, 9/15/42		50		48,136
The Progressive Corp.:
3.75%, 8/23/21		50		53,357
4.35%, 4/25/44		100		99,370
3.70%, 1/26/45		200		176,564
Prudential Financial, Inc.:
2.35%, 8/15/19		350		350,109
5.38%, 6/21/20		350		394,877
8.88%, 6/15/38 (e)		100		117,000
5.63%, 6/15/43 (e)		100		103,650
5.10%, 8/15/43		250		257,055
5.20%, 3/15/44 (e)		100		99,050
The Travelers Cos., Inc.:
3.90%, 11/01/20		250		268,797
4.60%, 8/01/43		100		103,475
Travelers Property Casualty Corp., 6.38%, 3/15/33		100		126,871
Voya Financial, Inc., 2.90%, 2/15/18		750		769,647
WR Berkley Corp., 4.63%, 3/15/22		200		212,646
XL Group PLC, Series E, 6.50% (e)(f)		150		128,345
XLIT Ltd.:
2.30%, 12/15/18		250		251,684
5.75%, 10/01/21		100		114,546

				13,254,456
Corporate Bonds	Par (000)		Value
Internet & Catalog Retail — 0.1%
Amazon.com, Inc.:
1.20%, 11/29/17	$	250	$	248,856
2.60%, 12/05/19		350		352,192
4.80%, 12/05/34		250		248,323

				849,371
Internet Software & Services — 0.1%
Baidu, Inc.:
3.25%, 8/06/18		205		210,982
2.75%, 6/09/19		350		350,175
eBay, Inc.:
2.20%, 8/01/19		500		497,936
3.25%, 10/15/20		50		51,446
2.60%, 7/15/22		50		46,444
Expedia, Inc., 4.50%, 8/15/24		250		252,156
Google, Inc., 3.63%, 5/19/21		25		26,785

				1,435,924
IT Services — 0.3%
Alibaba Group Holding Ltd. (a):
3.13%, 11/28/21		225		222,224
4.50%, 11/28/34		250		240,208
Fidelity National Information Services, Inc.:
1.45%, 6/05/17		250		249,436
2.00%, 4/15/18		250		249,769
3.50%, 4/15/23		25		24,266
International Business Machines Corp.:
1.25%, 2/08/18		500		499,225
1.95%, 2/12/19		250		251,024
1.88%, 5/15/19		250		249,843
2.90%, 11/01/21		100		101,643
3.63%, 2/12/24		275		278,518
4.00%, 6/20/42		350		315,568
Total System Services, Inc., 2.38%, 6/01/18		250		249,295
The Western Union Co.:
2.88%, 12/10/17		250		255,523
6.20%, 11/17/36		25		25,032
Xerox Corp.:
5.63%, 12/15/19		100		112,119
2.80%, 5/15/20		500		498,374

				3,822,067
Leisure Products — 0.0%
Hasbro, Inc., 5.10%, 5/15/44		60		58,986
Mattel, Inc., 1.70%, 3/15/18		200		199,010

				257,996
Life Sciences Tools & Services — 0.1%
Agilent Technologies, Inc., 3.88%, 7/15/23		200		200,452
Life Technologies Corp., 6.00%, 3/01/20		100		112,486
Thermo Fisher Scientific, Inc.:
2.25%, 8/15/16		50		50,507
2.40%, 2/01/19		500		499,458
3.30%, 2/15/22		55		54,350
3.15%, 1/15/23		250		243,745

				1,160,998
Machinery — 0.2%
Caterpillar, Inc.:
5.70%, 8/15/16		100		105,518
3.90%, 5/27/21		50		53,313

See Notes to Financial Statements.



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	27

Schedule of Investments (continued)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value
Machinery (concluded)
Caterpillar, Inc. (concluded):
3.40%, 5/15/24	$	500	$	507,605
5.20%, 5/27/41		100		110,662
3.80%, 8/15/42		250		230,087
Danaher Corp., 3.90%, 6/23/21		50		53,538
Deere & Co., 3.90%, 6/09/42		50		46,650
Flowserve Corp., 3.50%, 9/15/22		100		99,390
Illinois Tool Works, Inc.:
1.95%, 3/01/19		250		251,259
4.88%, 9/15/41		50		53,443
3.90%, 9/01/42		75		69,951
Ingersoll-Rand Global Holding Co. Ltd.:
6.88%, 8/15/18		50		56,845
2.88%, 1/15/19		500		508,380
Joy Global, Inc., 5.13%, 10/15/21		50		54,802
Stanley Black & Decker, Inc., 2.90%, 11/01/22		150		147,548
Trinity Industries, Inc., 4.55%, 10/01/24		250		241,177
Valmont Industries, Inc., 5.00%, 10/01/44		250		226,416

				2,816,584
Media — 1.1%
21st Century Fox America, Inc.:
4.50%, 2/15/21		100		108,569
3.00%, 9/15/22		650		635,082
6.20%, 12/15/34		100		116,059
6.15%, 2/15/41		150		174,188
4.75%, 9/15/44		500		488,886
CBS Corp., 4.85%, 7/01/42		325		299,391
Cintas Corp. No 2, 4.30%, 6/01/21		25		26,969
Comcast Corp.:
5.15%, 3/01/20		350		393,986
3.60%, 3/01/24		250		252,563
3.38%, 8/15/25		500		493,403
4.25%, 1/15/33		650		634,798
4.20%, 8/15/34		235		226,649
4.40%, 8/15/35		250		248,243
6.45%, 3/15/37		200		247,159
4.65%, 7/15/42		150		150,380
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc.:
2.40%, 3/15/17		250		253,302
3.80%, 3/15/22		250		251,438
4.45%, 4/01/24		250		255,828
3.95%, 1/15/25		350		343,145
5.15%, 3/15/42		150		141,120
Discovery Communications LLC:
4.38%, 6/15/21		50		52,598
3.25%, 4/01/23		50		48,132
4.95%, 5/15/42		50		46,204
4.88%, 4/01/43		150		136,067
Grupo Televisa SAB, 5.00%, 5/13/45		200		190,800
The Interpublic Group of Cos., Inc., 4.20%, 4/15/24		250		253,075
NBCUniversal Media LLC:
4.38%, 4/01/21		600		649,846
2.88%, 1/15/23		250		242,783
5.95%, 4/01/41		250		292,887
Omnicom Group, Inc.:
3.63%, 5/01/22		125		125,725
3.65%, 11/01/24		70		68,740
Corporate Bonds	Par (000)		Value
Media (concluded)
Scripps Networks Interactive, Inc., 3.90%, 11/15/24	$	250	$	245,727
Thomson Reuters Corp.:
6.50%, 7/15/18		250		282,107
4.30%, 11/23/23		250		258,647
Time Warner Cable, Inc.:
8.25%, 4/01/19		300		352,828
5.00%, 2/01/20		500		539,806
4.13%, 2/15/21		100		103,245
6.55%, 5/01/37		150		156,154
6.75%, 6/15/39		50		53,383
5.50%, 9/01/41		250		233,167
4.50%, 9/15/42		475		387,458
Time Warner, Inc.:
4.88%, 3/15/20		250		272,803
3.60%, 7/15/25		250		243,170
7.70%, 5/01/32		250		328,405
6.25%, 3/29/41		150		171,643
5.35%, 12/15/43		250		256,152
4.65%, 6/01/44		250		237,662
Viacom, Inc.:
2.50%, 9/01/18		500		505,209
5.63%, 9/15/19		250		278,088
3.13%, 6/15/22		150		143,555
3.25%, 3/15/23		200		190,062
3.88%, 4/01/24		250		244,787
4.38%, 3/15/43		70		56,711
5.85%, 9/01/43		100		99,534
The Walt Disney Co.:
1.85%, 5/30/19		500		500,058
3.75%, 6/01/21		50		53,463
2.35%, 12/01/22		300		290,215
WPP Finance 2010:
4.75%, 11/21/21		100		109,042
3.75%, 9/19/24		250		249,191

				14,690,287
Metals & Mining — 0.5%
Barrick Gold Corp.:
3.85%, 4/01/22		350		339,233
4.10%, 5/01/23		500		487,187
Barrick North America Finance LLC, 5.70%, 5/30/41		50		45,695
BHP Billiton Finance USA Ltd.:
1.63%, 2/24/17		100		100,904
2.05%, 9/30/18		175		177,534
2.88%, 2/24/22		250		245,005
5.00%, 9/30/43		350		363,312
Carpenter Technology Corp., 4.45%, 3/01/23		250		248,682
Freeport-McMoRan Copper & Gold, Inc.:
2.15%, 3/01/17		100		100,145
3.55%, 3/01/22		50		46,281
5.45%, 3/15/43		350		292,200
Freeport-McMoRan, Inc., 5.40%, 11/14/34		100		86,265
Goldcorp, Inc.:
2.13%, 3/15/18		150		150,346
3.63%, 6/09/21		250		248,655
Kinross Gold Corp., 5.95%, 3/15/24		200		189,755

See Notes to Financial Statements.



28	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value
Metals & Mining (concluded)
Newmont Mining Corp.:
3.50%, 3/15/22	$	450	$	429,453
4.88%, 3/15/42		50		41,955
Reliance Steel & Aluminum Co., 4.50%, 4/15/23		25		24,594
Rio Tinto Finance USA Ltd.:
4.13%, 5/20/21		150		158,799
3.75%, 6/15/25		500		492,989
5.20%, 11/02/40		350		356,754
Rio Tinto Finance USA PLC:
1.63%, 8/21/17		250		250,176
2.88%, 8/21/22		100		96,815
4.75%, 3/22/42		100		97,432
Southern Copper Corp.:
6.75%, 4/16/40		100		103,274
5.88%, 4/23/45		365		347,188
Teck Resources Ltd.:
3.00%, 3/01/19		450		433,696
4.75%, 1/15/22		300		278,743
3.75%, 2/01/23		100		86,020
5.20%, 3/01/42		50		36,486
Vale Overseas Ltd.:
4.38%, 1/11/22		250		244,238
6.88%, 11/21/36		200		193,362
Vale SA, 5.63%, 9/11/42		250		210,542

				7,003,715
Multi-Utilities — 0.2%
CMS Energy Corp., 4.70%, 3/31/43		200		200,801
Consolidated Edison Co. of New York, Inc.:
6.65%, 4/01/19		100		116,609
4.20%, 3/15/42		150		142,517
3.95%, 3/01/43		150		136,940
4.45%, 3/15/44		250		246,657
Dominion Resources, Inc.:
1.40%, 9/15/17		250		249,946
3.63%, 12/01/24		250		247,899
4.90%, 8/01/41		50		50,927
ONE Gas, Inc., 4.66%, 2/01/44		250		262,262
San Diego Gas & Electric Co.:
1.91%, 2/01/22		250		251,039
3.60%, 9/01/23		250		259,298
4.30%, 4/01/42		100		100,412
SCANA Corp., 4.13%, 2/01/22		100		100,739
Sempra Energy:
2.30%, 4/01/17		250		253,678
2.40%, 3/15/20		250		248,056
4.05%, 12/01/23		250		258,220
3.55%, 6/15/24		250		249,778

				3,375,778
Multiline Retail — 0.1%
Dollar General Corp., 1.88%, 4/15/18		250		248,850
Kohl’s Corp., 4.00%, 11/01/21		50		52,623
Nordstrom, Inc., 4.00%, 10/15/21		100		106,259
Target Corp.:
2.90%, 1/15/22		150		151,725
4.00%, 7/01/42		350		330,739

				890,196
Corporate Bonds	Par (000)		Value
Offshore Drilling & Other Services — 0.0%
Lam Research Corp., 3.80%, 3/15/25	$	230	$	223,861
Oil, Gas & Consumable Fuels — 3.0%
Alberta Energy Co., Ltd., 7.38%, 11/01/31		50		58,385
Anadarko Petroleum Corp.:
6.38%, 9/15/17		250		274,351
6.45%, 9/15/36		350		403,858
4.50%, 7/15/44		250		229,763
Apache Corp.:
3.25%, 4/15/22		145		142,598
6.00%, 1/15/37		100		107,868
4.75%, 4/15/43		250		231,356
4.25%, 1/15/44		100		86,843
Boardwalk Pipelines LP, 3.38%, 2/01/23		200		181,354
BP Capital Markets PLC:
1.85%, 5/05/17		250		253,056
1.38%, 5/10/18		250		248,641
2.24%, 9/26/18		300		304,347
2.24%, 5/10/19		500		503,774
2.52%, 1/15/20		115		115,806
2.32%, 2/13/20		250		249,005
4.74%, 3/11/21		50		55,173
3.06%, 3/17/22		710		708,149
3.25%, 5/06/22		100		100,255
3.99%, 9/26/23		250		258,721
Buckeye Partners LP, 4.15%, 7/01/23		250		243,668
Canadian Natural Resources Ltd.:
3.45%, 11/15/21		100		101,313
3.80%, 4/15/24		250		247,203
3.90%, 2/01/25		250		247,015
6.25%, 3/15/38		50		55,388
Cenovus Energy, Inc.:
5.70%, 10/15/19		150		167,554
3.00%, 8/15/22		100		94,568
5.20%, 9/15/43		250		236,108
Chevron Corp.:
1.72%, 6/24/18		500		502,982
2.19%, 11/15/19		55		55,305
2.43%, 6/24/20		550		555,075
2.41%, 3/03/22		145		140,990
CNOOC Finance 2013 Ltd., 3.00%, 5/09/23		300		284,210
CNOOC Nexen Finance 2014 ULC, 4.25%, 4/30/24		500		510,624
ConocoPhillips Co.:
1.05%, 12/15/17		1,000		992,466
4.15%, 11/15/34		395		382,033
6.50%, 2/01/39		400		496,417
ConocoPhillips Holding Co., 6.95%, 4/15/29		100		127,908
Continental Resources, Inc.:
5.00%, 9/15/22		250		245,158
4.50%, 4/15/23		300		289,263
Devon Energy Corp.:
2.25%, 12/15/18		500		501,355
4.00%, 7/15/21		150		157,281
4.75%, 5/15/42		200		190,840
5.00%, 6/15/45		250		246,804
Diamond Offshore Drilling, Inc., 4.88%, 11/01/43		250		198,139

See Notes to Financial Statements.



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	29

Schedule of Investments (continued)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value
Oil, Gas & Consumable Fuels (continued)
Ecopetrol SA:
7.63%, 7/23/19	$	100	$	115,875
5.38%, 6/26/26		250		247,500
5.88%, 5/28/45		250		220,625
El Paso Pipeline Partners Operating Co. LLC, 5.00%, 10/01/21		200		211,629
Enable Midstream Partners LP, 2.40%, 5/15/19 (a)		350		338,208
Enbridge Energy Partners LP, 4.20%, 9/15/21		100		102,555
Enbridge, Inc., 3.50%, 6/10/24		65		60,711
Encana Corp., 3.90%, 11/15/21		700		714,250
Energy Transfer Partners LP:
9.70%, 3/15/19		44		54,248
5.20%, 2/01/22		250		261,756
3.60%, 2/01/23		150		142,050
4.90%, 2/01/24		250		254,250
4.75%, 1/15/26		500		494,813
4.90%, 3/15/35		250		225,577
5.95%, 10/01/43		150		147,002
EnLink Midstream Partners LP, 5.05%, 4/01/45		150		136,030
Enterprise Products Operating LLC:
2.55%, 10/15/19		500		499,856
3.90%, 2/15/24		125		125,519
3.75%, 2/15/25		40		39,203
3.70%, 2/15/26		60		58,096
5.95%, 2/01/41		150		163,263
4.45%, 2/15/43		75		67,783
4.85%, 3/15/44		200		188,096
5.10%, 2/15/45		250		243,161
EOG Resources, Inc.:
5.63%, 6/01/19		150		169,653
3.15%, 4/01/25		80		78,049
EQT Corp., 4.88%, 11/15/21		50		52,687
Exxon Mobil Corp.:
2.40%, 3/06/22		500		490,506
3.18%, 3/15/24		250		253,605
2.71%, 3/06/25		250		242,772
Hess Corp.:
8.13%, 2/15/19		200		236,779
5.60%, 2/15/41		300		307,268
Husky Energy, Inc., 3.95%, 4/15/22		150		150,414
Kinder Morgan Energy Partners LP:
2.65%, 2/01/19		245		242,960
3.95%, 9/01/22		225		220,030
4.15%, 2/01/24		250		242,591
4.25%, 9/01/24		155		150,960
6.50%, 2/01/37		100		103,133
5.00%, 8/15/42		75		65,252
5.40%, 9/01/44		250		227,104
Kinder Morgan, Inc.:
3.05%, 12/01/19		250		249,723
4.30%, 6/01/25		160		154,463
5.30%, 12/01/34		250		232,423
5.55%, 6/01/45		250		231,071
5.05%, 2/15/46		250		216,778
Marathon Oil Corp.:
5.90%, 3/15/18		100		109,819
2.80%, 11/01/22		400		379,150
3.85%, 6/01/25		250		245,022
Corporate Bonds	Par (000)		Value
Oil, Gas & Consumable Fuels (continued)
Marathon Petroleum Corp.:
5.13%, 3/01/21	$	150	$	164,728
3.63%, 9/15/24		115		112,908
4.75%, 9/15/44		250		228,174
Murphy Oil Corp., 4.00%, 6/01/22		100		94,512
Nabors Industries, Inc.:
5.00%, 9/15/20		50		52,055
4.63%, 9/15/21		250		248,368
Nexen, Inc., 6.40%, 5/15/37		100		119,817
Noble Energy, Inc.:
4.15%, 12/15/21		150		156,265
5.25%, 11/15/43		250		243,565
Occidental Petroleum Corp.:
4.10%, 2/01/21		50		54,240
3.50%, 6/15/25		250		249,137
ONEOK Partners LP:
2.00%, 10/01/17		250		250,525
3.38%, 10/01/22		500		459,980
6.13%, 2/01/41		50		48,748
Petrobras Global Finance BV:
3.25%, 3/17/17		500		493,055
3.00%, 1/15/19		500		462,080
6.25%, 3/17/24		250		241,368
5.63%, 5/20/43		450		347,805
7.25%, 3/17/44		125		116,045
6.85%, 6/05/15		250		205,090
Petrobras International Finance Co.:
5.75%, 1/20/20		400		396,336
5.38%, 1/27/21		500		480,900
Petroleos Mexicanos:
3.50%, 7/18/18		350		360,745
3.13%, 1/23/19		250		252,375
4.88%, 1/24/22		400		415,948
3.50%, 1/30/23		400		379,480
4.50%, 1/23/26 (a)		500		488,700
6.50%, 6/02/41		300		312,000
6.38%, 1/23/45		750		769,687
Phillips 66:
4.65%, 11/15/34		355		347,290
5.88%, 5/01/42		100		108,955
Pioneer Natural Resources Co., 3.95%, 7/15/22		150		151,190
Plains All American Pipeline LP/PAA Finance Corp.:
2.85%, 1/31/23		250		234,639
5.15%, 6/01/42		50		48,349
4.70%, 6/15/44		250		228,490
Plains Exploration & Production Co., 6.50%, 11/15/20		162		171,315
Rowan Cos., Inc.:
4.75%, 1/15/24		50		47,781
5.40%, 12/01/42		100		81,501
Shell International Finance BV:
4.38%, 3/25/20		100		109,477
2.13%, 5/11/20		750		748,390
4.13%, 5/11/35		500		489,459
6.38%, 12/15/38		300		377,224
5.50%, 3/25/40		50		56,894
4.55%, 8/12/43		200		204,367

See Notes to Financial Statements.



30	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value
Oil, Gas & Consumable Fuels (concluded)
Southwestern Energy Co., 4.10%, 3/15/22	$	100	$	98,093
Spectra Energy Capital LLC, 3.30%, 3/15/23		150		137,559
Spectra Energy Partners LP:
4.75%, 3/15/24		250		264,208
3.50%, 3/15/25		250		239,417
Statoil ASA:
1.95%, 11/08/18		250		251,321
2.65%, 1/15/24		500		478,484
3.70%, 3/01/24		250		258,390
5.10%, 8/17/40		100		107,811
Suncor Energy, Inc.:
6.10%, 6/01/18		200		223,033
3.60%, 12/01/24		165		164,195
6.50%, 6/15/38		250		304,602
Sunoco Logistics Partners Operations LP:
4.95%, 1/15/43		250		218,987
5.30%, 4/01/44		100		91,049
Talisman Energy, Inc.:
3.75%, 2/01/21		300		296,993
5.50%, 5/15/42		50		45,005
TC PipeLines LP, 4.38%, 3/13/25		250		246,946
Tennessee Gas Pipeline Co. LLC, 7.50%, 4/01/17		100		109,205
Total Capital Canada Ltd., 2.75%, 7/15/23		150		144,827
Total Capital International SA:
1.50%, 2/17/17		100		100,815
2.13%, 1/10/19		350		354,194
2.75%, 6/19/21		250		252,182
Total Capital SA, 2.13%, 8/10/18		500		507,498
TransCanada PipeLines Ltd.:
4.63%, 3/01/34		250		247,876
6.20%, 10/15/37		200		226,946
5.00%, 10/16/43		150		150,586
Valero Energy Corp.:
6.13%, 2/01/20		150		171,319
6.63%, 6/15/37		300		338,823
Weatherford International Ltd.:
6.00%, 3/15/18		150		159,680
9.63%, 3/01/19		250		291,893
5.13%, 9/15/20		50		50,950
5.95%, 4/15/42		350		295,854
The Williams Cos., Inc.:
7.88%, 9/01/21		31		36,390
3.70%, 1/15/23		100		93,111
4.55%, 6/24/24		45		43,609
5.75%, 6/24/44		250		231,993
Williams Partners LP:
4.00%, 11/15/21		250		252,341
4.30%, 3/04/24		250		245,880
3.90%, 1/15/25		250		235,673
4.00%, 9/15/25		250		234,175

				41,759,108
Paper & Forest Products — 0.1%
Celulosa Arauco y Constitucion SA, 4.75%, 1/11/22		50		52,114
Georgia-Pacific LLC, 8.88%, 5/15/31		25		36,065
International Paper Co.:
3.65%, 6/15/24		500		492,804
5.00%, 9/15/35		250		244,920
Corporate Bonds	Par (000)		Value
Paper & Forest Products (concluded)
Westvaco Corp., 8.20%, 1/15/30	$	100	$	134,868

				960,771
Personal Products — 0.0%
Colgate-Palmolive Co.:
1.75%, 3/15/19		250		249,620
3.25%, 3/15/24		250		253,566

				503,186
Pharmaceuticals — 1.0%
Abbott Laboratories, 2.55%, 3/15/22		300		293,099
AbbVie, Inc.:
1.75%, 11/06/17		300		300,786
2.00%, 11/06/18		150		150,066
2.50%, 5/14/20		500		499,899
4.50%, 5/14/35		450		440,236
4.40%, 11/06/42		400		378,473
Actavis Funding SCS:
2.35%, 3/12/18		750		753,959
3.45%, 3/15/22		155		153,532
4.55%, 3/15/35		130		123,600
4.85%, 6/15/44		250		241,199
4.75%, 3/15/45		500		476,027
Actavis, Inc., 3.25%, 10/01/22		150		145,405
Allergan, Inc., 1.35%, 3/15/18		250		244,692
AstraZeneca PLC:
5.90%, 9/15/17		100		109,849
1.95%, 9/18/19		500		497,423
6.45%, 9/15/37		100		127,293
Baxalta, Inc. (a):
2.88%, 6/23/20		500		499,271
4.00%, 6/23/25		100		99,256
Bristol-Myers Squibb Co.:
1.75%, 3/01/19		250		249,324
2.00%, 8/01/22		250		237,538
4.50%, 3/01/44		250		258,795
Eli Lilly & Co.:
1.95%, 3/15/19		250		250,205
2.75%, 6/01/25		45		43,473
3.70%, 3/01/45		250		226,801
GlaxoSmithKline Capital PLC, 2.85%, 5/08/22		150		148,686
GlaxoSmithKline Capital, Inc.:
5.65%, 5/15/18		100		111,609
6.38%, 5/15/38		300		377,609
Johnson & Johnson:
2.45%, 12/05/21		450		454,090
4.38%, 12/05/33		250		264,919
4.50%, 9/01/40		100		106,425
Merck & Co., Inc.:
3.88%, 1/15/21		250		268,021
2.75%, 2/10/25		70		67,125
4.15%, 5/18/43		250		243,007
3.70%, 2/10/45		400		357,347
Merck Sharp & Dohme Corp., 5.00%, 6/30/19		500		556,753
Mylan, Inc., 4.20%, 11/29/23		250		255,167
Novartis Capital Corp.:
4.40%, 4/24/20		100		110,367
3.40%, 5/06/24		650		659,591

See Notes to Financial Statements.



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	31

Schedule of Investments (continued)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value
Pharmaceuticals (concluded)
Perrigo Co. PLC, 2.30%, 11/08/18	$	250	$	250,269
Pfizer, Inc.:
1.10%, 5/15/17		850		852,505
1.50%, 6/15/18		500		500,344
4.30%, 6/15/43		500		488,578
4.40%, 5/15/44		250		246,631
Sanofi, 1.25%, 4/10/18		250		249,081
Teva Pharmaceutical Finance Co. BV:
2.40%, 11/10/16		200		203,217
3.65%, 11/10/21		113		115,169
2.95%, 12/18/22		59		56,995
Zoetis, Inc., 4.70%, 2/01/43		150		143,012

				13,886,718
Real Estate — 0.2%
AvalonBay Communities, Inc.:
2.95%, 9/15/22		100		97,607
3.45%, 6/01/25		100		98,334
Boston Properties LP:
3.70%, 11/15/18		200		210,718
3.13%, 9/01/23		250		243,022
Brandywine Operating Partnership LP, 3.95%, 2/15/23		250		248,025
Duke Realty LP, 3.63%, 4/15/23		250		247,127
Host Hotels & Resorts LP:
5.25%, 3/15/22		250		271,544
Series E, 4.00%, 6/15/25		190		188,588
Liberty Property LP, 4.40%, 2/15/24		250		258,193
Simon Property Group LP:
2.80%, 1/30/17		100		102,354
2.15%, 9/15/17		250		254,455
4.13%, 12/01/21		100		107,408
3.38%, 3/15/22		100		101,500
4.25%, 10/01/44		250		237,406
Ventas Realty LP/Ventas Capital Corp.:
2.70%, 4/01/20		250		249,259
4.25%, 3/01/22		100		103,540

				3,019,080
Real Estate Investment Trusts (REITs) — 0.4%
American Tower Corp.:
3.40%, 2/15/19		250		255,830
2.80%, 6/01/20		250		246,526
5.05%, 9/01/20		25		27,167
4.70%, 3/15/22		100		104,269
3.50%, 1/31/23		150		144,084
DDR Corp., 4.63%, 7/15/22		100		105,003
ERP Operating LP:
4.75%, 7/15/20		100		110,163
4.50%, 7/01/44		150		146,124
Essex Portfolio LP, 3.88%, 5/01/24		100		101,190
HCP, Inc.:
6.00%, 1/30/17		100		106,675
2.63%, 2/01/20		250		247,478
5.38%, 2/01/21		250		275,808
3.15%, 8/01/22		100		96,294
Health Care REIT, Inc.:
4.13%, 4/01/19		200		211,695
5.25%, 1/15/22		50		54,693
4.00%, 6/01/25		250		246,741
Corporate Bonds	Par (000)		Value
Real Estate Investment Trusts (REITs) (concluded)
Healthcare Realty Trust, Inc., 3.75%, 4/15/23	$	150	$	146,564
Hospitality Properties Trust, 5.00%, 8/15/22		200		208,187
Kilroy Realty LP, 6.63%, 6/01/20		250		289,911
Kimco Realty Corp., 3.20%, 5/01/21		250		251,503
Mid-America Apartments LP, 4.30%, 10/15/23		200		207,259
Omega Healthcare Investors, Inc.:
5.88%, 3/15/24		250		265,938
4.50%, 4/01/27 (a)		250		239,808
Prologis LP, 4.50%, 8/15/17		500		530,084
Realty Income Corp., 4.65%, 8/01/23		250		263,200
Simon Property Group LP, 4.75%, 3/15/42		100		102,828
Weyerhaeuser Co., 7.38%, 3/15/32		350		437,665

				5,422,687
Road & Rail — 0.3%
Burlington Northern Santa Fe LLC:
4.70%, 10/01/19		750		826,691
3.75%, 4/01/24		50		50,960
5.40%, 6/01/41		50		55,102
4.40%, 3/15/42		150		144,105
4.45%, 3/15/43		200		193,994
4.90%, 4/01/44		250		258,830
4.55%, 9/01/44		250		246,080
Canadian National Railway Co.:
1.45%, 12/15/16		50		50,279
2.95%, 11/21/24		305		298,824
3.50%, 11/15/42		100		86,716
Canadian Pacific Railway Ltd.:
2.90%, 2/01/25		250		235,325
5.75%, 1/15/42		25		28,900
CSX Corp.:
3.70%, 10/30/20		100		105,522
4.75%, 5/30/42		100		100,094
3.95%, 5/01/50		200		175,035
4.50%, 8/01/54		250		234,584
Norfolk Southern Corp.:
7.70%, 5/15/17		150		166,738
3.00%, 4/01/22		250		248,687
3.85%, 1/15/24		250		256,943
3.95%, 10/01/42		100		90,053
4.45%, 6/15/45		250		239,864
Union Pacific Corp.:
4.16%, 7/15/22		100		107,393
3.25%, 8/15/25		250		247,401
4.30%, 6/15/42		50		49,266
4.75%, 12/15/43		250		261,780

				4,759,166
Semiconductors & Semiconductor Equipment — 0.2%
Applied Materials, Inc., 5.85%, 6/15/41		50		56,984
Intel Corp.:
1.35%, 12/15/17		300		299,893
4.80%, 10/01/41		300		300,942
KLA-Tencor Corp., 4.65%, 11/01/24		305		304,833
Maxim Integrated Products, Inc., 3.38%, 3/15/23		100		97,763

See Notes to Financial Statements.



32	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value
Semiconductors & Semiconductor Equipment (concluded)
QUALCOMM, Inc.:
3.45%, 5/20/25	$	750	$	730,861
4.65%, 5/20/35		250		242,001
Seagate HDD Cayman:
3.75%, 11/15/18		125		130,317
4.75%, 6/01/23		250		253,917
Texas Instruments, Inc., 1.75%, 5/01/20		250		245,650
Xilinx, Inc., 3.00%, 3/15/21		75		76,271

				2,739,432
Software — 0.4%
Autodesk, Inc., 1.95%, 12/15/17		75		75,322
CA, Inc., 4.50%, 8/15/23		170		177,064
Microsoft Corp.:
1.63%, 12/06/18		250		252,154
1.85%, 2/12/20		500		500,288
3.00%, 10/01/20		50		52,089
3.50%, 2/12/35		165		150,842
5.30%, 2/08/41		100		112,847
3.75%, 5/01/43		150		135,029
4.00%, 2/12/55		500		448,590
Oracle Corp.:
1.20%, 10/15/17		750		750,001
5.75%, 4/15/18		150		166,887
2.25%, 10/08/19		500		502,896
3.88%, 7/15/20		100		107,429
3.25%, 5/15/30		250		229,892
4.30%, 7/08/34		250		246,536
3.90%, 5/15/35		500		464,996
5.38%, 7/15/40		150		165,902
4.50%, 7/08/44		250		247,861
Symantec Corp., 2.75%, 6/15/17		150		151,854

				4,938,479
Specialty Retail — 0.3%
Advance Auto Parts, Inc., 4.50%, 12/01/23		250		258,072
AutoZone, Inc.:
3.70%, 4/15/22		50		51,266
3.13%, 7/15/23		250		242,440
3.25%, 4/15/25		165		159,328
Bed Bath & Beyond, Inc., 5.17%, 8/01/44		250		248,189
The Home Depot, Inc.:
2.00%, 6/15/19		350		350,756
4.40%, 4/01/21		150		165,467
5.88%, 12/16/36		100		120,362
4.20%, 4/01/43		250		240,338
4.40%, 3/15/45		250		249,640
Lowe’s Cos., Inc.:
1.63%, 4/15/17		200		202,160
4.63%, 4/15/20		100		109,469
3.12%, 4/15/22		100		101,187
5.00%, 9/15/43		150		161,836
4.25%, 9/15/44		250		241,724
Macy’s Retail Holdings, Inc.:
5.90%, 12/01/16		11		11,720
3.88%, 1/15/22		300		311,066
4.38%, 9/01/23		200		210,909
3.63%, 6/01/24		250		249,306
QVC, Inc., 5.45%, 8/15/34		200		181,489
Staples, Inc., 2.75%, 1/12/18		150		151,340
Corporate Bonds	Par (000)		Value
Specialty Retail (concluded)
The Home Depot, Inc., 2.63%, 6/01/22		250		245,878

				4,263,942
Technology Hardware, Storage & Peripherals — 0.3%
Adobe Systems, Inc., 3.25%, 2/01/25		70		67,581
Apple, Inc.:
1.05%, 5/05/17		500		501,496
1.00%, 5/03/18		500		494,945
2.50%, 2/09/25		140		131,278
3.20%, 5/13/25		750		746,122
3.85%, 5/04/43		250		227,545
4.45%, 5/06/44		250		249,647
3.45%, 2/09/45		350		296,633
EMC Corp.:
1.88%, 6/01/18		250		250,485
2.65%, 6/01/20		250		252,564
Hewlett-Packard Co.:
3.30%, 12/09/16		150		153,971
2.75%, 1/14/19		500		505,425
4.65%, 12/09/21		100		106,142
6.00%, 9/15/41		150		148,356
NetApp, Inc.:
2.00%, 12/15/17		350		351,751
3.38%, 6/15/21		105		103,459

				4,587,400
Textiles, Apparel & Luxury Goods — 0.0%
VF Corp., 3.50%, 9/01/21		100		105,787
Tobacco — 0.3%
Altria Group, Inc.:
9.25%, 8/06/19		45		56,487
2.63%, 1/14/20		250		249,028
2.85%, 8/09/22		250		240,303
10.20%, 2/06/39		33		54,342
4.50%, 5/02/43		400		370,471
5.38%, 1/31/44		70		74,039
Lorillard Tobacco Co., 6.88%, 5/01/20		250		290,940
Philip Morris International, Inc.:
1.13%, 8/21/17		250		249,556
1.88%, 1/15/19		250		249,603
4.13%, 5/17/21		50		53,948
2.63%, 3/06/23		250		239,278
3.25%, 11/10/24		125		123,049
4.50%, 3/20/42		50		48,719
3.88%, 8/21/42		100		88,777
4.13%, 3/04/43		200		184,519
Reynolds American, Inc.:
3.25%, 6/12/20		250		253,226
5.70%, 8/15/35		75		77,765
4.75%, 11/01/42		150		136,077
6.15%, 9/15/43		150		161,090
5.85%, 8/15/45		250		262,224

				3,463,441
Trading Companies & Distributors — 0.0%
GATX Corp.:
1.25%, 3/04/17		500		498,525
2.38%, 7/30/18		150		150,570

				649,095

See Notes to Financial Statements.



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	33

Schedule of Investments (continued)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value
Transportation Infrastructure — 0.0%
Ryder System, Inc.:
2.50%, 3/01/17	$	150	$	152,710
2.35%, 2/26/19		500		499,009

				651,719
Water Utilities — 0.0%
American Water Capital Corp., 3.40%, 3/01/25		250		249,351
United Utilities PLC, 5.38%, 2/01/19		50		53,849

				303,200
Wireless Telecommunication Services — 0.2%
America Movil SAB de CV:
2.38%, 9/08/16		500		506,310
5.00%, 3/30/20		200		221,390
4.38%, 7/16/42		350		325,031
Rogers Communications, Inc.:
3.00%, 3/15/23		150		144,079
5.00%, 3/15/44		250		247,223
Vodafone Group PLC:
1.63%, 3/20/17		250		248,996
7.88%, 2/15/30		100		124,069
4.38%, 2/19/43		450		387,429

				2,204,527
Total Corporate Bonds — 25.4%				353,332,739



Foreign Agency Obligations
Asian Development Bank:
0.75%, 7/28/17		750		749,084
1.50%, 9/28/18		1,000		1,008,180
Brazilian Government International Bond:
8.00%, 1/15/18		83		90,292
5.88%, 1/15/19		250		277,500
4.88%, 1/22/21		650		679,250
2.63%, 1/05/23		250		221,875
4.25%, 1/07/25		750		724,125
5.63%, 1/07/41		300		286,500
5.00%, 1/27/45		250		216,250
Canada Government International Bond, 1.63%, 2/27/19		500		504,549
Colombia Government International Bond:
4.38%, 7/12/21		250		261,500
2.63%, 3/15/23		250		229,000
4.00%, 2/26/24		750		746,250
7.38%, 9/18/37		100		123,250
5.63%, 2/26/44		200		202,500
5.00%, 6/15/45		250		231,250
Corporacion Andina de Fomento, 1.50%, 8/08/17		143		143,766
Council of Europe Development Bank:
1.00%, 3/07/18		250		249,278
1.63%, 3/10/20		250		248,695
European Bank for Reconstruction & Development, 1.00%, 2/16/17		250		251,647
European Investment Bank:
0.50%, 8/15/16		1,250		1,250,167
5.13%, 9/13/16		225		237,218
1.25%, 10/14/16		100		100,874
Foreign Agency Obligations	Par (000)		Value
European Investment Bank (concluded):
1.75%, 3/15/17		500		508,661
0.88%, 4/18/17		1,500		1,503,615
1.63%, 6/15/17		500		507,835
1.00%, 8/17/17		1,500		1,504,579
1.00%, 3/15/18		250		249,471
1.00%, 6/15/18		250		248,687
1.13%, 8/15/18		1,000		996,907
1.88%, 3/15/19		500		507,717
1.75%, 6/17/19		500		503,987
1.38%, 6/15/20		1,000		978,652
Export Development Canada, 1.75%, 8/19/19		500		503,638
Inter-American Development Bank:
1.38%, 10/18/16		250		252,640
1.25%, 1/16/18		1,000		1,007,318
0.88%, 3/15/18		1,000		996,235
1.75%, 10/15/19		500		503,693
1.75%, 4/14/22		750		731,812
International Bank for Reconstruction & Development:
1.00%, 9/15/16		75		75,464
Series GDIF, 0.63%, 10/14/16		1,250		1,251,361
Series GDIF, 1.00%, 11/15/17		500		500,417
Series GDIF, 1.38%, 4/10/18		1,000		1,010,539
Series GDIF, 1.00%, 6/15/18		1,500		1,498,002
International Finance Corp.:
0.63%, 10/03/16		1,000		1,000,798
1.75%, 9/16/19		500		501,264
Israel Government International Bond, 4.50%, 1/30/43		200		196,000
Italian Government International Bond:
6.88%, 9/27/23		100		123,997
5.38%, 6/15/33		250		279,326
Japan Bank for International Cooperation, 2.13%, 2/07/19		200		203,801
KFW:
1.25%, 2/15/17		750		756,872
0.75%, 3/17/17		1,500		1,501,105
2.75%, 10/01/20		500		521,809
Mexico Government International Bond:
5.63%, 1/15/17		500		532,750
8.13%, 12/30/19		100		129,000
5.13%, 1/15/20		100		110,250
3.63%, 3/15/22		500		506,000
3.60%, 1/30/25		500		493,000
6.75%, 9/27/34		150		188,250
6.05%, 1/11/40		300		340,500
4.75%, 3/08/44		450		427,500
5.55%, 1/21/45		775		824,406
Nordic Investment Bank, 1.13%, 3/19/18		500		499,853
Panama Government International Bond:
5.20%, 1/30/20		350		385,700
3.75%, 3/16/25		500		492,500
6.70%, 1/26/36		350		432,250
Peruvian Government International Bond:
7.35%, 7/21/25		400		522,000
8.75%, 11/21/33		191		288,410
5.63%, 11/18/50		150		167,250

See Notes to Financial Statements.



34	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


Foreign Agency Obligations	Par (000)		Value
Philippine Government International Bond:
4.00%, 1/15/21	$	500	$	540,650
4.20%, 1/21/24		500		545,000
7.75%, 1/14/31		500		721,250
3.95%, 1/20/40		250		252,500
Poland Government International Bond:
6.38%, 7/15/19		250		288,875
3.00%, 3/17/23		200		196,360
4.00%, 1/22/24		250		261,563
Province of Ontario Canada:
1.20%, 2/14/18		750		750,031
2.00%, 9/27/18		500		508,977
2.00%, 1/30/19		500		507,794
4.40%, 4/14/20		200		222,400
Province of Quebec Canada, 2.63%, 2/13/23		250		251,440
Republic of Korea, 4.13%, 6/10/44		250		274,300
South Africa Government International Bond:
4.67%, 1/17/24		200		204,500
5.38%, 7/24/44		200		199,454
Svensk Exportkredit AB:
2.13%, 7/13/16		200		203,298
1.88%, 6/17/19		500		506,009
Turkey Government International Bond:
7.50%, 11/07/19		500		576,500
5.63%, 3/30/21		500		538,950
3.25%, 3/23/23		750		697,500
5.75%, 3/22/24		700		757,750
6.88%, 3/17/36		250		290,000
6.00%, 1/14/41		500		526,750
6.63%, 2/17/45		250		286,875
Uruguay Government International Bond:
8.00%, 11/18/22		150		192,750
4.50%, 8/14/24		250		262,500
5.10%, 6/18/50		250		238,125
Total Foreign Agency Obligations — 3.4%				47,100,922



Municipal Bonds
American Municipal Power, Inc., RB, Build America Bonds, Combined Hydroelectric Projects, Series B, 7.83%, 2/15/41		150		207,445
Bay Area Toll Authority, RB, Build America Bonds, San Francisco Toll Bridge:
Series S-1, 6.92%, 4/01/40		100		128,677
Series S-1, 7.04%, 4/01/50		100		134,992
Series S-3, 6.91%, 10/01/50		200		267,130
Chicago Transit Authority, RB, Series A, 6.90%, 12/01/40		100		113,658
City & County of Denver Colorado School District No. 1, COP, Refunding, Series B, 4.24%, 12/15/37		50		48,620
City & County of San Francisco California Public Utilities Commission Water Revenue, RB, Build America Bonds, Sub-Series G, 6.95%, 11/01/50		100		134,408
City of New York New York, GO, 5.97%, 3/01/36		100		120,990
Municipal Bonds	Par (000)		Value
City of New York New York Transitional Finance Authority, RB, Build America Bonds, Future Tax Secured, Sub-Series B-1, 5.57%, 11/01/38	$	100	$	119,474
City Public Service Board of San Antonio Texas, RB, 4.43%, 2/01/42		100		103,199
Commonwealth of Massachusetts, GO, Build America Bonds, 5.46%, 12/01/39		100		119,159
Commonwealth of Pennsylvania, GO, Build America Bonds, 4.65%, 2/15/26		100		107,955
County of Sonoma California, Refunding RB, Series A, 6.00%, 12/01/29		100		116,163
Dallas Area Rapid Transit, RB, Build America Bonds, Senior Lien, Series B, 5.02%, 12/01/48		160		178,658
District of Columbia, RB, Series E, 5.59%, 12/01/34		200		235,896
East Bay Municipal Utility District, RB, Build America Bonds, 5.87%, 6/01/40		100		122,380
Florida Hurricane Catastrophe Fund Finance Corp., RB, Series A, 3.00%, 7/01/20		100		101,653
Illinois State Toll Highway Authority, RB, Build America Bonds, 5.85%, 12/01/34		100		119,102
JobsOhio Beverage System, Refunding RB, Series B, 4.53%, 1/01/35		100		103,966
Los Angeles Community College District, GO, 6.75%, 8/01/49		100		138,362
Los Angeles County Metropolitan Transportation Authority, RB, Build America Bonds, 5.74%, 6/01/39		100		119,400
Los Angeles Department of Water & Power, RB, Build America Bonds:
5.72%, 7/01/39		100		117,851
6.60%, 7/01/50		90		120,866
Los Angeles Unified School District, GO, 6.76%, 7/01/34		150		194,926
Massachusetts Institute of Technology, 4.68%, 7/01/14		300		301,567
Massachusetts School Building Authority, RB, 5.72%, 8/15/39		100		118,616
Metropolitan Transportation Authority, RB, Build America Bonds, Series C-1, 6.69%, 11/15/40		305		394,045
Metropolitan Water Reclamation District of Greater Chicago, GO, Build America Bonds, 5.72%, 12/01/38		150		174,438
Municipal Electric Authority of Georgia Plant Vogtle Units 3 & 4, Refunding RB, Build America Bonds, Series A, 6.64%, 4/01/57		125		149,896
New Jersey EDA, RB, Series A (NPFGC), 7.43%, 2/15/29		200		226,850
New Jersey State Turnpike Authority, RB, Build America Bonds, Series F, 7.41%, 1/01/40		400		555,484
New York City Transitional Finance Authority Future Tax Secured Revenue, RB, Future Tax Secured, Build America Bonds, 5.77%, 8/01/36		100		119,985

See Notes to Financial Statements.



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	35

Schedule of Investments (continued)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


Municipal Bonds	Par (000)		Value
New York City Water & Sewer System, RB, Build America Bonds, 2nd General Resolution, Fiscal 2020, Series DD, 5.95%, 6/15/42	$	115	$	144,089
New York State Dormitory Authority, RB, Build America Bonds, Series H, 5.43%, 3/15/39		135		155,439
New York State Urban Development Corp., RB, 5.77%, 3/15/39		200		236,914
North Texas Tollway Authority, RB, Build America Bonds, Series B, 6.72%, 1/01/49		100		134,317
Ohio State University, RB, Build America Bonds, Series C, 4.91%, 6/01/40		100		110,467
Ohio State Water Development Authority, RB, Build America Bonds, Series B-2, 4.88%, 12/01/34		100		111,436
Port Authority of New York & New Jersey, RB:
158th Series, 5.86%, 12/01/24		100		120,391
159th Series, 6.04%, 12/01/29		200		244,866
182nd Series, 5.31%, 8/01/46		100		105,516
Port Authority of New York & New Jersey, Refunding RB, 174th Series, 4.46%, 10/01/62		100		95,729
San Diego County Water Authority, RB, Build America Bonds, Series B, 6.14%, 5/01/49		100		124,924
Santa Clara Valley Transportation Authority, RB, Build America Bonds, Series A, 5.88%, 4/01/32		100		119,029
State of California, GO, Build America Bonds, Various Purpose:
7.50%, 4/01/34		145		200,829
7.55%, 4/01/39		675		976,003
7.35%, 11/01/39		100		139,382
7.60%, 11/01/40		200		296,342
State of Connecticut, GO, Build America Bonds, Series D, 5.09%, 10/01/30		150		165,756
State of Illinois, GO:
5.67%, 3/01/18		200		213,620
Pension, 5.10%, 6/01/33		900		835,335
State of Oregon, GO, Pension, 5.76%, 6/01/23		100		115,815
State of Texas, GO, Build America Bonds, Series A, 5.52%, 4/01/39		100		123,047
State of Washington, GO, Build America Bonds, Series D, 5.48%, 8/01/39		175		207,632
Texas Transportation Commission, RB, 1st Tier, Build America Bonds, Series B, 5.18%, 4/01/30		200		229,482
University of California, RB, Series AD, 4.86%, 5/15/12		300		271,044
University of California, Refunding RB, Series AJ, 4.60%, 5/15/31		150		157,357
University of California Medical Center, RB, Build America Bonds, Series H, 6.55%, 5/15/48		50		62,210
University of North Carolina at Chapel Hill, Refunding RB, 3.85%, 12/01/34		400		396,732
University of Virginia, RB, Build America Bonds, 6.20%, 9/01/39		140		186,635
Municipal Bonds	Par (000)		Value
Virginia Commonwealth Transportation Board, RB, Build America Bonds, Series A-2, 5.35%, 5/15/35	$	75	$	84,899
Total Municipal Bonds — 0.8%				11,681,048



Non-Agency Mortgage-Backed Securities
Commercial Mortgage-Backed Securities — 1.5%
Banc of America Commercial Mortgage Trust, Series 2007-5, Class A4, 5.49%, 2/10/51		341		360,360
Bear Stearns Commercial Mortgage Securities Trust:
Series 2006-PW14, Class A4, 5.20%, 12/11/38		1,350		1,408,159
Series 2007-PW16, Class AM, 5.90%, 6/11/40 (e)		700		749,650
Series 2007-T26, Class A4, 5.47%, 1/12/45 (e)		1,252		1,321,275
Citigroup Commercial Mortgage Trust, Class A4:
Series 2013-GC17, 4.13%, 11/10/46		750		801,607
Series 2014-GC25, 3.64%, 10/10/47		500		512,821
Citigroup/Deutsche Bank Commercial Mortgage Trust, Series 2007-CD4, Class A4, 5.32%, 12/11/49		600		625,165
Commercial Mortgage Trust:
Series 2013-CR09, Class A4, 4.23%, 7/10/45 (e)		700		760,945
Series 2013-CR12, Class A4, 4.05%, 10/10/46		300		320,586
Series 2014-UBS2, Class A5, 3.96%, 3/10/47		500		527,997
Credit Suisse Commercial Mortgage Trust Series:
Series 2006-C4, Class A3, 5.47%, 9/15/39		813		840,097
Series 2007-C3, Class A4, 5.89%, 6/15/39 (e)		220		232,241
Greenwich Capital Commercial Funding Corp., Series 2007-GG11, Class A4, 5.74%, 12/10/49		350		371,446
GS Mortgage Securities Corp. II:
Series 2012-GCJ9, Class A3, 2.77%, 11/10/45		250		248,060
Series 2015-GC30, Class A4, 3.38%, 5/10/50		600		599,083
GS Mortgage Securities Trust, Series 2007-GG10, Class A4, 5.99%, 8/10/45 (e)		269		287,446
JPMBB Commercial Mortgage Securities Trust:
Series 2014-C18, Class A5, 4.08%, 2/15/47		250		265,865
Series 2014-C22, Class A4, 3.80%, 9/15/47		300		310,902

See Notes to Financial Statements.



36	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


Non-Agency Mortgage-Backed Securities	Par (000)		Value
Commercial Mortgage-Backed Securities (concluded)
JPMorgan Chase Commercial Mortgage Securities Trust:
Series 2006-LDP9, Class A3, 5.34%, 5/15/47	$	863	$	900,716
Series 2011-C5, Class A3, 4.17%, 8/15/46		650		705,266
Series 2012-LC9, Class A3, 2.48%, 12/15/47		300		300,260
Series 2013-C16, Class A2, 3.07%, 12/15/46		850		881,939
Series 2014-C19, Class A2, 3.05%, 4/15/47		300		310,622
Series 2014-C20, Class A5, 3.80%, 7/15/47		1,400		1,455,595
LB-UBS Commercial Mortgage Trust, Series 2007-C7, Class A3, 5.87%, 9/15/45 (e)		262		283,194
ML-CFC Commercial Mortgage Trust:
Series 2006-4, Class A3, 5.17%, 12/12/49		448		465,537
Series 2007-9, Class AM, 5.86%, 9/12/49 (e)		675		730,972
Morgan Stanley Capital I Trust, Series 2007-IQ14, Class A4, 5.69%, 4/15/49 (e)		1,500		1,586,316
Wells Fargo Commercial Mortgage Trust:
Series 2013-LC12, Class A4, 4.22%, 7/15/46 (e)		200		216,913
Series 2015-C27, Class A5, 3.45%, 2/15/48		1,500		1,509,765
WFRBS Commercial Mortgage Trust, Series 2013-C11, Class A5, 3.07%, 3/15/45		500		502,186
Total Non-Agency Mortgage-Backed Securities — 1.5%				20,392,986



U.S. Government Sponsored Agency Securities
Agency Obligations — 2.4%
Fannie Mae:
0.88%, 12/20/17 - 5/21/18		4,828		4,811,865
1.13%, 4/27/17		2,310		2,327,542
1.63%, 1/21/20		500		499,307
6.25%, 5/15/29		2,850		3,893,194
6.63%, 11/15/30		149		210,569
7.25%, 5/15/30		550		820,186
Federal Home Loan Bank:
0.63%, 12/28/16		5,000		5,005,935
5.50%, 7/15/36		100		129,374
Federal Home Loan Mortgage Corp., 0.75%, 1/12/18		2,000		1,990,040
Financing Corp., 8.60%, 9/26/19		200		255,755
Freddie Mac:
0.88%, 3/07/18		1,500		1,494,788
1.75%, 5/30/19		420		424,570
2.00%, 8/25/16		750		763,292
2.38%, 1/13/22		7,430		7,522,652
4.88%, 6/13/18		250		277,658
6.25%, 7/15/32		1,300		1,806,518
U.S. Government Sponsored Agency Securities	Par (000)		Value
Agency Obligations (concluded)
Tennessee Valley Authority:
3.50%, 12/15/42	$	140	$	130,760
6.25%, 12/15/17		400		450,907

				32,814,912
Commercial Mortgage-Backed Securities — 0.4%
Fannie Mae, Class A2 (e):
Series 2014-M6, 2.68%, 5/25/21		150		152,912
Series 2014-M13, 3.02%, 8/25/24		500		503,192
Freddie Mac:
Series K713, Class A2, 2.31%, 3/25/20		300		305,227
Series K026, Class A2, 2.51%, 11/25/22		200		199,281
Series K038, Class A1, 2.60%, 10/25/23		237		243,456
Series K014, Class A1, 2.79%, 10/25/20		132		136,995
Series K017, Class A2, 2.87%, 12/25/21		500		514,136
Series K033, Class A2, 3.06%, 7/25/23 (e)		100		102,509
Series K031, Class A2, 3.30%, 4/25/23 (e)		100		104,421
Series K006, Class A1, 3.40%, 7/25/19		427		446,279
Series K004, Class A1, 3.41%, 5/25/19		475		496,805
Series K037, Class A2, 3.49%, 1/25/24		200		210,353
Series K034, Class A2, 3.53%, 7/25/23 (e)		1,400		1,480,636
Series K003, Class A5, 5.09%, 3/25/19		300		335,096
Freddie Mac Mortgage-Backed Securities, Series K013, Class A2, 3.97%, 1/25/21 (e)		500		544,442

				5,775,740
Mortgage-Backed Securities — 28.6%
Fannie Mae Mortgage-Backed Securities:
1.90%, 4/01/43 (e)		362		373,879
1.93%, 5/01/43 (e)		853		880,174
2.06%, 6/01/43 (e)		817		828,723
2.49%, 8/01/42 (e)		305		315,155
2.50%, 9/01/28 - 7/01/45 (g)		17,527		17,649,063
2.80%, 8/01/41 (e)		97		103,023
3.00%, 1/01/27 - 7/01/45 (g)		48,992		49,514,150
3.15%, 11/01/40 (e)		50		52,890
3.50%, 2/01/26 - 7/01/45 (g)		41,816		43,310,026
4.00%, 10/01/25 - 7/01/45 (g)		38,924		41,286,494
4.50%, 5/01/24 - 7/01/45 (g)		18,086		19,496,652
5.00%, 1/01/19 - 7/01/45 (g)		15,929		17,554,653
5.50%, 3/01/34 - 7/01/45 (g)		7,247		8,138,489
6.00%, 3/01/34 - 7/01/45 (g)		8,054		9,158,944
6.50%, 7/01/32		214		248,678
7.00%, 2/01/32		41		46,329
Freddie Mac Mortgage-Backed Securities:
1.76%, 6/01/43 (e)		209		213,987
2.50%, 7/01/28 - 7/01/30 (g)		5,752		5,825,609

See Notes to Financial Statements.



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	37

Schedule of Investments (continued)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


U.S. Government Sponsored Agency Securities	Par (000)		Value
Mortgage-Backed Securities (concluded)
Freddie Mac Mortgage-Backed Securities (concluded):
2.54%, 9/01/40 (e)	$	72	$	76,645
3.00%, 3/01/27 - 7/01/45 (g)		19,111		19,278,814
3.15%, 8/01/41 (e)		57		61,175
3.50%, 7/01/30 - 7/01/45 (g)		26,197		27,063,352
4.00%, 5/01/19 - 7/01/45 (g)		19,607		20,718,300
4.50%, 4/01/18 - 7/01/45 (g)		11,019		11,891,903
5.00%, 10/01/18 - 7/01/45 (g)		2,260		2,493,989
5.50%, 6/01/35 - 7/01/45 (g)		3,507		3,932,007
6.50%, 6/01/31		97		111,581
8.00%, 12/01/24		207		231,487
Ginnie Mae Mortgage-Backed Securities:
3.00%, 5/15/43 - 7/01/45 (g)		20,426		20,628,442
3.50%, 9/20/42 - 7/01/45 (g)		31,649		32,866,563
4.00%, 3/15/41 - 7/01/45 (g)		19,654		20,846,717
4.50%, 7/15/39 - 7/01/45 (g)		13,872		15,016,675
5.00%, 11/15/39 - 7/01/45 (g)		6,263		6,940,061
5.50%, 12/15/32 - 7/20/40		716		809,549
6.00%, 3/15/35 - 10/20/38		451		520,552
6.50%, 9/15/36		197		224,367
7.50%, 12/15/23		210		243,944

				398,953,041
Total U.S. Government Sponsored Agency Securities — 31.4%				437,543,693



U.S. Treasury Obligations
U.S. Treasury Bonds:
8.75%, 5/15/17		2,100		2,417,953
8.75%, 8/15/20		400		539,500
6.25%, 8/15/23		50		65,262
7.63%, 2/15/25		375		549,375
6.50%, 11/15/26		400		562,625
6.13%, 11/15/27		2,080		2,884,862
6.13%, 8/15/29		2,500		3,537,500
5.38%, 2/15/31		1,500		2,016,446
4.50%, 2/15/36		4,216		5,300,962
4.75%, 2/15/37		1,000		1,295,703
4.38%, 2/15/38		2,500		3,074,220
4.50%, 5/15/38		1,000		1,250,156
3.50%, 2/15/39		1,300		1,401,360
4.25%, 5/15/39		2,775		3,348,645
4.50%, 8/15/39		1,700		2,127,790
4.38%, 11/15/39		1,800		2,214,000
4.63%, 2/15/40		1,230		1,568,538
4.38%, 5/15/40		1,650		2,031,691
3.88%, 8/15/40		860		982,147
4.25%, 11/15/40		1,428		1,728,103
4.75%, 2/15/41		200		260,516
4.38%, 5/15/41		610		753,922
3.75%, 8/15/41		1,550		1,740,481
3.13%, 11/15/41		400		402,719
3.13%, 2/15/42		4,850		4,875,763
3.00%, 5/15/42		480		470,288
2.75%, 8/15/42		750		697,793
2.75%, 11/15/42		4,200		3,907,310
3.13%, 2/15/43		3,050		3,054,288
2.88%, 5/15/43		250		238,242
U.S. Treasury Obligations	Par (000)		Value
U.S. Treasury Bonds (concluded):
3.63%, 8/15/43	$	2,500	$	2,750,390
3.75%, 11/15/43		1,700		1,912,235
3.63%, 2/15/44		1,000		1,099,453
3.38%, 5/15/44		1,600		1,680,626
3.00%, 11/15/44		4,500		4,401,913
2.50%, 2/15/45		4,500		3,960,360
3.00%, 5/15/45		3,500		3,430,000
U.S. Treasury Notes:
0.63%, 8/15/16		5,500		5,515,466
0.63%, 10/15/16		7,000		7,018,592
4.63%, 11/15/16		250		264,277
0.50%, 11/30/16		5,000		5,003,125
2.75%, 11/30/16		5,135		5,299,880
0.63%, 12/15/16		4,000		4,008,124
0.88%, 12/31/16		9,750		9,807,125
3.25%, 12/31/16		4,500		4,685,976
0.88%, 1/31/17		7,600		7,642,157
0.63%, 2/15/17		15,200		15,220,186
4.63%, 2/15/17		3,650		3,891,243
0.88%, 2/28/17		2,950		2,965,903
1.00%, 3/31/17		5,000		5,038,280
0.88%, 4/15/17		4,000		4,021,248
0.63%, 5/31/17		16,500		16,497,426
2.75%, 5/31/17		5,000		5,203,515
0.75%, 6/30/17		1,510		1,512,949
2.50%, 6/30/17		3,280		3,401,206
0.88%, 7/15/17		4,000		4,016,564
0.50%, 7/31/17		900		896,836
4.75%, 8/15/17		3,800		4,125,671
0.63%, 8/31/17		5,521		5,511,509
1.88%, 8/31/17		1,870		1,916,896
1.00%, 9/15/17		9,000		9,052,029
1.88%, 10/31/17		5,000		5,126,955
0.88%, 11/15/17		14,000		14,026,250
2.25%, 11/30/17		7,000		7,243,908
1.00%, 12/15/17		8,344		8,379,854
2.63%, 1/31/18		2,000		2,090,156
1.00%, 2/15/18		4,500		4,513,360
0.75%, 2/28/18		4,500		4,482,072
2.75%, 2/28/18		1,300		1,363,375
1.00%, 3/15/18		5,000		5,011,720
0.75%, 4/15/18		9,000		8,952,894
0.63%, 4/30/18		1,500		1,486,524
2.63%, 4/30/18		5,000		5,234,765
1.00%, 5/15/18		7,000		7,007,658
4.00%, 8/15/18		500		546,172
1.38%, 9/30/18		2,400		2,419,874
1.25%, 10/31/18		700		702,407
1.75%, 10/31/18		2,250		2,295,176
1.38%, 12/31/18		4,030		4,052,983
1.50%, 12/31/18		4,815		4,862,399
1.25%, 1/31/19		6,400		6,401,997
1.63%, 3/31/19		1,500		1,517,930
1.25%, 4/30/19		4,300		4,290,256
1.13%, 5/31/19		1,880		1,864,725
1.00%, 6/30/19		2,000		1,971,406
1.63%, 6/30/19		2,000		2,018,906
0.88%, 7/31/19		1,500		1,468,946
1.00%, 8/31/19		2,300		2,260,109
1.63%, 8/31/19		2,000		2,016,094

See Notes to Financial Statements.



38	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

U.S. Total Bond Index Master Portfolio

(Percentages shown are based on Net Assets)


U.S. Treasury Obligations	Par (000)		Value
U.S. Treasury Notes (concluded)
3.38%, 11/15/19	$	3,100	$	3,346,788
1.50%, 11/30/19		6,500		6,501,014
1.13%, 12/31/19		4,750		4,666,504
1.63%, 12/31/19		12,500		12,551,762
1.38%, 1/31/20		750		744,141
3.63%, 2/15/20		2,500		2,730,272
1.25%, 2/29/20		6,200		6,108,451
1.38%, 2/29/20		5,700		5,650,570
1.13%, 3/31/20		1,500		1,467,422
1.13%, 4/30/20		2,700		2,637,984
1.38%, 4/30/20		6,200		6,132,184
1.38%, 5/31/20		4,400		4,347,750
1.63%, 6/30/20		3,500		3,499,727
2.00%, 7/31/20		3,500		3,558,789
2.63%, 8/15/20		750		784,277
2.13%, 8/31/20		4,000		4,085,312
1.75%, 10/31/20		500		500,235
2.00%, 11/30/20		8,300		8,403,750
2.38%, 12/31/20		1,500		1,546,289
2.13%, 1/31/21		2,800		2,846,374
3.63%, 2/15/21		2,310		2,534,322
2.00%, 2/28/21		7,700		7,768,576
2.25%, 3/31/21		7,500		7,661,715
2.00%, 8/31/21		4,500		4,514,764
2.13%, 9/30/21		4,900		4,949,000
2.00%, 11/15/21		3,700		3,706,649
1.88%, 11/30/21		11,000		10,928,676
2.13%, 12/31/21		7,000		7,054,684
1.50%, 1/31/22		6,000		5,808,750
2.00%, 2/15/22		1,500		1,499,766
1.75%, 3/31/22		9,100		8,935,062
1.75%, 4/30/22		4,000		3,925,000
2.13%, 6/30/22		4,500		4,518,985
1.63%, 11/15/22		1,000		966,641
1.75%, 5/15/23		1,000		967,266
2.75%, 11/15/23		2,500		2,598,828
2.50%, 5/15/24		2,300		2,339,351
2.38%, 8/15/24		7,500		7,540,432
2.25%, 11/15/24		8,980		8,925,276
2.00%, 2/15/25		6,500		6,315,153
2.13%, 5/15/25		3,100		3,043,812
Total U.S. Treasury Obligations — 36.6%				509,270,494

Preferred Securities	Par (000)		Value
Capital Trust
Insurance — 0.0%
The Chubb Corp., 6.00%, 5/11/37	$	50	$	61,763
Total Preferred Securities — 0.0%				61,763
Total Long-Term Investments (Cost — $1,385,977,219) — 99.6%				1,385,965,460



Short-Term Securities	Shares
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17%, (b)(h)		262,404,011		262,404,011
BlackRock Cash Funds: Prime, SL Agency Shares, 0.13%, (b)(h)(i)		78,000		78,000
Total Short-Term Securities (Cost — $262,482,011) — 18.8%				262,482,011
Total Investments Before TBA Sale Commitments (Cost — $1,648,459,230) — 118.4%				1,648,447,471



TBA Sale Commitments (g)	Par (000)
Fannie Mae Mortgage-Backed Securities:
3.00%, 7/16/30-7/14/45		500		(507,929	)
3.50%, 7/14/45		800		(824,250	)
4.00%, 7/16/30-7/14/45		1,202		(1,270,259	)
4.50%, 7/16/30-7/14/45		750		(800,547	)
5.00%, 7/14/45		500		(552,344	)
Ginnie Mae Mortgage-Backed Securities:
3.00%, 7/20/45		3,714		(3,749,399	)
4.00%, 7/20/45		854		(904,840	)
Total TBA Sale Commitments (Proceeds — $8,553,890) — (0.6)%				(8,609,568	)
Total Investments, Net of TBA Sale Commitments — 117.8%				1,639,837,903
Liabilities in Excess of Other Assets — (17.8)%				(247,283,550	)

Net Assets — 100.0%			$	1,392,554,353

Notes to Schedule of Investments

(a)

See Notes to Financial Statements.



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	39


Schedule of Investments (continued)		U.S. Total Bond Index Master Portfolio

(b)

During the six months ended June 30, 2015, investments in issuers considered to be affiliates of the Master Portfolio for purposes of Section 2(a)(3) of the 1940 Act were as follows:


Affiliate	Shares/ Par Held at December 31, 2014		Shares/Par Purchased			Shares/Par Sold		Shares/ Par Held at June 30, 2015		Value at June 30, 2015		Income
BlackRock Cash Funds: Institutional, SL Agency Shares		251,106,435		11,297,576	¹		—		262,404,011	$	262,404,011	$	225,642
BlackRock Cash Funds: Prime, SL Agency Shares		—		78,000	¹		—		78,000	$	78,000	$	1,283	²
PNC Bank NA, 2.20%, 1/28/19	$	500,000		—			—	$	500,000	$	502,394	$	5,500
PNC Bank NA, 2.25%, 7/02/19	$	350,000		—			—	$	350,000	$	348,851	$	3,938
PNC Bank NA, 2.30%, 6/01/20	$	—	$	500,000				$	500,000	$	496,852		—
PNC Bank NA, 2.95%, 1/30/23	$	250,000		—			—	$	250,000	$	241,873	$	3,688
PNC Funding Corp., 5.63%, 2/01/17	$	150,000		—			—	$	150,000	$	159,408	$	4,219
PNC Funding Corp., 3.30%, 3/08/22	$	150,000		—			—	$	150,000	$	152,556	$	2,475
¹ Represents net shares purchased.
² Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.

(c)

Security, or a portion of security, is on loan.

(d)

Represents a step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate shown is as of report date.

(e)

Variable rate security. Rate shown is as of report date.

(f)

Security is perpetual in nature and has no stated maturity date.

(g)

Represents or includes a To-be-announced (“TBA”) transaction as of June 30, 2015. Unsettled TBA transactions were as follows:


Counterparty	Value		Unrealized Appreciation (Depreciation)
Barclays Capital, Inc.	$	17,312,920	$	(8,408	)
Citigroup Global Markets, Inc.	$	15,426,228	$	27,999
Credit Suisse Securities (USA) LLC	$	93,924,299	$	219,951
Deutsche Bank Securities, Inc.	$	18,535,206	$	49,004
Goldman Sachs & Co.	$	18,943,006	$	8,003
Jeffries and Co.	$	311,203	$	797
J.P. Morgan Securities LLC	$	22,728,338	$	(20,183	)
Merrill Lynch, Pierce, Fenner & Smith, Inc.	$	10,112,224	$	58,700
Morgan Stanley & Co. LLC	$	7,968,747	$	14,739
Nomura Securities International, Inc.	$	29,523,726	$	103,854
RBC Capital Markets, LLC	$	1,599,892	$	2,763
S.G. Americas	$	1,750,810	$	2,922
Wells Fargo Securities, LLC	$	3,156,730	$	1,825

(h)

Represents the current yield as of report date.

(i)

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

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments is based on the pricing transparency of the investment and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that the Master Portfolio has the ability to access

•

See Notes to Financial Statements.



40	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015


Schedule of Investments (concluded)		U.S. Total Bond Index Master Portfolio

As of June 30, 2015, the following table summarizes the Master Portfolio’s investments categorized in the disclosure hierarchy:


	Level 1		Level 2			Level 3		Total
Assets:
Investments:
Long-Term Investments¹:
Asset-Backed Securities		—	$	6,581,815			—	$	6,581,815
Corporate Bonds		—		353,332,739			—		353,332,739
Foreign Agency Obligations		—		47,100,922			—		47,100,922
Municipal Bonds		—		11,681,048			—		11,681,048
Non-Agency Mortgage-Backed Securities		—		20,392,986			—		20,392,986
Preferred Securities		—		61,763			—		61,763
U.S. Government Sponsored Agency Securities		—		437,543,693			—		437,543,693
U.S. Treasury Obligations		—		509,270,494			—		509,270,494
Short-Term Securities:
Money Market Funds	$	262,482,011		—			—		262,482,011
Liabilities:
Investments:
TBA Sale Commitments		—		(8,609,568	)		—		(8,609,568	)

Total	$	262,482,011	$	1,377,355,892			—	$	1,639,837,903

¹ See above Schedule of Investments for values in each sector and industry.

The Master Portfolio may hold liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of June 30, 2015, such liabilities are categorized within the disclosure hierarchy as follows:


	Level 1		Level 2			Level 3		Total
Liabilities:
Cash received as collateral for TBA commitments			$	(18,000	)		—	$	(18,000	)
Collateral on securities loaned at value		—		(78,000	)		—		(78,000	)

Total		—	$	(96,000	)		—	$	(96,000	)

For the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	41


Statement of Assets and Liabilities		U.S. Total Bond Index Master Portfolio


June 30, 2015 (Unaudited)

Assets
Investments at value — unaffiliated (including securities loaned at value of $75,672) (cost — $1,384,075,650)	$	1,384,063,526
Investments at value — affiliated (cost — $264,383,580)		264,383,945
Receivables:
Contributions from investors		10,655,054
Investments sold		8,890,811
TBA sale commitments		8,553,890
Interest		6,926,481
Principal paydowns		5,453
Securities lending income — affiliated		193

Total assets		1,683,479,353


Liabilities
Collateral on securities loaned at value		78,000
TBA sale commitments at value (proceeds — $8,553,890)		8,609,568
Cash received as collateral for TBA commitments		18,000
Payables:
Investments purchased		273,850,455
Withdrawals to investors		8,326,774
Investment advisory fees		23,752
Trustees’ fees		6,022
Other accrued expenses		12,429

Total liabilities		290,925,000

Net Assets	$	1,392,554,353


Net Assets Consist of
Investors’ capital	$	1,392,621,790
Net unrealized appreciation (depreciation)		(67,437	)

Net Assets	$	1,392,554,353


Statement of Operations		U.S. Total Bond Index Master Portfolio


Six Months Ended June 30, 2015 (Unaudited)

Investment Income
Interest	$	12,225,585
Interest — affiliated		245,462
Securities lending — affiliated — net		1,283
Foreign taxes withheld		(172	)

Total income		12,472,158


Expenses
Investment advisory		433,601
Independent Trustees		19,367
Professional		18,823

Total expenses		471,791
Less fees waived by the Manager		(128,397	)

Total expenses after fees waived		343,394

Net investment income		12,128,764


Realized and Unrealized Gain (Loss)
Net realized gain from:
Investments — unaffiliated		1,648,996
Net change in unrealized appreciation (depreciation) on:
Investments — unaffiliated		(17,109,349	)
Investments — affiliated		(4,642	)

		(17,113,991	)

Net realized and unrealized loss		(15,464,995	)

Net Increase in Net Assets Resulting from Operations	$	(3,336,231	)


Statements of Changes in Net Assets		U.S. Total Bond Index Master Portfolio


Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	12,128,764		$	20,593,194
Net realized gain		1,648,996			14,296,029
Net change in unrealized appreciation (depreciation)		(17,113,991	)		31,803,664

Net increase (decrease) in net assets resulting from operations		(3,336,231	)		66,692,887


Capital Transactions
Proceeds from contributions		307,497,084			924,146,923
Value of withdrawals		(104,099,437	)		(732,116,664	)

Net increase in net assets derived from capital transactions		203,397,647			192,030,259


Net Assets
Total increase in net assets		200,061,416			258,723,146
Beginning of period		1,192,492,937			933,769,791

End of period	$	1,392,554,353		$	1,192,492,937


Financial Highlights		U.S. Total Bond Index Master Portfolio


	Six Months Ended June 30, 2015 (Unaudited)		Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)		2014		2013		2012		2011		2010

Total Return
Total return		(0.15)%		5.98%		(2.23)%		4.06%		7.67%		6.94%


Ratios to Average Net Assets
Total expenses		0.07%		0.09%		0.09%		0.09%		0.13%		0.10%

Total expenses after fees waived		0.05%		0.07%		0.08%		0.08%		0.08%		0.08%

Net investment income		1.84%		1.76%		1.63%		1.86%		3.36%		3.80%


Supplemental Data
Net assets, end of period (000)	$	1,392,554	$	1,192,493	$	933,770	$	481,572	$	127,484	$	98,489

Portfolio turnover rate^1,2		191%		476%		417%		436%		122%		59%

Portfolio turnover rate includes TBA transactions, if any.

Includes mortgage dollar roll transactions (“MDRs”). Additional information regarding portfolio turnover rate is as follows:

Six Months Ended

June 30, 2015

(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Portfolio turnover rate (excluding MDRs)

133%

244%

214%

231%

121%


Notes to Financial Statements (Unaudited)		U.S. Total Bond Index Master Portfolio

1. Organization:

U.S. Total Bond Index Master Portfolio (the “Master Portfolio”) (formerly known as Bond Index Master Portfolio), a series of Master Investment Portfolio (“MIP”), is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a diversified, open-end management investment company. MIP is organized as a Delaware statutory trust.

2. Significant Accounting Policies:

Municipal investments (including commitments to purchase such investments on a “when-issued” basis) are valued on the basis of prices provided by dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments and information with respect to various relationships between investments.

Segregation and Collateralization: In cases where the Master Portfolio enters into certain investments (e.g., TBA sale commitments) that would be “senior securities” for 1940 Act purposes, the Master Portfolio may segregate or designate on its books and records cash or liquid securities having a market value at least equal to the amount of the Master Portfolio’s future obligations under such investments. Doing so allows the investment to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Master Portfolio may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments or obligations.



46	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015


Notes to Financial Statements (continued)		U.S. Total Bond Index Master Portfolio

The Master Portfolio has an arrangement with the custodian whereby fees may be reduced by credits earned on uninvested cash balances, which, if applicable, are shown as fees paid indirectly in the Statement of Operations. The custodian imposes fees on overdrawn cash balances, which can be offset by accumulated credits earned or may result in additional custody charges.

3. Securities and Other Investments:

Asset-Backed and Mortgage-Backed Securities: The Master Portfolio may invest in asset-backed securities. Asset-backed securities are generally issued as pass-through certificates, which represent undivided fractional ownership interests in an underlying pool of assets, or as debt instruments, which are also known as collateralized obligations, and are generally issued as the debt of a special purpose entity organized solely for the purpose of owning such assets and issuing such debt. Asset-backed securities are often backed by a pool of assets representing the obligations of a number of different parties. The yield characteristics of certain asset-backed securities may differ from traditional debt securities. One such major difference is that all or a principal part of the obligations may be prepaid at any time because the underlying assets (i.e., loans) may be prepaid at any time. As a result, a decrease in interest rates in the market may result in increases in the level of prepayments as borrowers, particularly mortgagors, refinance and repay their loans. An increased prepayment rate with respect to an asset-backed security subject to such a prepayment feature will have the effect of shortening the maturity of the security. In addition, the Master Portfolio may subsequently have to reinvest the proceeds at lower interest rates. If the Master Portfolio has purchased such an asset-backed security at a premium, a faster than anticipated prepayment rate could result in a loss of principal to the extent of the premium paid.

The Master Portfolio may purchase certain mortgage pass-through securities. There are a number of important differences among the agencies and instrumentalities of the U.S. Government that issue mortgage-related securities and among the securities that they issue. For example, mortgage-related securities guaranteed by Ginnie Mae are guaranteed as to the timely payment of principal and interest by Ginnie Mae and such guarantee is backed by the full faith and credit of the United States. However, mortgage-related securities issued by Freddie Mac and Fannie Mae, including Freddie Mac and Fannie Mae guaranteed mortgage pass-through certificates, which are solely the obligations of Freddie Mac and Fannie Mae, are not backed by or entitled to the full faith and credit of the United States, but are supported by the right of the issuer to borrow from the U.S. Treasury.

Non-agency mortgage-backed securities are securities issued by non-governmental issuers and have no direct or indirect government guarantees of payment and are subject to various risks. Non-agency mortgage loans are obligations of the borrowers thereunder only and are not typically insured or guaranteed by any other person or entity. The ability of a borrower to repay a loan is dependent upon the income or assets of the borrower. A number of factors, including a general economic downturn, acts of God, terrorism, social unrest and civil disturbances, may impair a borrower’s ability to repay its loans.

Multiple Class Pass-Through Securities: The Master Portfolio may invest in multiple class pass-through securities, including collateralized mortgage obligations (“CMOs”) and commercial mortgage-backed securities. These multiple class securities may be issued by Ginnie Mae, U.S. Government agencies or instrumentalities or by trusts formed by private originators of, or investors in, mortgage loans. In general, CMOs are debt obligations of a legal entity that are collateralized by, and multiple class pass-through securities represent direct ownership interests in, a pool of residential or commercial mortgage loans or mortgage pass-through securities (the “Mortgage Assets”), the payments on which are used to make payments on the CMOs or multiple pass-through securities. Classes of CMOs include interest only (“IOs”), principal only (“POs”), planned amortization classes and targeted amortization classes. IOs and POs are stripped mortgage-backed securities representing interests in a pool of mortgages, the cash flow from which has been separated into interest and principal components. IOs receive the interest portion of the cash flow while POs receive the principal portion. IOs and POs can be extremely volatile in response to changes in interest rates. As interest rates rise and fall, the value of IOs tends to move in the same direction as interest rates. POs perform best when prepayments on the underlying mortgages rise since this increases the rate at which the principal is returned and the yield to maturity on the PO. When payments on mortgages underlying a PO are slower than anticipated, the life of the PO is lengthened and the yield to maturity is reduced. If the underlying Mortgage Assets experience greater than anticipated prepayments of principal, the Master Portfolio may not fully recoup its initial investment in IOs.



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	47


Notes to Financial Statements (continued)		U.S. Total Bond Index Master Portfolio

Capital Trusts and Trust Preferred Securities: The Master Portfolio may invest in capital trusts and/or trust preferred securities. These securities are typically issued by corporations, generally in the form of interest-bearing notes with preferred securities characteristics, or by an affiliated business trust of a corporation, generally in the form of beneficial interests in subordinated debentures or similarly structured securities. The securities can be structured as either fixed or adjustable coupon securities that can have either a perpetual or stated maturity date. For trust preferred securities, the issuing bank or corporation will pay interest to the trust, which will then be distributed to holders of the trust preferred securities as a dividend. Dividends can be deferred without creating an event of default or acceleration, although maturity cannot take place unless all cumulative payment obligations have been met. The deferral of payments does not affect the purchase or sale of these securities in the open market. Payments on these securities are treated as interest rather than dividends for federal income tax purposes. These securities generally are rated below that of the issuing company’s senior debt securities and are freely callable at the issuer’s option.

TBA Commitments: The Master Portfolio may enter into TBA commitments. TBA commitments are forward agreements for the purchase or sale of mortgage-backed securities for a fixed price, with payment and delivery on an agreed upon future settlement date. The specific securities to be delivered are not identified at the trade date. However, delivered securities must meet specified terms, including issuer, rate and mortgage terms. When entering into TBA commitments, the Master Portfolio may take possession of or deliver the underlying mortgage-backed securities but can extend the settlement or roll the transaction. TBA commitments involve a risk of loss if the value of the security to be purchased or sold declines or increases, respectively, prior to settlement date.

In order to better define contractual rights and to secure rights that will help the Master Portfolio mitigate its counterparty risk, TBA commitments may be entered into by the Master Portfolio under Master Securities Forward Transaction Agreements (each, an “MSFTA”). An MSFTA typically contains, among other things, collateral posting terms and netting provisions in the event of default and/or termination event. The collateral requirements are typically calculated by netting the mark-to-market amount for each transaction under such agreement and comparing that amount to the value of the collateral currently pledged by the Master Portfolio and the counterparty. Cash collateral that has been pledged to cover the obligations of the Master Portfolio and cash collateral received from the counterparty, if any, is reported separately on the Statement of Assets and Liabilities as cash pledged as collateral for TBA commitments or cash received as collateral for TBA commitments, respectively. Non-cash collateral pledged by the Master Portfolio, if any, is noted in the Schedule of Investments. Typically, the Master Portfolio is permitted to sell, repledge or use the collateral they receive; however, the counterparty is not permitted to do so. To the extent amounts due to the Master Portfolio are not fully collateralized, contractually or otherwise, the Master Portfolio bears the risk of loss from counterparty non-performance.

The market value of securities on loan, all of which were classified corporate bond in the Master Portfolio’s Schedule of Investments, and the value of the 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. As of June 30, 2015, any securities on loan were collateralized by cash. The cash collateral invested by the securities lending agent, BlackRock Institutional Trust Company, N.A. (“BTC”), if any, is disclosed in the Schedule of Investments.

Securities lending transactions are entered into by the Master Portfolio 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 Master Portfolio, 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, the borrower can resell or re-pledge the loaned securities, and the Master Portfolio can reinvest cash collateral, or, upon an event of default, resell or re-pledge the collateral.



48	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015


Notes to Financial Statements (continued)		U.S. Total Bond Index Master Portfolio

As of June 30, 2015, the following table is a summary of the Master Portfolio’s securities lending agreements by counterparty, which are subject to offset under an MSLA:

Counterparty

Securities
Loaned
at Value

Cash
Collateral
Received¹

Net

Amount

Barclays Capital, Inc.

75,672

(75,672

)

—

Collateral with a value of $78,000 has been received in connection with securities lending agreements. Collateral received in excess of the value of securities loaned from the individual counterparty is not shown for financial reporting purposes.

4. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock for 1940 Act purposes.

MIP, on behalf of the Master Portfolio, entered into an Investment Advisory Agreement with the Manager, the Master Portfolio’s investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory and administration services. The Manager is responsible for the management of the Master Portfolio’s portfolio and provides the necessary personnel, facilities, equipment and certain other services to the operations of the Master Portfolio. For such services, the Master Portfolio pays the Manager a monthly fee based on a percentage of the Master Portfolio’s average daily net assets at an annual rate of 0.04%. Prior to April 30, 2015, the annual rate as a percentage of average daily net assets was 0.08%.

BAL is not entitled to compensation for providing administration services to the Master Portfolio, for so long as BAL is entitled to compensation for providing administration services to corresponding feeder funds that invest substantially all of their assets in the Master Portfolio, or BAL (or an affiliate) receives investment advisory fees from the Master Portfolio.

The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the Master Portfolio pays to the Manager indirectly through its investment in affiliated money market funds. This amount is included in fees waived by the Manager in the Statement of Operations. However, the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid in connection with the Master Portfolio’s investment in other affiliated investment companies, if any. For the six months ended June 30, 2015, the amount waived was $90,207.

The fees and expenses of MIP’s trustees who are not “interested persons” of MIP, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and MIP’s independent registered public accounting firm (together, the “independent expenses”) are paid directly by the Master Portfolio. The Manager has contractually agreed to provide an offsetting credit against the investment advisory fees paid by the Master Portfolio in an amount equal to the independent expenses. This contractual waiver is effective through April 30, 2016. The amount of the waiver, if any, is included in fees waived by the Manager in the Statement of Operations. For the six months ended June 30, 2015, the Manager waived $38,190 pursuant to the agreement.



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	49


Notes to Financial Statements (continued)		U.S. Total Bond Index Master Portfolio

Pursuant to a securities lending agreement, BTC may lend securities only when the difference between the borrower rebate rate and the risk free rate exceeds a certain level (such securities, the “specials only securities”).

Pursuant to such agreement, the Master Portfolio retains 80% of securities lending income. In addition, commencing the business day following the date that the aggregate securities lending income earned across certain funds in the Equity-Liquidity Complex in a calendar year exceeds a specified threshold, the Master Portfolio, pursuant to the securities lending agreement, will retain for the remainder of the calendar year securities lending income in an amount equal to 85% of securities lending income.

The share of securities lending income earned by the Master Portfolio is shown as securities lending — affiliated — net in the Statement of Operations. For the six months ended June 30, 2015, the Master Portfolio paid BTC $51 in total for securities lending agent services and collateral investment fees.

Certain officers and/or trustees of MIP are officers and/or directors of BlackRock or its affiliates.

5. Purchases and Sales:

For the six months ended June 30, 2015, purchases and sales of investments including paydowns and mortgage dollar rolls and excluding short-term securities, were as follows:


	Purchases		Sales
Non-U.S. Government Securities	$	2,523,549,175	$	2,406,834,007
U.S. Government Securities		165,258,186		80,498,002

For the six months ended June 30, 2015, purchases and sales related to mortgage dollar rolls were $753,549,920 and $754,898,165, respectively.

6. Income Tax Information:

The Master Portfolio 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 Master Portfolio U.S. federal tax returns remains open for each of the four years ended December 31, 2014. The statutes of limitations on the Master Portfolio’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.

As of June 30, 2014, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:


Tax cost	$	1,648,495,611

Gross unrealized appreciation	$	12,382,354
Gross unrealized depreciation		(12,430,494	)

Net unrealized depreciation	$	(48,140	)

7. Bank Borrowings:



50	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015


Notes to Financial Statements (concluded)		U.S. Total Bond Index Master Portfolio

0.00%) in effect from time to time plus 0.80% per annum on amounts borrowed. The agreement expires in April 2016 unless extended or renewed. Participating Funds paid administration, legal and arrangement fees, which are included in miscellaneous expenses in the Statement of Operations, and along with commitment 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 June 30, 2015, the Master Portfolio did not borrow under the credit agreement.

8. Principal Risks:

The Master Portfolio invests a significant portion of its assets in fixed-income securities and/or uses derivatives tied to the fixed-income markets. Changes in market interest rates or economic conditions may affect the value and/or liquidity of such investments. Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall and decrease as interest rates rise. The Master Portfolio may be subject to a greater risk of rising interest rates due to the current period of historically low rates.

The Master Portfolio invests a significant portion of its assets in securities backed by commercial or residential mortgage loans or in issuers that hold mortgage and other asset-backed securities. Investment percentages in these securities are presented in the Schedule of Investments. Changes in economic conditions, including delinquencies and/or defaults on assets underlying these securities, can affect the value, income and/or liquidity of such positions.

9. Subsequent Events:



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	51


Disclosure of Investment Advisory Agreement

Activities and Composition of the Board

The Agreement

The Board, acting directly and through its committees, considers at each of its meetings, and from time to time as appropriate, factors that are relevant to its annual consideration of the renewal of the Agreement, including the services and support provided by BlackRock to the Master Portfolio, the Portfolio and their shareholders. Among the matters the Board considered were: (a) investment performance for one-year, three-year, five-year and/or since inception periods, as applicable, against peer funds, applicable benchmark, and performance metrics, as applicable, as well as senior management’s and portfolio managers’ analysis of the reasons for any over performance or underperformance relative to its peers, benchmarks, and other performance metrics, as applicable; (b) fees, including advisory, administration, if applicable, and other amounts paid to BlackRock and its affiliates by the Master Portfolio and/or the Portfolio for services, such as marketing and distribution, call center and fund accounting; (c) the Master Portfolio’s and /or the Portfolio’s operating expenses and how BlackRock allocates expenses to the Master Portfolio and the Portfolio; (d) the resources devoted to, risk oversight of, and compliance reports relating to, implementation of the Master Portfolio’s and the Portfolio’s investment objective(s), policies and restrictions, and meeting new regulatory requirements; (e) the Master Fund’s and the Fund’s compliance with its respective compliance policies and procedures; (f) the nature, cost and character of non-investment management services provided by BlackRock and its affiliates; (g) BlackRock’s and other service providers’ internal controls and risk and compliance oversight mechanisms; (h) BlackRock’s implementation of the proxy voting policies approved by the Board; (i) execution quality of portfolio transactions; (j) BlackRock’s implementation of the Master Fund’s and/or the Fund’s valuation and liquidity procedures; (k) an analysis of management fees for products with similar investment mandates across the open-end fund, exchange-traded fund (“ETF”), closed-end fund and institutional account product channels, as applicable, and the similarities and differences between these products and the services provided as compared to the Master Portfolio and/or the Portfolio; (l) BlackRock’s compensation methodology for its investment professionals and the incentives it creates, along with investment professionals’ investments in the fund(s) they manage; and (m) periodic updates on BlackRock’s business.



52	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015


Disclosure of Investment Advisory Agreement (continued)

funds they manage; funds’ portfolio risk targets; and management fee levels and breakpoints. The Board further discussed with BlackRock: BlackRock’s management structure; portfolio turnover, execution quality and use of soft dollars; BlackRock’s portfolio manager compensation and performance accountability; marketing support for the funds; services provided to the funds by BlackRock affiliates; and BlackRock’s oversight of relationships with third party service providers.

Board Considerations in Approving the Agreement

Funds are ranked by Lipper in quartiles, ranging from first to fourth, where first is the most desirable quartile position and fourth is the least desirable.



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	53


Disclosure of Investment Advisory Agreement (continued)

portfolio trading capabilities; use of technology; commitment to compliance; credit analysis capabilities; risk analysis and oversight capabilities; and the approach to training and retaining portfolio managers and other research, advisory and management personnel. The Board engaged in a review of BlackRock’s compensation structure with respect to the Master Portfolio’s portfolio management team and BlackRock’s ability to attract and retain high-quality talent and create performance incentives.

The Board noted that for the one-, three- and five-year periods reported, the Portfolio’s gross performance (before expenses and fees), as agreed upon by the Board, was out of tolerance, within tolerance, and within tolerance of its benchmark, respectively. BlackRock believes that gross performance relative to the benchmark is an appropriate performance metric for the Portfolio.

C. Consideration of the Advisory/Management Fees and the Cost of the Services and Profits to be Realized by BlackRock and its Affiliates from their Relationship with the Master Portfolio and the Portfolio: The Board, including the Independent Board Members, reviewed the Master Portfolio’s contractual advisory fee rate compared with the other funds in the Portfolio’s Lipper category. The contractual advisory fee rate is shown before taking into account any reimbursements or fee waivers. The Board also compared the Portfolio’s total expense ratio, as well as the Master Portfolio’s actual advisory fee rate, to those of other funds in the Portfolio’s Lipper category. The total expense ratio represents a fund’s total net operating expenses, including any 12b-1 or non-12b-1 service fees. The total expense ratio gives effect to any expense reimbursements or fee waivers that benefit a fund, and the actual advisory fee rate gives effect to any advisory fee reimbursements or waivers that benefit a fund. The Board considered the services provided and the fees charged by BlackRock and its affiliates to other types of clients with similar investment mandates, as applicable, including institutional accounts and sub-advised mutual funds.



54	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015


Disclosure of Investment Advisory Agreement (continued)

provided for the two prior years. The Board reviewed BlackRock’s profitability with respect to certain other U.S. fund complexes managed by the Manager and/or its affiliates. The Board reviewed BlackRock’s assumptions and methodology of allocating expenses in the profitability analysis, noting the inherent limitations in allocating costs among various advisory products. The Board recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, precision of expense allocations and business mix. As a result, calculating and comparing profitability at individual fund levels is difficult.

The Board noted that the Master Portfolio’s contractual advisory fee rate ranked in the first quartile, and that the actual advisory fee rate and the Portfolio’s total expense ratio ranked in the third and first quartiles, respectively, relative to the Portfolio’s Expense Peers. The Board noted that BlackRock proposed, and the Board agreed to, a contractual reduction of the Master Portfolio’s advisory fee. This advisory fee reduction was implemented on April 30, 2015. The Board also noted that BlackRock and its affiliates have contractually agreed to reimburse or otherwise compensate the Master Portfolio/Portfolio for the fees and expenses of the Independent Board Members, counsel to the Independent Board Members and the Master Portfolio’s/Portfolio’s independent registered public accounting firm.



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	55


Disclosure of Investment Advisory Agreement (concluded)

Conclusion



56	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015


Officers and Trustees

Rodney D. Johnson, Chair of the Board and Trustee

David O. Beim, Trustee

Collette Chilton, Trustee

Frank J. Fabozzi, Trustee

Dr. Matina S. Horner, Trustee

Herbert I. London, Trustee

Cynthia A. Montgomery, Trustee

Barbara G. Novick, Trustee

Joseph P. Platt, Trustee

Robert C. Robb, Jr., Trustee

Toby Rosenblatt, Trustee

Mark Stalnecker, Trustee

Kenneth L. Urish, Trustee

Frederick W. Winter, Trustee

John M. Perlowski, President and Chief Executive Officer

Richard Hoerner, CFA, Vice President

Jennifer McGovern, Vice President

Neal Andrews, Chief Financial Officer

Jay Fife, Treasurer

Charles Park, Chief Compliance Officer

Fernanda Piedra, Anti-Money Laundering Compliance Officer

Benjamin Archibald, Secretary

Effective March 1, 2015, Charles Park resigned as Anti-Money Laundering Compliance Officer of the Trust/MIP and Fernanda Piedra became Anti-Money Laundering Compliance Officer of the Trust/MIP.

Effective May 18, 2015, Ian MacKinnon resigned as a Trustee of the Trust/MIP.



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	57


Additional Information

General Information

Householding

Availability of Quarterly Schedule of Investments

The Fund/Master Portfolio file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s/Master Portfolio’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The Fund’s/Master Portfolio’s Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762.

Availability of Proxy Voting Policies and Procedures

Availability of Proxy Voting Record

Information about how the Fund/Master Portfolio voted proxies relating to securities held in the Fund’s/Master Portfolio’s portfolio during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com or by calling (800) 441-7762 and (2) on the SEC’s website at http://www.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 http://www.blackrock.com for more information.


Shareholder Privileges

Account 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.



58	BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015


Additional Information (concluded)


BlackRock Privacy Principles



BLACKROCK U.S. TOTAL BOND INDEX FUND	JUNE 30, 2015	59

LOGO


BINF-6/15-SAR

JUNE 30, 2015

SEMI-ANNUAL REPORT (UNAUDITED)

BlackRock Funds III

^Ø	BlackRock Cash Funds: Institutional

^Ø	BlackRock Cash Funds: Prime

^Ø	BlackRock Cash Funds: Treasury

Not FDIC Insured • May Lose Value • No Bank Guarantee


Table of Contents


	Page
The Markets in Review		3
Semi-Annual Report:
Money Market Overview		4
Fund Information		5
Disclosure of Expenses		6
Fund Financial Statements:
Statements of Assets and Liabilities		7
Statements of Operations		8
Statements of Changes in Net Assets		9
Fund Financial Highlights		12
Fund Notes to Financial Statements		31
Master Portfolio Information		36
Master Portfolio Financial Statements:
Schedules of Investments		37
Statements of Assets and Liabilities		49
Statements of Operations		50
Statements of Changes in Net Assets		51
Master Portfolio Financial Highlights		54
Master Portfolio Notes to Financial Statements		57
Disclosure of Investment Advisory Agreement		60
Officers and Trustees		65
Additional Information		66



2	BLACKROCK FUNDS III	JUNE 30, 2015

The Markets in Review

Dear Shareholder,

Sincerely,

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

LOGO

Rob Kapito

President, BlackRock Advisors, LLC


Total Returns as of June 30, 2015
	6-month			12-month
U.S. large cap equities (S&P 500^® Index)		1.23	%		7.42	%
U.S. small cap equities (Russell 2000^® Index)		4.75			6.49
International equities (MSCI Europe, Australasia, Far East Index)		5.52			(4.22	)
Emerging market equities (MSCI Emerging Markets Index)		2.95			(5.12	)
3-month Treasury bills (BofA Merrill Lynch 3-Month U.S. Treasury Bill Index)		0.01			0.02
U.S. Treasury securities (BofA Merrill Lynch 10-Year U.S. Treasury Index)		(0.51	)		3.79
U.S. investment-grade bonds (Barclays U.S. Aggregate Bond Index)		(0.10	)		1.86
Tax-exempt municipal bonds (S&P Municipal Bond Index)		0.01			3.00
U.S. high yield bonds (Barclays U.S. Corporate High Yield 2% Issuer Capped Index)		2.53			(0.39	)
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.



		THIS PAGE NOT PART OF YOUR FUND REPORT				3


Money Market Overview

For the Six-Month Period Ended June 30, 2015

The Federal Open Market Committee (the “FOMC”) left the federal funds rate unchanged at the target range of 0.00% to 0.25% throughout the first half of 2015. The FOMC’s statement at the conclusion of the March 18th meeting read “that an increase in the target range for the federal funds rate remains unlikely at the April Committee meeting,” but the FOMC “anticipates that it will be appropriate to raise the target range when it sees further improvement in the labor market.” This language marked a departure from previous statements in which the FOMC said “it can be patient in beginning to normalize the stance of monetary policy.” The removal of the word “patient” was viewed by the market as a small but meaningful step toward the beginning of higher rates.

As the period progressed, economic growth appeared to rebound from the soft patch caused by temporary factors earlier in the year. While the FOMC acknowledged at their June 17th meeting that “the underutilization of labor resources diminished somewhat,” continued weakness in broad inflation measures prompted the FOMC to remain patient in regard to raising interest rates. Several Federal Reserve (“Fed”) officials subsequently indicated that the September meeting continues to be the likely date for a “lift-off” of the anticipated rate hiking cycle if economic activity accelerates as expected. This outlook, however, is becoming increasingly clouded by events in overseas markets. Specifically, the FOMC could forestall the beginning of the normalization of monetary policy should U.S. markets be materially affected by the recent turmoil in Greece, Puerto Rico or China.

Chairwoman Yellen followed the release of the June statement with a scheduled press conference in which she further clarified the FOMC’s views. While Ms. Yellen did say she expects the FOMC will raise rates in 2015, she stated that the decision would be driven by economic data and played down the importance of timing. She stressed that the date of the first rate increase is less important than the trajectory of subsequent increases, affirming that the tightening cycle would be “gradual” and not follow a “mechanical formula.”

In the eurozone, the European Central Bank (“ECB”) elected to maintain its deposit rate at a negative 0.20%. At the ECB’s most recent meeting, President Mario Draghi said that he expects the economic recovery in the eurozone to broaden as easier credit conditions, a lower euro and cheaper oil have added to the pace of growth. The ECB forecasted eurozone growth rates at 1.5% for the year 2015 and 1.9% in 2016. Regarding Greece, Mario Draghi said that the “situation is in evolution” and that the ECB will continue to “monitor the situation very closely.”

London Interbank Offered Rates (“LIBOR”) moved higher over the period amid speculation of a possible rate hike from the FOMC in mid- to late-2015. The benchmark three-month LIBOR ended the period at 0.283%, which is nearly three basis points (0.03%) higher than it had been six months prior.

After an extended period of calm conditions, the short-term tax-exempt market began to show weakness as April 15 personal income tax payments due were much larger than expected, forcing significant outflows from money market mutual funds. In order to satisfy the large amount of shareholder withdrawals, money funds broadly sold variable rate demand notes (“VRDNs”) back to dealers, causing dealer inventories to swell. As supply increased, the rates on VRDNs moved higher for the first time in 2015. After remaining at its all-time low of 0.02% for nearly the entire first quarter of 2015, the benchmark Securities Industry and Financial Markets Association (“SIFMA”) Index, which represents the average rate on seven-day, high-quality, tax-exempt VRDNs, moved higher in April and touched a recent high of 0.11% in late April and May. The month of June, however, ushered some demand back into the VRDN market as money funds sought to quickly reinvest the seasonal inflows of bond coupons from their holdings. The SIFMA Index dropped to 0.07% by June 30; which still seemed relatively generous given that the average rate for the overall 6-month period ended June 30 was only 0.05%. (The SIFMA Index is a highly relevant measure for tax-exempt money market mutual funds because VRDNs make up the bulk of their assets.)

Given the continued improvement in the fiscal health of state and local municipal issuers, their need for short-term borrowing declined for the fifth consecutive year, resulting in a lower supply of one-year fixed-rate notes in the municipal market and keeping one-year rates relatively low. However, expectations for a federal funds rate hike before the year ends have caused some upward pressure, albeit modest, on one-year rates. Consequently, the Municipal Market Advisors AAA General Obligation One-Year Index yield increased from 0.19% on January 1, 2015 to 0.29% on June 30, 2015.

Municipal money fund investors continue to be very selective within one-year maturities. As the FOMC’s change in monetary policy remains on the horizon and fund investors face unprecedented money market fund reform, there is widespread desire to maintain defensive positioning with higher levels of liquidity and shorter weighted average maturities. We expect one-year levels to continue to move higher throughout the summer “note season,” when municipalities issue the bulk of their one-year tax and revenue anticipation notes. Thus, issuers will soon need to offer greater yield premiums to entice buyers to extend out to the full year maturity, which would cause the short-term municipal yield curve to steepen.

Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.



4	BLACKROCK FUNDS III	JUNE 30, 2015


Fund Information as of June 30, 2015


BlackRock Cash Funds: Institutional

BlackRock Cash Funds: Institutional’s (the “Fund”) investment objective is to seek a high level of income consistent with liquidity and the preservation of capital.


	7-Day SEC Yield			7-Day Yield
Aon Captives		0.05	%		0.05	%
Institutional		0.15	%		0.15	%
Select		0.08	%		0.08	%
SL Agency		0.18	%		0.18	%


BlackRock Cash Funds: Prime

BlackRock Cash Funds: Prime’s (the “Fund”) investment objective is to seek a high level of income consistent with liquidity and the preservation of capital.


	7-Day SEC Yield			7-Day Yield
Capital		0.11	%		0.11	%
Institutional		0.13	%		0.13	%
Premium		0.08	%		0.08	%
SL Agency		0.16	%		0.16	%


BlackRock Cash Funds: Treasury

BlackRock Cash Funds: Treasury’s (the “Fund”) investment objective is to seek a high level of current income consistent with the preservation of capital and liquidity.


	7-Day SEC Yield			7-Day Yield
Institutional		0.00	%		0.00	%
SL Agency		0.00	%		0.00	%

The 7-Day SEC Yields may differ from the 7-Day Yields shown due to the fact that the 7-Day SEC Yields exclude distributed capital gains.

Past performance is not indicative of future results.



BLACKROCK FUNDS III	JUNE 30, 2015	5


Disclosure of Expenses

Shareholders of these Funds may incur the following charges: (a) transactional expenses, such as sales charges; and (b) operating expenses, including administration fees, service and distribution fees, including 12b-1 fees, acquired fund fees and expenses, and other Fund expenses. The expense examples shown below (which are based on a hypothetical investment of $1,000 invested on January 1, 2015 and held through June 30, 2015) are intended to assist shareholders both in calculating expenses based on an investment in each Fund and in comparing these expenses with similar costs of investing in other mutual funds.

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

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

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


Expense Examples


	Actual						Hypothetical²
BlackRock Cash Funds: Institutional	Beginning Account Value January 1, 2015		Ending Account Value June 30, 2015		Expenses Paid During the Period¹		Beginning Account Value January 1, 2015		Ending Account Value June 30, 2015		Expenses Paid During the Period¹		Annualized Expense Ratio
Aon Captives	$	1,000.00	$	1,000.20	$	1.09	$	1,000.00	$	1,023.70	$	1.10		0.22	%
Institutional	$	1,000.00	$	1,000.70	$	0.60	$	1,000.00	$	1,024.20	$	0.60		0.12	%
Select	$	1,000.00	$	1,000.30	$	0.99	$	1,000.00	$	1,023.80	$	1.00		0.20	%
SL Agency	$	1,000.00	$	1,000.80	$	0.45	$	1,000.00	$	1,024.35	$	0.45		0.09	%
BlackRock Cash Funds: Prime
Capital	$	1,000.00	$	1,000.50	$	0.69	$	1,000.00	$	1,024.10	$	0.70		0.14	%
Institutional	$	1,000.00	$	1,000.60	$	0.60	$	1,000.00	$	1,024.20	$	0.60		0.12	%
Premium	$	1,000.00	$	1,000.40	$	0.84	$	1,000.00	$	1,023.95	$	0.85		0.17	%
SL Agency	$	1,000.00	$	1,000.80	$	0.45	$	1,000.00	$	1,024.35	$	0.45		0.09	%
BlackRock Cash Funds: Treasury
Institutional	$	1,000.00	$	1,000.00	$	0.40	$	1,000.00	$	1,024.40	$	0.40		0.08	%
SL Agency	$	1,000.00	$	1,000.00	$	0.40	$	1,000.00	$	1,024.40	$	0.40		0.08	%

For each class of a Fund, expenses are equal to the annualized net expense ratio for the class, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period shown). Because each Fund invests significantly in its corresponding Master Portfolio, the expense examples reflect the net expenses of both the Fund and the Master Portfolio in which it invests.

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



6	BLACKROCK FUNDS III	JUNE 30, 2015


Statements of Assets and Liabilities


June 30, 2015 (Unaudited)	BlackRock Cash Funds: Institutional		BlackRock Cash Funds: Prime		BlackRock Cash Funds: Treasury

Assets
Investments at value — from the applicable Master Portfolio^1,2	$	36,934,601,430	$	23,058,433,694	$	5,215,933,782
Capital shares sold receivable		—		7		5

Total assets		36,934,601,430		23,058,433,701		5,215,933,787


Liabilities
Payables:
Income dividends		4,401,914		2,008,921		622
Administration fees		763,165		758,193		23,509
Professional fees		—		2,606		5,819
Distribution fees		657		—		—
Contributions to the Master Portfolio		—		7		5

Total liabilities		5,165,736		2,769,727		29,955

Net Assets	$	36,929,435,694	$	23,055,663,974	$	5,215,903,832


Net Assets Consist of
Paid-in capital	$	36,927,101,089	$	23,054,896,098	$	5,215,823,371
Undistributed net investment income		—		3,950		—
Accumulated net realized gain		2,334,605		763,926		80,461

Net Assets	$	36,929,435,694	$	23,055,663,974	$	5,215,903,832

¹ Investments at cost — affiliated	$	36,934,601,430	$	23,058,433,694	$	5,215,933,782


² Money Market Master Portfolio, Prime Money Market Master Portfolio, and Treasury Money Market Master Portfolio (each, a “Master Portfolio”), respectively.

Net Asset Value
Aon Captives:
Net assets	$	8,000,203		—		—

Shares outstanding³		7,999,986		—		—

Net asset value	$	1.00		—		—

Capital:
Net assets		—	$	1,475,876,104		—

Shares outstanding³		—		1,475,833,879		—

Net asset value		—	$	1.00		—

Institutional:
Net assets	$	3,413,781,613	$	10,021,767,133	$	3,903

Shares outstanding³		3,413,688,829		10,021,480,477		3,904

Net asset value	$	1.00	$	1.00	$	1.00

Premium:
Net assets		—	$	1,240,488,261		—

Shares outstanding³		—		1,240,452,768		—

Net asset value		—	$	1.00		—

Select:
Net assets	$	5,389		—		—

Shares outstanding³		5,389		—		—

Net asset value	$	1.00		—		—

SL Agency:
Net assets	$	33,507,648,489	$	10,317,532,476	$	5,215,899,929

Shares outstanding³		33,506,737,671		10,317,237,351		5,215,819,469

Net asset value	$	1.00	$	1.00	$	1.00

³ Unlimited number of shares authorized, no par value.


Statements of Operations


Six Months Ended June 30, 2015 (Unaudited)	BlackRock Cash Funds: Institutional			BlackRock Cash Funds: Prime			BlackRock Cash Funds: Treasury

Investment Income
Net investment income allocated from the applicable Master Portfolio:
Interest	$	52,907,213		$	27,195,629		$	829,960
Expenses		(20,933,759	)		(11,300,991	)		(1,013,342	)
Fees waived		6,485,167			3,497,243			327,700

Total income		38,458,621			19,391,881			144,318


Fund Expenses
Administration — class specific		4,587,422			4,502,130			198,225
Professional		6,697			6,698			6,697
Distribution — Aon Captives		3,967			—			—
Miscellaneous		325			325			325

Total expenses		4,598,411			4,509,153			205,247
Less administration fees waived — class specific		(4	)		(113	)		(90,822	)
Less fees reimbursed by the administrator		(6,697	)		(6,698	)		(6,697	)

Total expenses after fees waived and/or reimbursed		4,591,710			4,502,342			107,728

Net investment income		33,866,911			14,889,539			36,590


Realized Gain Allocation from the Master Portfolios
Net realized gain from investments		1,055,535			415,819			72,803

Net Increase in Net Assets Resulting from Operations	$	34,922,446		$	15,305,358		$	109,393


Statements of Changes in Net Assets


	BlackRock Cash Funds: Institutional
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	33,866,911		$	56,132,730
Net realized gain		1,055,535			3,084,717

Net increase in net assets resulting from operations		34,922,446			59,217,447


Distributions to Shareholders From¹
Net investment income:
Aon Captives		(1,452	)		(479	)
Institutional		(2,136,726	)		(2,429,848	)
Select		(10	)		(62	)
SL Agency		(31,728,723	)		(53,702,341	)
Net realized gain:
Aon Captives		—			(667	)
Institutional		—			(179,314	)
Select		—			(9	)
SL Agency		—			(3,240,008	)

Decrease in net assets resulting from distributions to shareholders		(33,866,911	)		(59,552,728	)


Capital Share Transactions
Net decrease in net assets derived from capital share transactions		(3,079,621,560	)		(675,694,893	)


Net Assets
Total decrease in net assets		(3,078,566,025	)		(676,030,174	)
Beginning of period		40,008,001,719			40,684,031,893

End of period	$	36,929,435,694		$	40,008,001,719

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


Statements of Changes in Net Assets


	BlackRock Cash Funds: Prime
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	14,889,539		$	15,551,904
Net realized gain		415,819			728,334

Net increase in net assets resulting from operations		15,305,358			16,280,238


Distributions to Shareholders From¹
Net investment income:
Capital		(1,024,818	)		(875,180	)
Institutional		(5,291,597	)		(5,326,684	)
Premium		(462,218	)		(588,278	)
Select		(279	)		(74	)
SL Agency		(8,110,627	)		(8,761,688	)
Net realized gain:
Capital		—			(66,763	)
Institutional		—			(221,109	)
Premium		—			(49,476	)
Select		—			(42	)
SL Agency		—			(312,573	)
Trust		—			(37	)

Decrease in net assets resulting from distributions to shareholders		(14,889,539	)		(16,201,904	)


Capital Share Transactions
Net increase in net assets derived from capital share transactions		362,925,538			5,582,620,700


Net Assets
Total increase in net assets		363,341,357			5,582,699,034
Beginning of period		22,692,322,617			17,109,623,583

End of period	$	23,055,663,974		$	22,692,322,617

Undistributed net investment income, end of period	$	3,950		$	3,950

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


Statements of Changes in Net Assets


	BlackRock Cash Fund: Treasury
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	36,590			—
Net realized gain		72,803		$	59,659

Net increase in net assets resulting from operations		109,393			59,659


Distributions to Shareholders From¹
Net investment income:
SL Agency		(36,590	)		—
Net realized gain:
Capital		—			(12	)
Select		—			(97	)
SL Agency		—			(58,648	)
Trust		—			(257	)

Decrease in net assets resulting from distributions to shareholders		(36,590	)		(59,014	)


Capital Share Transactions
Net increase in net assets derived from capital share transactions		2,830,040,409			800,572,506


Net Assets
Total increase in net assets		2,830,113,212			800,573,151
Beginning of period		2,385,790,620			1,585,217,469

End of period	$	5,215,903,832		$	2,385,790,620

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


Financial Highlights		BlackRock Cash Funds: Institutional


	Aon Captives
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Net investment income		0.0002			0.0000	¹		0.0005			0.0012			0.0008			0.0012
Net realized gain		0.0000	¹		0.0001			0.0000	¹		—			—			—

Net increase from investment operations		0.0002			0.0001			0.0005			0.0012			0.0008			0.0012

Distributions from:²
Net investment income		(0.0002	)		(0.0000	)³		(0.0005	)		(0.0012	)		(0.0008	)		(0.0012	)
Net realized gain		—			(0.0001	)		(0.0000	)³		—			—			—

Total distributions		(0.0002	)		(0.0001	)		(0.0005	)		(0.0012	)		(0.0008	)		(0.0012	)

Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00


Total Return⁴
Based on net asset value		0.02%	⁵		0.01%			0.05%			0.12%			0.08%			0.12%


Ratios to Average Net Assets⁶
Total expenses		0.22%	^7,8		0.22%	⁸		0.22%	⁸		0.22%	⁸		0.22%	⁸		0.25%

Total expenses after fees waived and/or reimbursed		0.22%	^7,8		0.22%	⁸		0.22%	⁸		0.22%	⁸		0.22%	⁸		0.22%

Net investment income		0.04%	^7,8		0.01%	⁸		0.04%	⁸		0.12%	⁸		0.07%	⁸		0.11%


Supplemental Data
Net assets, end of period (000)	$	8,000		$	7,999		$	9,166		$	11,003		$	9,167		$	59,237

Amount is less than $0.00005 per share.

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

Amount is greater than $(0.00005) per share.

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the year ended December 31, 2010, which includes gross expenses.

⁷

Annualized.

⁸

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.


Financial Highlights (continued)		BlackRock Cash Funds: Institutional


		Capital
		Period January 1, 2010 to December 1, 2010¹


Per Share Operating Performance
Net asset value, beginning of period	$	1.00

Net investment income		0.0018
Distributions from net investment income²		(0.0018	)

Net asset value, end of period	$	1.00


Total Return³
Based on net asset value		0.18%	⁴


Ratios to Average Net Assets⁵
Total expenses		0.17%	^6,7

Total expenses after fees waived.		0.14%	^6,7

Net investment income		0.18%	^6,7


Supplemental Data
Net assets, end of period (000)		—	¹

There were no Capital Shares outstanding from December 2, 2010 through December 31, 2010 and during the fiscal years ended December 31, 2011, December 31, 2012, December 31, 2013, December 31, 2014 and the six months ended June 30, 2015.

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

Where applicable, assumes the reinvestment of distributions.

⁴

Aggregate total return.

⁵

Includes the Fund’s share of the Master Portfolio’s allocated gross expenses and/or net investment income.

⁶

Annualized.

⁷

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.


Financial Highlights (continued)		BlackRock Cash Funds: Institutional


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Net investment income		0.0007			0.0010			0.0015			0.0022			0.0018			0.0022
Net realized gain		0.0000	¹		0.0001			0.0000	¹		—			—			—

Net increase from investment operations		0.0007			0.0011			0.0015			0.0022			0.0018			0.0022

Distributions from:²
Net investment income		(0.0007	)		(0.0010	)		(0.0015	)		(0.0022	)		(0.0018	)		(0.0022	)
Net realized gain		—			(0.0001	)		(0.0000	)³		—			—			—

Total distributions		(0.0007	)		(0.0011	)		(0.0015	)		(0.0022	)		(0.0018	)		(0.0022	)

Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00


Total Return⁴
Based on net asset value		0.07%	⁵		0.11%			0.15%			0.22%			0.18%			0.22%


Ratios to Average Net Assets⁶
Total expenses		0.12%	^7,8		0.12%	⁸		0.12%	⁸		0.12%	⁸		0.12%	⁸		0.15%

Total expenses after fees waived and/or reimbursed		0.12%	^7,8		0.12%	⁸		0.12%	⁸		0.12%	⁸		0.12%	⁸		0.12%

Net investment income		0.14%	^7,8		0.11%	⁸		0.14%	⁸		0.22%	⁸		0.17%	⁸		0.22%


Supplemental Data
Net assets, end of period (000)	$	3,413,782		$	2,251,121		$	2,802,911		$	1,211,912		$	1,089,872		$	1,076,268

Amount is less than $0.00005 per share.

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

Amount is greater than $(0.00005) per share.

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

⁷

Annualized.

⁸

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.


Financial Highlights (continued)		BlackRock Cash Funds: Institutional


		Premium
		Period October 12, 2012 to October 17, 2012¹		Period January 1, 2010 to November 11, 2010²



Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00

Net investment income		0.0000	³		0.0003
Distributions from net investment income⁴		(0.0000	)⁵		(0.0003	)

Net asset value, end of period	$	1.00		$	1.00


Total Return⁶
Based on net asset value		0.00%	⁷		0.03%	⁷


Ratios to Average Net Assets⁸
Total expenses		0.17%	^9,10		0.20%	^9,10

Total expenses after fees waived		0.17%	^9,10		0.17%	^9,10

Net investment income		0.19%	^9,10		0.10%	^9,10


Supplemental Data
Net assets, end of period (000)		—	¹		—	²

There were no Premium Shares outstanding during the fiscal years ended December 31, 2012, December 31, 2013, December 31, 2014 and the six months ended June 30, 2015, except for the period from October 12, 2012 through October 17, 2012.

There were no Premium Shares outstanding from November 12, 2010 through December 31, 2010 and during the fiscal year ended December 31, 2011.

Amount is less than $0.00005 per share.

⁴

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

⁵

Amount is greater than $(0.00005) per share.

⁶

Where applicable, assumes the reinvestment of distributions.

⁷

Aggregate total return.

⁸

Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the period ended November 11, 2010, which includes gross expenses.

⁹

Annualized.

¹⁰

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.


Financial Highlights (continued)		BlackRock Cash Funds: Institutional


	Select
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Net investment income		0.0003			0.0002			0.0007			0.0014			0.0010			0.0014
Net realized gain		0.0000	¹		0.0001			0.0000	¹		—			—			—

Net increase from investment operations		0.0003			0.0003			0.0007			0.0014			0.0010			0.0014

Distributions from:²
Net investment income		(0.0003	)		(0.0002	)		(0.0007	)		(0.0014	)		(0.0010	)		(0.0014	)
Net realized gain		—			(0.0001	)		(0.0000	)³		—			—			—

Total distributions		(0.0003	)		(0.0003	)		(0.0007	)		(0.0014	)		(0.0010	)		(0.0014	)

Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00


Total Return⁴
Based on net asset value		0.03%	⁵		0.03%			0.07%			0.14%			0.10%			0.14%


Ratios to Average Net Assets⁶
Total expenses		0.22%	^7,8		0.22%	⁸		0.22%	⁸		0.22%	⁸		0.22%	⁸		0.25%

Total expenses after fees waived and/or reimbursed		0.20%	^7,8		0.20%	⁸		0.20%	⁸		0.20%	⁸		0.20%	⁸		0.20%

Net investment income		0.06%	^7,8		0.03%	⁸		0.06%	⁸		0.14%	⁸		0.09%	⁸		0.13%


Supplemental Data
Net assets, end of period (000)	$	5		$	109		$	4,324		$	11,459		$	44,788		$	29,944

Amount is less than $0.00005 per share.

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

Amount is greater than $(0.00005) per share.

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

⁷

Annualized.

⁸

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.


Financial Highlights (continued)		BlackRock Cash Funds: Institutional


	SL Agency
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Net investment income		0.0008			0.0013			0.0018			0.0025			0.0021			0.0025
Net realized gain		0.0000	¹		0.0001			0.0000	¹		—			—			—

Net increase from investment operations		0.0008			0.0014			0.0018			0.0025			0.0021			0.0025

Distributions from:²
Net investment income		(0.0008	)		(0.0013	)		(0.0018	)		(0.0025	)		(0.0021	)		(0.0025	)
Net realized gain		—			(0.0001	)		(0.0000	)³		—			—			—

Total distributions		(0.0008	)		(0.0014	)		(0.0018	)		(0.0025	)		(0.0021	)		(0.0025	)

Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00


Total Return⁴
Based on net asset value		0.08%	⁵		0.14%			0.18%			0.25%			0.21%			0.25%


Ratios to Average Net Assets⁶
Total expenses		0.09%	^7,8		0.09%	⁸		0.09%	⁸		0.09%	⁸		0.09%	⁸		0.12%

Total expenses after fees waived and/or reimbursed		0.09%	^7,8		0.09%	⁸		0.09%	⁸		0.09%	⁸		0.09%	⁸		0.09%

Net investment income		0.17%	^7,8		0.14%	⁸		0.17%	⁸		0.25%	⁸		0.20%	⁸		0.24%


Supplemental Data
Net assets, end of period (000)	$	33,507,648		$	37,748,773		$	37,867,084		$	33,350,562		$	26,815,279		$	17,938,932

Amount is less than $0.00005 per share.

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

Amount is greater than $(0.00005) per share.

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

⁷

Annualized

⁸

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.


Financial Highlights (concluded)		BlackRock Cash Funds: Institutional


	Trust
	Period January 1, 2014 to November 10, 2014¹			Year Ended December 31,
	Period January 1, 2014 to November 10, 2014¹			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Net investment income		0.0000	²		0.0001			0.0000	²		0.0001			0.0001
Net realized gain		0.0000	²		0.0000	²		—			—			—

Net increase from investment operations		0.0000			0.0001			0.0000			0.0001			0.0001

Distributions from:³
Net investment income		(0.0000	)⁴		(0.0001	)		(0.0000	)⁴		(0.0001	)		(0.0001	)
Net realized gain		(0.0000	)⁴		(0.0000	)⁴		—			—			—

Total distributions		(0.0000	)		(0.0001	)		(0.0000	)		(0.0001	)		(0.0001	)

Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00


Total Return⁵
Based on net asset value		0.00%	⁶		0.01%			—			0.01%			0.01%


Ratios to Average Net Assets⁷
Total expenses		0.45%	^8,9		0.45%	⁹		0.45%	⁹		0.45%	⁹		0.48%

Total expenses after fees waived and/or reimbursed		0.22%	^8,9		0.28%	⁹		0.34%	⁹		0.29%	⁹		0.31%

Net investment income		0.00%	^8,9		0.00%	⁹		0.00%	⁹		0.00%	⁹		0.01%


Supplemental Data
Net assets, end of period (000)		—	¹	$	547		$	8,215		$	10,640		$	7,776

There were no Trust Shares outstanding from November 11, 2014 through December 31, 2014 and the six months ended June 30, 2015.

Amount is less than $0.00005 per share.

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

⁴

Amount is greater than $(0.00005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

⁸

Annualized.

⁹

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.


Financial Highlights		BlackRock Cash Funds: Prime


	Capital
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Net investment income		0.0005			0.0007			0.0011			0.0018			0.0014			0.0018
Net realized gain		0.0000	¹		0.0000	¹		0.0000	¹		—			—			—

Net increase from investment operations		0.0005			0.0007			0.0011			0.0018			0.0014			0.0018

Distributions from:²
Net investment income		(0.0005	)		(0.0007	)		(0.0011	)		(0.0018	)		(0.0014	)		(0.0018	)
Net realized gain		—			(0.0000	)³		(0.0000	)³		—			—			—

Total distributions		(0.0005	)		(0.0007	)		(0.0011	)		(0.0018	)		(0.0014	)		(0.0018	)

Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00


Total Return⁴
Based on net asset value		0.05%	⁵		0.07%			0.11%			0.18%			0.14%			0.18%


Ratios to Average Net Assets⁶
Total expenses		0.14%	^7,8		0.14%	⁸		0.14%	⁸		0.14%	⁸		0.14%	⁸		0.17%

Total expenses after fees waived and/or reimbursed		014%	^7,8		0.14%	⁸		0.14%	⁸		0.14%	⁸		0.14%	⁸		0.14%

Net investment income		0.10%	^7,8		0.07%	⁸		0.10%	⁸		0.18%	⁸		0.15%	⁸		0.17%


Supplemental Data
Net assets, end of period (000)	$	1,475,876		$	1,747,725		$	1,472,926		$	1,394,794		$	456,657		$	517,988

Amount is less than $0.00005 per share.

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

Amount is greater than $(0.00005) per share.

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

⁷

Annualized.

⁸

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.


Financial Highlights (continued)		BlackRock Cash Funds: Prime


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Net investment income		0.0006			0.0009			0.0013			0.0020			0.0016			0.0020
Net realized gain		0.0000	¹		0.0000	¹		0.0000	¹		—			—			—

Net increase from investment operations		0.0006			0.0009			0.0013			0.0020			0.0016			0.0020

Distributions from:²
Net investment income		(0.0006	)		(0.0009	)		(0.0013	)		(0.0020	)		(0.0016	)		(0.0020	)
Net realized gain		—			(0.0000	)³		(0.0000	)³		—			—			—

Total distributions		(0.0006	)		(0.0009	)		(0.0013	)		(0.0020	)		(0.0016	)		(0.0020	)

Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00


Total Return⁴
Based on net asset value		0.06%	⁵		0.09%			0.13%			0.20%			0.16%			0.20%


Ratios to Average Net Assets⁶
Total expenses		0.12%	^7,8		0.12%	⁸		0.12%	⁸		0.12%	⁸		0.12%	⁸		0.15%

Total expenses after fees waived and/or reimbursed		0.12%	^7,8		0.12%	⁸		0.12%	⁸		0.12%	⁸		0.12%	⁸		0.12%

Net investment income		0.12%	^7,8		0.09%	⁸		0.12%	⁸		0.20%	⁸		0.16%	⁸		0.20%


Supplemental Data
Net assets, end of period (000)	$	10,021,767		$	9,074,064		$	5,269,961		$	3,236,082		$	2,282,923		$	3,570,577

Amount is less than $0.00005 per share.

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

Amount is greater than $(0.00005) per share.

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the years ended December 31, 2010, which includes gross expenses.

⁷

Annualized.

⁸

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.


Financial Highlights (continued)		BlackRock Cash Funds: Prime


	Premium
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Net investment income		0.0004			0.0004			0.0008			0.0015			0.0011			0.0015
Net realized gain		0.0000	¹		0.0000	¹		0.0000	¹		—			—			—

Net increase from investment operations		0.0004			0.0004			0.0008			0.0015			0.0011			0.0015

Distributions from:²
Net investment income		(0.0004	)		(0.0004	)		(0.0008	)		(0.0015	)		(0.0011	)		(0.0015	)
Net realized gain		—			(0.0000	)³		(0.0000	)³		—			—			—

Total distributions		(0.0004	)		(0.0004	)		(0.0008	)		(0.0015	)		(0.0011	)		(0.0015	)

Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00


Total Return⁴
Based on net asset value		0.04%	⁵		0.04%			0.08%			0.15%			0.11%			0.15%


Ratios to Average Net Assets⁶
Total expenses		0.17%	^7,8		0.17%	⁸		0.17%	⁸		0.17%	⁸		0.17%	⁸		0.20%

Total expenses after fees waived and/or reimbursed		0.17%	^7,8		0.17%	⁸		0.17%	⁸		0.17%	⁸		0.17%	⁸		0.17%

Net investment income		0.07%	^7,8		0.04%	⁸		0.07%	⁸		0.16%	⁸		0.11%	⁸		0.14%


Supplemental Data
Net assets, end of period (000)	$	1,240,488		$	1,254,768		$	4,669,369		$	3,481,506		$	1,460,178		$	1,232,743

Amount is less than $0.00005 per share.

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

Amount is greater than $(0.00005) per share.

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

⁷

Annualized.

⁸

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.


Financial Highlights (continued)		BlackRock Cash Funds: Prime


	Select
	Six Months Ended June 30, 2015¹ (Unaudited)			Period January 1, 2014 to December 21, 2014²			Year Ended December 31,
	Six Months Ended June 30, 2015¹ (Unaudited)			Period January 1, 2014 to December 21, 2014²			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Net investment income		0.0000	³		0.0000	³		0.0005			0.0012			0.0008			0.0012
Net realized gain		0.0000	³		0.0000	³		0.0000	³		—			—			—

Net increase from investment operations		0.0000			0.0000			0.0005			0.0012			0.0008			0.0012

Distributions from:⁴
Net investment income		(0.0000	)⁵		(0.0000	)⁵		(0.0005	)		(0.0012	)		(0.0008	)		(0.0012	)
Net realized gain		—			(0.0000	)⁵		(0.0000	)⁵		—			—			—

Total distributions		(0.0000	)		(0.0000	)		(0.0005	)		(0.0012	)		(0.0008	)		(0.0012	)

Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00


Total Return⁶
Based on net asset value		0.00%	⁷		0.00%	⁷		0.05%			0.12%			0.09%			0.12%


Ratios to Average Net Assets⁸
Total expenses		0.22%	^9,10		0.22%	^9,10		0.22%	¹⁰		0.22%	¹⁰		0.22%	¹⁰		0.25%

Total expenses after fees waived and/or reimbursed		0.20%	^9,10		0.20%	^9,10		0.20%	¹⁰		0.20%	¹⁰		0.20%	¹⁰		0.20%

Net investment income		0.05%	^9,10		0.00%	^9,10		0.04%	¹⁰		0.12%	¹⁰		0.08%	¹⁰		0.12%


Supplemental Data
Net assets, end of period (000)		—	¹		—	²	$	90		$	10,454		$	69,779		$	80,614

There were no Select Shares outstanding from January 1, 2015 through January 19, 2015, January 21, 2015 through February 17, 2015, February 20, 2015 through March 17, 2015, March 20, 2015 through April 19, 2015, April 22, 2015 through May 17, 2015, May 20, 2015 through June 18, 2015 and June 22, 2015 through June 30, 2015.

There were no Select Shares outstanding from November 11, 2014 through November 17, 2014, November 18, 2014 through December 18, 2014 and December 22, 2014 through December 31, 2014.

Amount is less than $0.00005 per share.

⁴

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

⁵

Amount is greater than $(0.00005) per share.

⁶

Where applicable, assumes the reinvestment of distributions.

⁷

Aggregate total return.

⁸

⁹

Annualized.

¹⁰

Includes the Fund’s share of the Master Portfolio’s annualized allocated fees waived of 0.03%.


Financial Highlights (continued)		BlackRock Cash Funds: Prime


	SL Agency
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Net investment income		0.0008			0.0012			0.0016			0.0023			0.0019			0.0023
Net realized gain		0.0000	¹		0.0000	¹		0.0000	¹		—			—			—

Net increase from investment operations		0.0008			0.0012			0.0016			0.0023			0.0019			0.0023

Distributions from:²
Net investment income		(0.0008	)		(0.0012	)		(0.0016	)		(0.0023	)		(0.0019	)		(0.0023	)
Net realized gain		—			(0.0000	)³		(0.0000	)³		—			—			—

Total distributions		(0.0008	)		(0.0012	)		(0.0016	)		(0.0023	)		(0.0019	)		(0.0023	)

Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00


Total Return⁴
Based on net asset value		0.08%	⁵		0.12%			0.16%			0.23%			0.19%			0.23%


Ratios to Average Net Assets⁶
Total expenses		0.09%	^7,8		0.09%	⁸		0.09%	⁸		0.09%	⁸		0.09%	⁸		0.12%

Total expenses after fees waived		0.09%	^7,8		0.09%	⁸		0.09%	⁸		0.09%	⁸		0.09%	⁸		0.09%

Net investment income		0.15%	^7,8		0.12%	⁸		0.15%	⁸		0.23%	⁸		0.19%	⁸		0.22%


Supplemental Data
Net assets, end of period (000)	$	10,317,532		$	10,615,765		$	5,689,192		$	5,877,464		$	4,830,517		$	3,696,051

Amount is less than $0.00005 per share.

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

Amount is greater than $(0.00005) per share.

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

⁷

Annualized.

⁸

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.


Financial Highlights (concluded)		BlackRock Cash Funds: Prime


	Trust
	Period January 1, 2014 to November 10, 2014¹			Year Ended December 31,
	Period January 1, 2014 to November 10, 2014¹			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Net investment income		0.0000	²		0.0001			0.0000	²		0.0000	²		0.0001
Net realized gain		0.0000	²		0.0000	²		—			—			—

Net increase from investment operations		0.0000			0.0001			0.0000			0.0000			0.0001

Distributions from:³
Net investment income		(0.0000	)⁴		(0.0001	)		(0.0000	)⁴		(0.0000	)⁴		(0.0001	)
Net realized gain		(0.0000	)⁴		(0.0000	)⁴		—			—			—

Total distributions		(0.0000	)		(0.0001	)		(0.0000	)		(0.0000	)		(0.0001	)

Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00


Total Return⁵
Based on net asset value		0.00%	⁶		0.01%			0.00%			0.00%			0.01%


Ratios to Average Net Assets⁷
Total expenses		0.45%	^8,9		0.45%	⁹		0.45%	⁹		0.45%	⁹		0.48%

Total expenses after fees waived and/or reimbursed		0.20%	^8,9		0.24%	⁹		0.32%	⁹		0.28%	⁹		0.29%

Net investment income		0.00%	^8,9		0.00%	⁹		0.00%	⁹		0.01%	⁹		0.01%


Supplemental Data
Net assets, end of period (000)		—	¹	$	8,086		$	21,702		$	29,657		$	37,044

There were no Trust Shares outstanding from November 11, 2014 through December 31, 2014 and the six months ended June 30, 2015.

Amount is less than $0.00005 per share.

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

⁴

Amount is greater than $(0.00005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

⁸

Annualized.

⁹

Includes the Fund’s share of the Master Portfolio’s annualized allocated fees waived of 0.03%.


Financial Highlights		BlackRock Cash Funds: Treasury


	Capital
	Period January 1, 2014 to November 10, 2014¹			Year Ended December 31,
	Period January 1, 2014 to November 10, 2014¹			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Net investment income		—			0.0001			0.0002			0.0004			0.0007
Net realized gain		0.0000	²		0.0000	²		—			—			—

Net increase from investment operations		0.0000			0.0001			0.0002			0.0004			0.0007

Distributions from:³
Net investment income		—			(0.0001	)		(0.0002	)		(0.0004	)		(0.0007	)
Net realized gain		(0.0000	)⁴		(0.0000	)⁴		—			—			—

Total dividends and distributions		(0.0000	)		(0.0001	)		(0.0002	)		(0.0004	)		(0.0007	)

Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00


Total Return⁵
Based on net asset value		0.00%	⁶		0.01%			0.02%			0.04%			0.07%


Ratios to Average Net Assets⁷
Total expenses		0.14%	^8,9		0.14%	¹⁰		0.14%	¹⁰		0.14%	⁹		0.17%

Total expenses after fees waived and/or reimbursed		0.14%	^8,9		0.12%	¹⁰		0.13%	¹⁰		0.10%	⁹		0.12%

Net investment income		0.07%	^8,9		0.00%	¹⁰		0.02%	¹⁰		0.01%	⁹		0.06%


Supplemental Data
Net assets, end of period (000)		—	¹	$	715		$	273,121		$	18,370		$	139,657

There were no Capital Shares outstanding from November 11, 2014 through December 31, 2014 and the six months ended June 30, 2015.

Amount is less than $0.00005 per share.

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

⁴

Amount is greater than $(0.00005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

⁸

Annualized.

⁹

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.04%.

¹⁰

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.


Financial Highlights (continued)		BlackRock Cash Funds: Treasury


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Net investment income		—			—			0.0001			0.0002			0.0004			0.0009
Net realized gain		0.0000	¹		0.0000	¹		0.0000	¹		—			—			—

Net increase from investment operations		0.0000			0.0000			0.0001			0.0002			0.0004			0.0009

Distributions from:²
Net investment income		—			—			(0.0001	)		(0.0002	)		(0.0004	)		(0.0009	)
Net realized gain		—			(0.0000	)³		(0.0000	)³		—			—			—

Total distributions		—			(0.0000	)		(0.0001	)		(0.0002	)		(0.0004	)		(0.0009	)

Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00


Total Return⁴
Based on net asset value		0.00%	⁵		0.00%			0.01%			0.02%			0.04%			0.09%


Ratios to Average Net Assets⁶
Total expenses		0.12%	^7,8		0.17%	⁹		0.12%	⁸		0.12%	⁸		0.12%	⁹		0.16%

Total expenses after fees waived and/or reimbursed		0.08%	^7,8		0.06%	⁹		0.10%	⁸		0.11%	⁸		0.11%	⁹		0.11%

Net investment income		—	^7,8		0.00%	⁹		0.01%	⁸		0.02%	⁸		0.03%	⁹		0.08%


Supplemental Data
Net assets, end of period (000)	$	4		$	4		$	4		$	4		$	8,941		$	124,791

Amount is less than $0.00005 per share.

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

Amount is greater than $(0.00005) per share.

⁴

Where applicable, assumes the reinvestment of distributions

⁵

Aggregate total return.

⁶

⁷

Annualized.

⁸

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.

⁹

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.04%.


Financial Highlights (continued)		BlackRock Cash Funds: Treasury


		Premium
		Period December 20, 2012¹		Period January 1, 2010 to July 26, 2010²



Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00

Net investment income		0.0000	³		0.0003
Net realized gain		0.0000	³		—

Net increase from investment operations		0.0000			0.0003

Distributions from:⁴
Net investment income		(0.0000	)⁵		(0.0003	)
Net realized gain		(0.0000	)⁵		—

Total distributions		(0.0000	)		(0.0003	)

Net asset value, end of period	$	1.00		$	1.00


Total Return⁶
Based on net asset value		0.00%	⁷		0.03%	⁷


Ratios to Average Net Assets⁸
Total expenses		0.00%	^9,10		0.20%	^9,10

Total expenses after fees waived		0.00%	^9,10		0.11%	^9,10

Net investment income		0.00%	^9,10		0.05%	^9,10


Supplemental Data
Net assets, end of period (000)		—	¹		—	²

There were no Premium Shares outstanding during the fiscal years ended December 31, 2012, December 31, 2013, December 31, 2014 and the six months ended June 30, 2015, except for December 20, 2012.

There were no Premium Shares outstanding from July 27, 2010 through December 31, 2010 and during the fiscal year ended December 31, 2011.

Amount is less than $0.00005 per share.

⁴

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

⁵

Amount is greater than $(0.00005) per share.

⁶

Where applicable, assumes the reinvestment of distributions.

⁷

Aggregate total return.

⁸

Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the period ended July 26, 2010, which includes gross expenses.

⁹

Annualized.

¹⁰

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.


Financial Highlights (continued)		BlackRock Cash Funds: Treasury


	Select
	Period January 1, 2014 to December 22, 2014¹			Year Ended December 31,
	Period January 1, 2014 to December 22, 2014¹			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Net investment income		—			0.0001			0.0000	²		0.0003			0.0003
Net realized gain		0.0000	²		0.0000	²		—			—			—

Net increase from investment operations		0.0000			0.0001			0.0000			0.0003			0.0003

Distributions from:³
Net investment income		—			(0.0001	)		(0.0000	)⁴		(0.0003	)		(0.0003	)
Net realized gain		(0.0000	)⁴		(0.0000	)⁴		—			—			—

Total Distributions		(0.0000	)		(0.0001	)		(0.0000	)		(0.0003	)		(0.0003	)

Net asset value, end of period		1.00		$	1.00		$	1.00		$	1.00		$	1.00


Total Return⁵
Based on net asset value		0.00%	⁶		0.01%			0.00%			0.03%			0.03%


Ratios to Average Net Assets⁷
Total expenses		0.21%	^8,9		0.21%	⁹		0.22%	¹⁰		0.21%	⁹		0.25%

Total expenses after fees waived and/or reimbursed		0.06%	^8,9		0.09%	⁹		0.15%	¹⁰		0.08%	⁹		0.12%

Net investment income		0.00%	^8,9		0.00%	⁹		0.00%	¹⁰		0.00%	⁹		0.04%


Supplemental Data
Net assets, end of period (000)		—	¹	$	10,398		$	10,543		$	13,119		$	288

There were no Select Shares outstanding from December 22, 2014 through December 31, 2014 and the six months ended June 30, 2015.

Amount is less than $0.00005 per share.

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

⁴

Amount is greater than $(0.0005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

⁸

Annualized.

⁹

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.04%.

¹⁰

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.


Financial Highlights (continued)		BlackRock Cash Funds: Treasury


	SL Agency
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Net investment income		0.0000	¹		—			0.0002			0.0006			0.0005			0.0011
Net realized gain		0.0000	¹		0.0000	¹		0.0000	¹		—			—			—

Net increase from investment operations		0.0000			0.0000			0.0002			0.0006			0.0005			0.0011

Distributions from:²
Net investment income		(0.0000	)³		—			(0.0002	)		(0.0006	)		(0.0005	)		(0.0011	)
Net realized gain		—			(0.0000	)³		(0.0000	)³		—			—			—

Total distributions		(0.0000	)		(0.0000	)		(0.0002	)		(0.0006	)		(0.0005	)		(0.0011	)

Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00


Total Return⁴
Based on net asset value		0.00%	⁵		0.00%			0.02%			0.06%			0.05%			0.12%


Ratios to Average Net Assets⁶
Total expenses		0.09%	^7,8		0.08%	⁹		0.08%	⁹		0.09%	⁸		0.09%	⁹		0.13%

Total expenses after fees waived and/or reimbursed		0.08%	^7,8		0.06%	⁹		0.07%	⁹		0.09%	⁸		0.08%	⁹		0.08%

Net investment income		0.00%	^7,8		0.00%	⁹		0.01%	⁹		0.06%	⁸		0.03%	⁹		0.11%


Supplemental Data
Net assets, end of period (000)	$	5,215,900		$	2,385,787		$	1,548,187		$	1,525,904		$	682,865		$	1,457,943

Amount is less than $0.00005 per share.

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

Amount is greater than $(0.00005) per share.

⁴

Where applicable, assumes the reinvestment of distributions

⁵

Aggregate total return.

⁶

⁷

Annualized.

⁸

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.

⁹

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.04%.


Financial Highlights (concluded)		BlackRock Cash Funds: Treasury


	Trust
	Period January 1, 2014 to November 10, 2014¹			Year Ended December 31,
	Period January 1, 2014 to November 10, 2014¹			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Net investment income		—			0.0001			0.0000	²		0.0003			0.0002
Net realized gain		0.0000	²		0.0000	²		—			—			—

Net increase from investment operations		0.0000			0.0001			0.0000			0.0003			0.0002

Distributions from:³
Net investment income		—			(0.0001	)		(0.0000	)⁴		(0.0003	)		(0.0002	)
Net realized gain		(0.0000	)⁴		(0.0000	)⁴		—			—			—

Total Distributions		(0.0000	)		(0.0001	)		(0.0000	)		(0.0003	)		(0.0002	)

Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00


Total Return⁵
Based on net asset value		0.00%	⁶		0.01%			0.00%			0.03%			0.02%


Ratios to Average Net Assets⁷
Total expenses		0.44%	^8,9		0.44%	⁹		0.45%	¹⁰		0.45%	⁹		0.48%

Total expenses after fees waived and/or reimbursed		0.06%	^8,9		0.09%	⁹		0.15%	¹⁰		0.10%	⁹		0.16%

Net investment income		0.00%	^8,9		0.00%	⁹		0.00%	¹⁰		0.00%	⁹		0.02%


Supplemental Data
Net assets, end of period (000)		—	¹	$	25,914		$	15,407		$	23,597		$	12,999

There were no Trust Shares outstanding from November 11, 2014 through December 31, 2014 and the six months ended June 30, 2015.

Amount is less than $0.00005 per share.

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

⁴

Amount is greater than $(0.0005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

⁸

Annualized.

⁹

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.04%.

¹⁰

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.


Notes to Financial Statements (Unaudited)				BlackRock Funds III

1. Organization:


Fund Name	Herein Referred To As	Diversification Classification
BlackRock Cash Funds: Institutional	Institutional		Diversified
BlackRock Cash Funds: Prime	Prime		Diversified
BlackRock Cash Funds: Treasury	Treasury		Diversified

Each Fund seeks to achieve its investment objective by investing all of its assets in a corresponding series of the Master Investment Portfolio (“MIP”): Money Market Master Portfolio, Prime Money Market Master Portfolio and Treasury Money Market Master Portfolio (each, a “Master Portfolio”) and together, (the Master Portfolios”). MIP is an affiliate of the Trust. Each Master Portfolio has the same investment objective and strategies as its corresponding Fund. The value of each Fund’s investment in its corresponding Master Portfolio reflects the Fund’s proportionate interest in the net assets of the Master Portfolio. The performance of the Funds is directly affected by the performance of the Master Portfolios. At June 30, 2015, the percentage of the Master Portfolio owned by the corresponding Fund was 97.7% for Institutional, 95.5% for Prime and 83.0% for Treasury. As such, the financial statements of the Master Portfolio, including the Schedules of Investments, are included elsewhere in this report and should be read in conjunction with the Funds’ financial statements.

Each Fund offers multiple classes of shares. All classes of shares have identical voting, dividend, liquidation and other rights and are subject to the same terms and conditions. The Aon Captives Shares also bear certain expenses related to the distribution of such shares. The Aon Captives Shares have exclusive voting rights with respect to matters relating to their distribution expenditures. The Boards of Trustees of the Funds and Boards of Directors of the Master Portfolios are referred to throughout this report as the “Board of Directors” or the “Board” and the members are referred to as “Directors.”

2. Significant Accounting Policies:

The Funds’ 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 and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. The following is a summary of significant accounting policies followed by the Trust:

Valuation: The Funds’ policy is to fair value its financial instruments at market value. Each Fund records its investment in the corresponding Master Portfolio at fair value based on the Fund’s proportionate interest in the net assets of the respective Master Portfolio. Valuation of securities held by the Master Portfolios is discussed in Note 2 of the Master Portfolios’ Notes to Financial Statements, which are included elsewhere in this report.

Investment Transactions and Investment Income: For financial reporting purposes, contributions to and withdrawals from the Master Portfolio are accounted on a trade date basis. The Funds record daily their proportionate share of the Master Portfolio’s income, expenses and realized and unrealized gains and losses. In addition, the Funds accrue their own expenses. Income, expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.

Distributions: Distributions from net investment income are declared daily and paid monthly. Distributions of capital gains are recorded on the ex-dividend date. The character and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP.

Other: Expenses directly related to a Fund or its classes are charged to that Fund or the applicable class. Other operating expenses shared by several funds, including other funds managed by BlackRock Fund Advisors (the “Manager” or “BFA”), the investment advisor to the Master Portfolios, are prorated among those funds on the basis of relative net assets or other appropriate methods. Expenses directly related to the Funds and other shared expenses prorated to the Funds are allocated daily to each class based on its relative net assets or other appropriate methods.

The Funds have an arrangement with their custodian whereby fees may be reduced by credits earned on uninvested cash balances, which, if applicable, are shown as fees paid indirectly in the Statements of Operations. The custodian imposes fees on overdrawn cash balances, which can be offset by accumulated credits earned or may result in additional custody charges.

3. Administration Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock, Inc. (“BlackRock”) for 1940 Act purposes.

The Trust entered into an Administration Agreement with BlackRock Advisors, LLC (“BAL”), which has agreed to provide general administration services (other than investment advice and related portfolio activities). BAL, in consideration thereof, has agreed to bear all of the Funds’ ordinary operating expenses, excluding, generally, investment advisory fees, distribution fees, brokerage and other expenses related to the execution of portfolio transactions,



BLACKROCK FUNDS III	JUNE 30, 2015	31


Notes to Financial Statements (continued)		BlackRock Funds III

extraordinary expenses and certain other expenses which are borne by the Funds. BAL is entitled to receive for these administration services an annual fee based on the average daily net assets of each Fund as follows:


	Institutional			Prime			Treasury
Aon Captives		0.05%			N/A			N/A
Capital		0.07%	¹		0.07%			0.07%	¹
Institutional		0.05%			0.05%			0.05%
Premium		0.10%	¹		0.10%			0.10%	¹
Select		0.15%			0.15%	¹		0.15%	¹
SL Agency		0.02%			0.02%			0.02%
Trust		0.38%	¹		0.38%	¹		0.38%	¹

With no shares outstanding as of June 30, 2015.

For the six months ended June 30, 2015, the administration fees, which are included in administration — class specific in the Statements of Operations, for each class of each Fund are as follows:


	Institutional			Prime			Treasury
Aon Captives	$	1,984			N/A			N/A
Capital		—	¹	$	688,018			—	¹
Institutional	$	767,849		$	2,133,199		$	6
Premium		—	¹	$	625,677			—	¹
Select	$	33		$	850	¹		—	¹
SL Agency	$	3,817,556		$	1,054,386		$	198,217
Trust		—	¹		—	¹	$	2	¹

With no shares outstanding as of June 30, 2015.

From time to time, BAL may waive such fees in whole or in part. Any such waiver will reduce the expenses of the Funds and, accordingly, have a favorable impact on its performance. BAL may delegate certain of its administration duties to sub-administrators.

BAL contractually agreed to waive a portion of its administration fees for the Select Shares through April 30, 2016. After giving effect to such contractual waiver, the administration fees for the Select Shares will be 0.13%. These amounts are included in fees waived by the administrator — class specific in the Statements of Operations.

The fees and expenses of the Trust’s trustees who are not “interested persons” of the Trust, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and the Trust’s independent registered public accounting firm (together, the “independent expenses”) are paid directly by the Funds. BAL has contractually agreed to provide an offsetting credit against the administration fees paid by the Funds in an amount equal to the independent expenses through April 30, 2016. These amounts are included in fees reimbursed by the administrator in the Statements of Operations.

BAL voluntarily agreed to waive administration fees to enable the Funds to maintain minimum levels of daily net investment income. These amounts are reported in the Statements of Operations as fees waived by the administrator — class specific. BAL may discontinue the waiver or reimbursement at any time.

For the six months ended June 30, 2015, BAL waived the administration fees, for the funds as follows:


	Institutional		Prime		Treasury
Aon Captives		N/A		N/A		N/A
Capital		—		—		N/A
Institutional		—		—	$	5
Premium		—		—		—
Select	$	4	$	113		N/A
SL Agency		—		—	$	90,815
Trust		N/A		N/A	$	2

As of June 30, 2015, the only eligible investors for the SL Agency Shares of the Funds are investment companies for which (i) BFA, BAL, or an affiliate provides investment advisory or administration services, or (ii) BlackRock Institutional Trust Company, N.A. (“BTC”) acts as securities lending agent and which have directed BTC on their behalf to invest securities lending cash collateral in the Funds. Affiliated shareholders in the SL Agency Shares of the Funds represent a significant portion of the outstanding shares and net assets of Institutional, Prime and Treasury.

The Trust, on behalf of the Funds, entered into a Distribution Agreement with BlackRock Investments, LLC (“BRIL”), an affiliate of BFA, and has adopted a Distribution Plan in accordance with Rule 12b-1 with respect to the Aon Captives Shares. Pursuant to the Distribution Plan and in accordance with Rule 12b-1 under the 1940 Act, Institutional pays BRIL ongoing distribution fees with respect to Aon Captives Shares. The fees are accrued daily and paid monthly at an annual rate of 0.10% based upon the average daily net assets of the Aon Captives Shares. The Capital Shares, Institutional Shares, Premium Shares, Select Shares, SL Agency Shares and Trust Shares of Institutional do not pay any fees for distribution services. The fees paid to BRIL by Institutional are shown as Distribution — Aon Captives in the Statements of Operations.



32	BLACKROCK FUNDS III	JUNE 30, 2015


Notes to Financial Statements (continued)				BlackRock Funds III

Certain officers and/or trustees of the Trust are officers and/or directors of BlackRock or its affiliates.

4. Income Tax Information:

It is the Funds’ 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 their taxable income to their shareholders. Therefore, no federal income tax provision is required.

The Funds file U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Funds’ U.S. federal tax returns remains open for each of the four years ended December 31, 2014. The statutes of limitations on the Funds’ state and local tax returns may remain open for an additional year depending upon the jurisdiction.

Management has analyzed tax laws and regulations and their application to the Funds as of June 30, 2015, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.

5. Principal Risks:

On July 23, 2014, the U.S. Securities and Exchange Commission adopted amendments to money market fund regulations, which structurally change the way that certain money market funds will be required to operate. The compliance period for amendments range between July 2015 and October 2016. When implemented, the changes may affect the Funds’ investment strategies, fees and expenses, portfolio and share liquidity and return potential. The Funds continue to evaluate their strategy to implement the new regulations.

6. Capital Share Transactions:

The number of shares sold, reinvested and redeemed corresponds to the net proceeds from the sale of shares, reinvestment of all distributions and cost of shares redeemed, respectively, since shares are sold and redeemed at $1.00 per share.

Transactions in capital shares for each class were as follows:


Institutional	Six Months Ended June 30, 2015			Year Ended December 31, 2014
Aon Captives
Shares sold		1,095			863
Shares issued in reinvestment of distributions		2			9
Shares redeemed		—			(1,168,184	)

Net increase (decrease)		1,097			(1,167,312	)


Institutional
Shares sold		12,912,905,576			24,174,318,747
Shares issued in reinvestment of distributions		1,145,802			1,530,102
Shares redeemed		(11,751,486,081	)		(24,727,616,848	)

Net increase (decrease)		1,162,565,297			(551,767,999	)


Premium
Shares sold		—			—
Shares issued in reinvestment of distributions		—			—
Shares redeemed		—			—

Net increase (decrease)		—			—


Select
Shares sold					59,051
Shares issued in reinvestment of distributions		10			69
Shares redeemed		(103,187	)		(4,274,228	)

Net decrease		(103,177	)		(4,215,108	)


SL Agency
Shares sold		45,608,153,433			75,649,211,014
Shares issued in reinvestment of distributions		13,630			5,745
Shares redeemed and automatic conversion of shares		(49,850,251,840	)		(75,767,214,636	)

Net decrease		(4,242,084,777	)		(117,997,877	)



BLACKROCK FUNDS III	JUNE 30, 2015	33


Notes to Financial Statements (continued)		BlackRock Funds III


Institutional (concluded)	Six Months Ended June 30, 2015			Year Ended December 31, 2014
Trust
Shares sold		—			491,932
Shares issued in reinvestment of distributions		—			—
Shares redeemed and automatic conversion of shares		—			(1,038,529	)

Net decrease		—			(546,597	)

Total Net Decrease		(3,079,621,560	)		(675,694,893	)


Prime
Capital
Shares sold		13,085,193,884			19,558,369,648
Shares issued in reinvestment of distributions		812,685			747,799
Shares redeemed		(13,357,878,988	)		(19,284,321,993	)

Net increase (decrease)		(271,872,419	)		274,795,454


Institutional
Shares sold		67,926,443,451			90,953,147,912
Shares issued in reinvestment of distributions		2,103,697			2,041,048
Shares redeemed		(66,981,033,296	)		(87,151,135,023	)

Net increase		947,513,852			3,804,053,937


Premium
Shares sold		86,218,799,793			91,004,079,422
Shares issued in reinvestment of distributions		41,348			289,235
Shares redeemed		(86,233,143,081	)		(94,418,933,588	)

Net decrease		(14,301,940	)		(3,414,564,931	)


Select
Shares sold		102,318,637			185,549,826
Shares issued in reinvestment of distributions		278			117
Shares redeemed		(102,318,915	)		(185,639,776	)

Net decrease		—			(89,833	)


SL Agency
Shares sold		5,002,394,750			9,947,000,412
Shares issued in reinvestment of distributions		25			79
Shares redeemed and automatic conversion of shares		(5,300,808,730	)		(5,020,488,361	)

Net increase (decrease)		(298,413,955	)		4,926,512,130


Trust
Shares sold		—			1,137,434
Shares issued in reinvestment of distributions		—			37
Shares redeemed and automatic conversion of shares		—			(9,223,528	)

Net decrease		—			(8,086,057	)

Total Net Increase		362,925,538			5,582,620,700


Treasury
Capital
Shares sold		—			20,717,143
Shares issued in reinvestment of distributions		—			12
Shares redeemed		—			(21,432,458	)

Net decrease		—			(715,303	)



34	BLACKROCK FUNDS III	JUNE 30, 2015


Notes to Financial Statements (concluded)				BlackRock Funds III


Treasury	Six Months Ended June 30, 2015			Year Ended December 31, 2014
Institutional
Shares sold		1,000,000			—
Shares issued in reinvestment of distributions		—			—
Shares redeemed		(1,000,000	)		—

Net increase (decrease)		—			—


Premium
Shares sold		—			—
Shares issued in reinvestment of distributions		—			—
Shares redeemed		—			—

Net increase (decrease)		—			—


Select
Shares sold		—			143,550,647
Shares issued in reinvestment of distributions		—			97
Shares redeemed		—			(153,948,584	)

Net decrease		—			(10,397,840	)


SL Agency
Shares sold		29,135,222,856			52,795,170,781
Shares issued in reinvestment of distributions		583			2,784
Shares redeemed and automatic conversion of shares		(26,305,183,030	)		(51,957,574,256	)

Net increase		2,830,040,409			837,599,309


Trust
Shares sold		—			25,872,237
Shares issued in reinvestment of distributions		—			256
Shares redeemed and automatic conversion of shares		—			(51,786,153	)

Net decrease		—			(25,913,660	)

Total Net Increase		2,830,040,409			800,572,506

7. Subsequent Events:

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

The Board, on behalf of Treasury, has approved an investment policy in order for the Fund to meet the definition of a “government money market fund” under Rule 2a-7 under the Investment Company Act of 1940, as amended. The Board has chosen not to subject Treasury to discretionary or default liquidity fees or temporary suspensions of redemptions due to declines in the Fund’s weekly liquid assets. The Board has also approved an amended investment objective for the Fund. The investment objective for Treasury is to seek current income as is consistent with liquidity and stability of principal. These changes will become effective October 1, 2015.



BLACKROCK FUNDS III	JUNE 30, 2015	35


Master Portfolio Information as of June 30, 2015		Master Investment Portfolio

Money Market Master Portfolio


Portfolio Composition	Percent of Net Assets
Certificates of Deposit		38	%
Commercial Paper		28
Repurchase Agreements		22
Time Deposits		5
U.S. Government Sponsored Agency Obligations		4
Corporate Notes		1
U.S. Treasury Obligations		1
Other Assets Less Liabilities		1

Total		100	%

Prime Money Market Master Portfolio


Portfolio Composition	Percent of Net Assets
Commercial Paper		34	%
Certificates of Deposit		25
Repurchase Agreements		24
Time Deposits		12
Corporate Notes		1
U.S. Treasury Obligations		1
Other Assets Less Liabilities		3

Total		100	%

Treasury Money Market Master Portfolio


Portfolio Composition	Percent of Net Assets
Repurchase Agreements		59	%
U.S. Treasury Obligations		27
Other Assets Less Liabilities		14

Total		100	%



36	BLACKROCK FUNDS III	JUNE 30, 2015

Schedule of Investments June 30, 2015 (Unaudited)

Money Market Master Portfolio

(Percentages shown are based on Net Assets)


Certificates of Deposit	Par (000)		Value
Domestic — 6.2%
Bank of America N.A.:
0.23%, 7/07/15	$	200,000	$	200,000,000
0.27%, 9/02/15		191,800		191,800,000
0.24%, 9/21/15		220,000		220,000,000
0.29%, 10/05/15		186,000		186,000,000
0.28%, 10/13/15		100,000		100,000,000
0.35%, 11/16/15		100,000		100,000,000
State Street Bank & Trust (a):
0.32%, 10/01/15		149,000		149,000,000
0.33%, 10/23/15		215,250		215,250,000
Wells Fargo Bank NA (a):
0.27%, 7/09/15		134,000		134,000,000
0.28%, 7/23/15		50,000		50,000,652
0.31%, 9/08/15		150,000		150,000,000
0.28%, 11/30/15		132,924		132,924,000
0.19%, 12/08/15		102,750		102,750,000
0.32%, 2/12/16		100,000		100,000,000
0.32%, 2/18/16		150,000		150,000,000
0.32%, 4/01/16		177,500		177,500,000

				2,359,224,652
Yankee (b) — 31.5%
Bank of Montreal, Chicago (a):
0.27%, 7/06/15		100,000		100,000,077
0.27%, 7/21/15		150,000		150,000,000
0.26%, 8/07/15		75,000		75,000,000
0.28%, 10/09/15		100,000		100,000,000
0.28%, 10/13/15		100,000		100,000,000
0.29%, 10/13/15		75,000		75,000,000
0.30%, 12/10/15		200,000		200,000,000
0.30%, 1/07/16		140,000		140,000,000
Bank of Nova Scotia, Houston (a):
0.33%, 9/11/15		45,885		45,921,270
0.27%, 10/08/15		150,000		150,000,000
0.28%, 11/06/15		65,000		65,000,000
0.29%, 11/06/15		150,000		150,000,000
0.35%, 3/18/16		75,000		75,000,000
0.34%, 4/15/16		92,000		92,000,000
0.35%, 6/06/16		100,000		100,000,000
Bank of Tokyo Mitsubishi UFJ Ltd. New York:
0.30%, 10/06/15		75,000		75,000,000
0.40%, 1/07/16 (a)		246,000		246,000,000
BNP Paribas SA, New York:
0.36%, 7/07/15 (a)		100,000		100,002,234
0.30%, 9/23/15		265,000		265,000,000
Canadian Imperial Bank of Commerce, New York:
0.15%, 7/01/15		300,000		300,000,000
0.28%, 8/21/15 (a)		48,685		48,684,660
0.25%, 10/19/15 (a)		200,000		200,000,000
0.28%, 10/21/15 (a)		150,000		150,000,000
0.30%, 1/26/16 (a)		97,100		97,100,000
0.33%, 5/23/16 (a)		400,000		400,000,000
0.25%, 6/01/16 (a)		250,000		250,000,000
Credit Agricole Corporate & Investment Bank, New York, 0.30%, 8/03/15		405,000		405,000,000
Credit Industriel et Commercial, New York:
0.39%, 9/03/15		100,000		100,000,000
0.25%, 9/08/15		260,000		260,000,000
0.32%, 9/16/15 (a)		152,250		152,250,000
Mitsubishi UFJ Trust & Banking Corp., New York:
0.25%, 7/02/15		100,000		100,000,000
0.25%, 7/06/15		100,000		100,000,000
0.32%, 8/06/15 (a)		250,000		250,000,000
0.34%, 11/12/15 (a)		50,000		50,000,000
Yankee (b) (concluded)
Mizuho Bank Ltd., New York:
0.26%, 7/13/15		300,000		300,000,000
0.27%, 7/22/15		100,000		100,000,000
0.27%, 8/06/15		150,000		150,000,000
0.26%, 8/24/15		250,000		250,000,000
0.28%, 9/18/15		100,000		100,000,000
0.34%, 10/21/15 (a)		252,000		252,000,000
0.34%, 11/30/15 (a)		100,000		99,999,989
National Bank of Canada, New York (a):
0.30%, 10/20/15		268,500		268,500,000
0.34%, 12/24/15		265,000		265,000,000
Natixis, New York:
0.28%, 7/01/15		400,000		400,000,000
0.27%, 9/09/15		250,000		250,000,000
Norinchukin Bank, New York:
0.28%, 7/02/15		200,000		200,000,000
0.32%, 7/16/15 (a)		206,000		206,000,000
0.25%, 9/08/15		500,000		500,000,000
0.27%, 9/23/15		300,000		300,000,000
0.34%, 10/20/15 (a)		8,500		8,500,000
0.34%, 11/12/15 (a)		100,000		100,000,000
Rabobank Nederland, New York:
0.27%, 8/18/15		135,500		135,500,000
0.28%, 12/21/15 (a)		285,000		285,000,000
0.30%, 1/11/16 (a)		280,000		280,000,000
Royal Bank of Canada, New York (a):
0.28%, 10/14/15		127,900		127,900,000
0.28%, 11/10/15		65,000		65,000,000
0.30%, 3/16/16		200,000		200,000,000
Standard Chartered Bank, New York, 0.30%, 9/11/15		200,000		200,000,000
Sumitomo Mitsui Banking Corp., New York:
0.25%, 7/06/15		130,000		130,000,000
0.33%, 8/25/15 (a)		175,000		175,000,000
Sumitomo Mitsui Trust Bank Ltd., New York:
0.32%, 7/08/15		200,000		200,000,000
0.26%, 9/08/15		220,000		220,000,000
Toronto-Dominion Bank, New York:
0.24%, 7/16/15		75,275		75,275,156
0.30%, 8/10/15		200,000		200,000,000
0.24%, 10/06/15 (a)		50,000		50,000,000
0.27%, 11/10/15 (a)		135,000		135,000,000
0.29%, 1/26/16 (a)		150,000		150,000,000
0.30%, 2/25/16 (a)		100,000		100,000,000
UBS AG, Stamford, 0.25%, 7/31/15		100,000		100,000,000
Westpac Banking Corp., New York, 0.28%, 10/28/15 (a)		150,000		150,000,000

				11,895,633,386
Total Certificates of Deposit — 37.7%				14,254,858,038



Commercial Paper
ABN Amro Funding USA LLC (c):
0.26%, 7/13/15		15,000		14,998,700
0.29%, 9/02/15		170,000		169,913,725
0.27%, 9/08/15		25,000		24,987,062
0.29%, 9/24/15		214,000		213,853,469
ANZ New Zealand International Ltd. (a):
0.30%, 9/08/15		142,500		142,500,000
0.29%, 10/01/15 (d)		150,000		150,000,000
0.30%, 11/05/15 (d)		200,000		200,000,000
0.33%, 6/03/16 (d)		50,000		50,000,000
Atlantic Asset Securitization LLC, 0.27%, 8/17/15 (c)		108,579		108,540,726

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	37

Schedule of Investments (continued)

Money Market Master Portfolio

(Percentages shown are based on Net Assets)


Commercial Paper	Par (000)		Value
Australia & New Zealand Banking Group Ltd., 0.28%, 11/13/15 (a)	$	100,000	$	100,000,000
AutoZone, Inc. (c):
0.40%, 7/06/15		27,600		27,598,467
0.40%, 7/07/15		27,950		27,948,137
0.40%, 7/24/15		40,800		40,789,573
Bank of Nova Scotia (The):
0.26%, 8/03/15 (c)		25,000		24,994,042
0.27%, 8/21/15 (c)		75,000		74,971,844
0.31%, 12/09/15 (a)(d)		185,000		185,000,000
Bedford Row Funding Corp.:
0.30%, 8/05/15 (c)(d)		100,000		99,970,833
0.29%, 10/01/15 (a)(d)		7,000		7,000,000
0.31%, 11/20/15 (a)		24,750		24,750,000
0.32%, 2/05/16 (a)		100,000		100,000,000
0.33%, 2/26/16 (a)		65,000		65,000,000
0.32%, 3/07/16 (a)(d)		50,000		50,000,000
0.34%, 5/10/16 (a)		100,000		100,000,000
Bennington Stark Capital Co. (c):
0.24%, 7/06/15		200,000		199,993,333
0.25%, 7/07/15		100,000		99,995,833
0.25%, 7/24/15		120,000		119,980,833
BNP Paribas SA, New York, 0.03%, 7/01/15 (c)		300,000		300,000,000
Chariot Funding LLC (c):
0.27%, 7/02/15 (d)		73,850		73,849,446
0.28%, 8/27/15		40,000		39,982,267
Ciesco LLC, 0.32%, 11/05/15 (c)		75,000		74,915,333
Collateralized Commercial Paper Co. LLC:
0.30%, 7/01/15 (c)		150,000		150,000,000
0.46%, 10/13/15 (c)		200,000		199,734,222
0.30%, 10/19/15 (c)		119,000		118,890,917
0.36%, 12/07/15 (a)		50,000		50,000,000
Commonwealth Bank of Australia:
0.24%, 7/20/15 (a)		110,000		109,999,756
0.27%, 7/23/15 (a)(d)		100,000		99,999,694
0.22%, 9/29/15 (c)		200,000		199,887,500
0.28%, 10/23/15 (a)		155,000		155,000,000
0.29%, 10/29/15 (a)		72,000		71,997,851
0.26%, 12/02/15 (a)(d)		75,000		75,000,000
0.28%, 2/19/16 (a)		100,000		100,000,000
0.29%, 2/26/16 (a)		150,000		150,000,000
0.29%, 3/29/16 (a)(d)		100,000		100,000,000
0.30%, 3/30/16 (a)		100,000		100,000,000
0.30%, 4/29/16 (a)		48,000		48,000,000
0.34%, 5/20/16 (a)		100,000		99,981,841
Credit Suisse, New York, 0.26%, 9/11/15 (c)		2,000		1,998,960
Deutsche Telekom AG (c):
0.37%, 7/13/15		25,000		24,996,917
0.45%, 7/27/15		150,000		149,951,250
General Electric Capital Corp., 0.25%, 7/27/15 (c)		150,000		149,972,917
HSBC Bank PLC (a):
0.25%, 7/06/15		175,000		175,000,000
0.27%, 10/16/15		219,000		219,000,058
0.28%, 10/23/15 (d)		119,500		119,500,000
0.32%, 2/05/16		200,000		200,000,000
Hyundai Capital America, 0.55%, 7/02/15 (c)		44,100		44,099,326
ING US Funding LLC, 0.25%, 7/06/15 (c)		175,000		174,993,403
Jupiter Securitization Co. LLC, 0.28%, 8/27/15 (c)		45,000		44,980,050
Kellogg Co., 0.40%, 7/08/15 (c)		9,500		9,499,261
Kells Funding LLC, 0.29%, 10/09/15 (a)(d)		150,000		149,995,231
LMA Americas LLC (c):
0.26%, 8/11/15 (d)		114,650		114,616,051
0.27%, 8/20/15		183,900		183,831,712
0.27%, 9/02/15 (d)		70,000		69,966,925
Mondelez International, Inc. (c):
0.42%, 7/06/15		90,000		89,994,806
0.41%, 7/07/15		25,000		24,998,292
Motiva Enterprises LLC, 0.43%, 7/06/15 (c)		45,000		44,997,292
National Australia Bank Ltd. (a):
0.28%, 10/08/15		150,000		150,000,000
0.27%, 11/04/15		200,000		200,000,000
0.29%, 11/04/15 (d)		100,000		100,000,423
0.27%, 11/09/15 (d)		200,000		200,000,000
National Australia Funding Delaware, Inc. (a)(d):
0.28%, 8/11/15		150,000		150,000,000
0.24%, 8/18/15		150,000		149,998,168
Natixis, New York, 0.28%, 8/31/15 (c)		100,000		99,952,556
Nederlandse Waterschapsbank NV, 0.33%, 12/22/15 (a)		50,000		50,000,000
Nissan Motor Acceptance Corp. (c):
0.36%, 7/15/15		50,000		49,993,000
0.37%, 7/20/15		47,500		47,490,724
0.35%, 7/24/15		50,000		49,988,819
Nordea Bank AB (c):
0.24%, 7/06/15		150,000		149,994,896
0.30%, 10/19/15		150,000		149,862,500
Old Line Funding LLC, 0.27%, 7/06/15 (c)		72,951		72,948,264
Skandinaviska Enskilda Banken AB (c):
0.24%, 9/14/15		150,000		149,925,000
0.25%, 9/23/15		250,000		249,854,167
Southern California Edison Co. (c):
0.30%, 7/01/15		25,000		25,000,000
0.30%, 7/09/15 (d)		20,000		19,998,667
0.30%, 7/13/15 (d)		25,000		24,997,500
Sumitomo Mitsui Banking Corp., 0.27%, 7/02/15 (c)		75,000		74,999,437
Sumitomo Mitsui Trust Bank Ltd., 0.25%, 7/06/15 (c)		200,000		199,993,056
Svenska Handelsbanken, Inc., New York, 0.26%, 7/02/15 (c)		150,000		149,998,917
Thunder Bay Funding LLC:
0.27%, 8/03/15 (c)		9,000		8,997,772
0.30%, 12/14/15 (a)		45,000		45,000,000
Toyota Credit Canada Inc., 0.27%, 7/30/15 (c)		55,000		54,988,037
Toyota Motor Credit Corp. (c):
0.25%, 7/30/15		45,000		44,990,937
0.20%, 9/15/15		200,000		199,915,556
Versailles Com Paper LLC (c):
0.25%, 7/20/15		50,000		49,993,403
0.25%, 8/03/15		50,000		49,988,542
0.27%, 9/08/15		25,000		24,987,062
0.27%, 9/17/15		50,000		49,970,750
0.27%, 9/18/15 (d)		50,000		49,970,375
0.27%, 9/22/15		50,000		49,968,875
0.27%, 9/25/15		100,000		99,935,500
Virginia Electric & Power Co., 0.40%, 7/23/15 (c)		10,000		9,997,556
Westpac Banking Corp. (a):
0.27%, 7/30/15 (d)		150,000		150,000,000
0.27%, 3/18/16		112,000		112,000,000
0.28%, 3/18/16		25,000		25,000,000
0.27%, 4/01/16		150,000		150,000,000
Westpac Securities NZ Ltd., London (a)(d):
0.30%, 8/13/15		175,000		175,000,000
0.32%, 5/06/16		50,000		50,000,000
Total Commercial Paper — 28.2%				10,648,118,314

See Notes to Financial Statements.



38	BLACKROCK FUNDS III	JUNE 30, 2015

Schedule of Investments (continued)

Money Market Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Notes	Par (000)		Value
Nederlandse Waterschapsbank NV, 0.37%, 11/04/15 (a)(d)	$	50,000	$	50,016,484
Province of Nova Scotia Canada, 2.38%, 7/21/15		9,167		9,177,486
Svenska Handelsbanken AB, 0.31%, 11/13/15 (a)(d)		295,800		295,800,000
The Toronto-Dominion Bank, 2.20%, 7/29/15 (d)		41,000		41,057,483
Wells Fargo Bank NA, 0.56%, 7/20/15 (a)		49,000		49,006,883
Total Corporate Notes — 1.2%				445,058,336



Time Deposits
Bank of Tokyo-Mitsubishi Ltd., 0.04%, 7/01/15		350,000		350,000,000
Nordea Bank AB, 0.04%, 7/01/15		450,000		450,000,000
Skandinaviska Enskilda Banken AB, 0.04%, 7/01/15		207,000		207,000,000
Svenska Handelsbanken AB, 0.04%, 7/01/15		900,000		900,000,000
Total Time Deposits — 5.1%				1,907,000,000



U.S. Government Sponsored Agency Obligations
Fannie Mae, 0.20%, 1/26/17 (a)		80,000		79,987,158
Federal Farm Credit Bank (a):
0.24%, 2/24/16		79,750		79,771,323
0.23%, 3/29/16		100,000		99,992,463
0.20%, 8/01/16		75,000		74,991,755
0.16%, 10/03/16		74,500		74,481,674
0.28%, 11/21/16		32,000		32,038,485
0.20% 1/30/17		150,000		149,951,739
0.23%, 3/24/17		50,000		50,004,650
0.21%, 3/29/17		100,000		99,983,362
0.22%, 7/13/17		100,000		99,958,652
0.18%, 7/20/17		50,000		49,982,447
0.24%, 9/13/17		115,000		115,000,000
0.22%, 10/27/17		145,000		144,929,584
0.25%, 3/02/18		68,000		67,999,009
Federal Home Loan Bank:
0.08%, 7/31/15 (c)		3,500		3,499,752
0.21%, 9/17/15 (a)		100,000		99,996,679
0.18%, 5/20/16 (a)		90,000		89,987,759
0.19%, 5/27/16 (a)		35,000		34,995,185
Total U.S. Government Sponsored Agency Obligations — 3.8%				1,447,551,676



U.S. Treasury Obligation — 0.8%
U.S. Treasury Bill, 0.27%, 6/23/16 (c)		320,000		319,147,164



Repurchase Agreements
Barclays Capital, Inc., 0.28%, 7/01/15 (Purchased on 6/10/15 to be repurchased at $95,015,517, collateralized by various Corporate Debt Obligations, 0.12% to 7.70%, due 5/01/17 to 10/01/62, original par and fair values of $90,827,241 and $101,650,001, respectively)		95,000		95,000,000
Total Value of Barclays Capital, Inc., (collateral value of $101,650,001)				95,000,000
BNP Paribas Securities Corp., 0.15%, 7/01/15 (Purchased on 10/07/14 - 10/16/14 to be repurchased at $166,183,437, collateralized by various Corporate Debt Obligations and a U.S. Government Sponsored Agency Obligations, 0.10% to 8.38%, due 1/8/16 to 4/25/46, original par and fair values of $574,302,584 and $174,780,057, respectively)		166,000		166,000,000
Total Value of BNP Paribas Securities Corp (collateral value of $174,780,057)				166,000,000
Citigroup Global Markets, Inc., 0.10%, 7/01/15 (Purchased on 9/29/14 to be repurchased at $1,000,764, collateralized by various U.S. Treasury Obligations, 0.38% to 3.63%, due 2/15/16 to 8/15/43, original par and fair values of $1,018,191 and $1,020,001, respectively)		1,000		1,000,000
Citigroup Global Markets, Inc., 0.10%, 7/01/15 (Purchased on 6/30/14 to be repurchased at $100,000,278, collateralized by various U.S. Treasury Obligations, 2.00%, due 1/15/16, original par and fair values of $83,602,200 and $102,000,070, respectively)		100,000		100,000,000
Total Value of Citigroup Global Markets, Inc. (collateral value of $103,020,071)				101,000,000
Credit Suisse Securities (USA) LLC, 0.40%, 7/01/15 (Purchased on 6/30/15 to be repurchased at $961,133,679 collateralized by various Corporate Debt Obligations, 0.00% to 5.00%, due 5/25/23 to 9/28/56, original par and fair values of $1,584,802,874 and $1,201,405,030, respectively)		961,123		961,123,000
Credit Suisse Securities (USA) LLC, 0.40%, 7/07/15 (Purchased on 6/30/15 to be repurchased at $250,019,444, collateralized by various Corporate Debt Obligations, 0.00% to 3.50%, due 10/25/29 to 2/25/55, original par and fair values of $519,586,900 and $312,502,007, respectively)		250,000		250,000,000
Credit Suisse Securities (USA) LLC, 0.64%, 8/04/15 (Purchased on 6/30/15 to be repurchased at $400,000,256 collateralized by various Corporate Debt Obligations, 0.00% to 7.20%, due 2/10/18 to 9/25/58, original par and fair values of $841,123,369 and $500,000,689, respectively) (e)		400,000		400,000,000
Total Value of Credit Suisse Securities (USA) LLC (collateral value of $2,013,907,726)				1,611,123,000
Federal Reserve Bank of New York, 0.07%, 7/01/15 (Purchased on 6/29/15 to be repurchased at $1,500,005,833, collateralized by a U.S. Treasury Obligation, 8.00%, due 11/15/21, original par and fair value of $1,090,913,400 and $1,500,005,925 respectively)		1,500,000		1,500,000,000

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	39

Schedule of Investments (continued)

Money Market Master Portfolio

(Percentages shown are based on Net Assets)


Repurchase Agreements	Par (000)		Value
Federal Reserve Bank of New York, 0.05%, 7/01/15 (Purchased on 6/30/15 to be repurchased at $2,000,002,778, collateralized by a U.S. Treasury Obligation, 3.13%, due 11/15/41, original par and fair value of $1,980,051,300 and $2,000,002,792, respectively)	$	2,000,000	$	2,000,000,000
Total Value of Federal Reserve Bank of New York (collateral value of $3,500,008,717)				3,500,000,000
Goldman Sachs & Co., 0.16%, 7/01/15 (Purchased on 6/24/15 to be repurchased at $563,017,516, collateralized by various U.S. Government Sponsored Agency Obligations, 0.00% to 7.46%, due 2/25/18 to 11/25/46, original par and fair values of $12,125,821,264 and $607,521,903, respectively)		563,000		563,000,000
Goldman Sachs & Co., 0.16%, 7/02/15 (Purchased on 6/25/15 to be repurchased at $34,001,058, collateralized by various U.S. Government Sponsored Agency Obligations, 1.36% to 6.01%, due 7/20/43 to 8/16/52, original par and fair values of $354,753,257 and $36,576,135, respectively)		34,000		34,000,000
Total Value of Goldman Sachs & Co. (collateral value of $644,098,038)				597,000,000
HSBC Securities (USA) Inc., 0.17%, 7/01/15 (Purchased on 8/01/14 - 10/07/14 to be repurchased at $100,129,247, collateralized by various Corporate Debt Obligations, 3.75% to 8.25%, due 01/15/17 to 09/15/25, original par and fair values of $99,249,000 and $105,004,913, respectively)		100,000		100,000,000
HSBC Securities (USA) Inc., 0.25%, 7/01/15 (Purchased on 3/11/14 -8/04/14 to be repurchased at $170,448,542, collateralized by various Corporate Debt Obligations, 0.47% to 5.46%, due 6/15/16 to 1/15/49, original par and fair values of $183,177,124 and $178,504,092, respectively)		170,000		170,000,000
Total Value of HSBC Securities (USA) Inc. (collateral value of $283,509,005)				270,000,000
J.P. Morgan Securities LLC, 0.40%, 7/01/15 (Purchased on 3/25/13 to be repurchased at $60,552,000, collateralized by various Corporate Debt Obligations, 0.24% to 8.45%, due 12/25/29 to 4/12/49, original par and fair values of $199,663,428 and $75,002,203, respectively)		60,000		60,000,000
J.P. Morgan Securities LLC, 0.47%, 8/04/15 (Purchased on 6/30/15 to be repurchased at $150,070,500, collateralized by various Corporate Debt Obligations and various U.S. Government Sponsored Agency Obligations, 0.00% to 7.46%, due 9/25/20 to 12/20/54, original par and fair values of $1,962,823,169 and $160,503,207, respectively) (e)		150,000		150,000,000
J.P. Morgan Securities LLC, 0.55%, 8/04/15 (Purchased on 6/30/15 to be repurchased at $150,082,500, collateralized by various Corporate Debt Obligations, 0.00% to 4.74%, due 4/15/26 to 9/1/42, original par and fair values of $278,576,007 and $187,501,070, respectively) (e)		150,000		150,000,000
J.P. Morgan Securities LLC, 0.58%, 8/19/15 (Purchased on 5/19/15 to be repurchased at $126,186,760, collateralized by various Corporate Debt Obligations, 0.32% to 9.19%, due 1/19/25 to 5/25/47, par and fair values of $557,784,938 and $157,502,734, respectively)		126,000		126,000,000
J.P. Morgan Securities LLC, 0.66%, 9/29/15 (Purchased on 6/30/14 to be repurchased at $150,253,000, collateralized by various Corporate Debt Obligations, 0.00% to 6.42%, due 5/25/23 to 3/9/47, original par and fair values of $244,802,730 and $187,503,099, respectively) (e)		150,000		150,000,000
J.P. Morgan Securities LLC, 0.78%, 9/29/15 (Purchased on 6/30/14 to be repurchased at $200,398,667, collateralized by various Corporate Debt Obligations, 0.41% to 6.12%, due 11/25/17 to 7/25/48, original par and fair values of $1,531,655,769 and $249,916,753, respectively) (e)		200,000		200,000,000
Total Value of J.P. Morgan Securities LLC (collateral value of $1,017,929,066)				836,000,000
Merrill Lynch, Pierce, Fenner & Smith, Inc., 0.16%, 7/01/15 (Purchased on 6/24/15 to be repurchased at $262,008,151, collateralized by various U.S. Government Sponsored Agency Obligations, 0.00% to 7.51%, due 6/25/23 to 4/20/65, original par and fair values of $8,132,680,486 and $285,028,731, respectively)		262,000		262,000,000
Merrill Lynch, Pierce, Fenner & Smith, Inc., 0.11%, 7/01/15 (Purchased on 6/30/15 to be repurchased at $1,000,003, collateralized by a U.S. Treasury Obligation, 0.00%, due 11/15/18, par and fair value of $1,062,246 and $1,020,000, respectively)		1,000		1,000,000
Total Value of Merrill Lynch, Pierce, Fenner & Smith, Inc. (collateral value of $286,048,731)				263,000,000
RBC Capital Markets LLC, 0.12%, 7/01/15 (Purchased on 6/30/15 to be repurchased at $180,000,600, collateralized by various Corporate Debt Obligations various U.S. Government Sponsored Agency Obligations, 0.00% to 9.13%, due 9/11/15 to 12/31/49, original par and fair values of $234,181,285 and $193,471,537, respectively)		180,000		180,000,000
RBC Capital Markets LLC, 0.13%, 7/01/15 (Purchased on 3/28/14 to be repurchased at $72,119,600, collateralized by various U.S. Government Sponsored Agency Obligations, 0.00% to 6.25%, due 8/03/15 to 6/15/45, original par and fair values of $74,476,708 and $75,600,000, respectively)		72,000		72,000,000
RBC Capital Markets LLC, 0.13%, 7/01/15 (Purchased on 6/12/14 to be repurchased at $51,070,720, collateralized by various Corporate Debt Obligations, 0.00% to 10.20%, due 9/26/16 to 6/1/45, original par and fair values of $57,040,522 and $53,550,001, respectively)		51,000		51,000,000
Total Value of RBC Capital Markets LLC (collateral value of $322,621,538)				303,000,000

See Notes to Financial Statements.



40	BLACKROCK FUNDS III	JUNE 30, 2015

Schedule of Investments (concluded)

Money Market Master Portfolio

(Percentages shown are based on Net Assets)


Repurchase Agreements	Par (000)		Value
Wells Fargo Securities LLC, 0.50%, 7/14/15 (Purchased on 4/15/15 to be repurchased at $93,131,269, collateralized by various Corporate Debt Obligations, 0.96% to 9.38%, due 12/1/15 to 6/15/67, original par and fair values of $91,980,117 and $97,665,751, respectively)	$	93,015	$	93,015,000
Wells Fargo Securities LLC, 0.44%, 8/03/15 (Purchased on 5/5/15 to be repurchased at $150,165,000, collateralized by various Corporate Debt Obligations, 0.00%, due 7/1/15 to 9/8/15, original par and fair values of $157,661,191 and $157,500,001, respectively)		150,000		150,000,000
Wells Fargo Securities, LLC, 0.25%, 7/01/15 (Purchased on 8/5/14 to be repurchased at $320,733,333, collateralized by various Corporate Debt Obligations, 0.37% to 8.89%, due 4/15/16 to 4/17/52, original par and fair values of $698,194,690 and $342,400,000, respectively)		320,000		320,000,000
Wells Fargo Securities, LLC, 0.44%, 8/04/15 (Purchased on 5/6/15 to be repurchased at $140,154,000, collateralized by various Corporate Debt Obligations, 0.01 to 10.75%, due 7/15/15 to 2/15/98, original par and fair values of $139,225,435 and $147,000,001, respectively)		140,000		140,000,000
Wells Fargo Securities, LLC, 0.68%, 9/14/15 (Purchased on 6/15/15 to be repurchased at $110,189,078, collateralized by various Corporate Debt Obligations, 0.00% to 5.77%, due 1/17/20 to 8/27/51, original par and fair values of $368,361,670 and $133,968,183, respectively)		110,000		110,000,000
Total Value of Wells Fargo Securities, LLC (collateral value of $878,533,936)				813,015,000
Total Repurchase Agreements — 22.6%				8,555,138,000
*Total Investments (Cost — $37,576,871,528) — 99.4%**				37,576,871,528
Other Assets Less Liabilities — 0.6%				208,320,384

Net Assets — 100.0%			$	37,785,191,912

Notes to Schedule of Investments

Cost for federal income tax purposes.

(a)

Variable rate security. Rate shown is as of report date.

(b)

Issuer is a U.S. branch of foreign domiciled bank.

(c)

Rates shown are discount rates or a range of discount rates at the time of purchase.

(d)

(e)

Variable rate security. Rate shown is as of report date and maturity shown is the date the principal owed can be recovered through demand.

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that the Master Portfolio has the ability to access

•

As of June 30, 2015, the following table summarizes the Master Portfolio’s investments categorized in the disclosure hierarchy:


	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Short-Term Securities¹		—	$	37,576,871,528		—	$	37,576,871,528
¹ See above Schedule of Investments for values in each security type.

The Master Portfolio may hold assets in which the fair value approximates the carrying amount for financial statement purposes. As of June 30, 2015, cash of $203,709,944 is categorized as Level 1 within the disclosure hierarchy.

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	41

Schedule of Investments June 30, 2015 (Unaudited)

Prime Money Market Master Portfolio

(Percentages shown are based on Net Assets)


Certificates of Deposit	Par (000)		Value
Domestic — 2.3%
State Street Bank & Trust, 0.32%, 10/01/15 (a)	$	50,000	$	50,000,000
Wells Fargo Bank NA (a):
0.27%, 7/01/15		75,000		75,000,000
0.27%, 7/09/15		100,000		100,000,000
0.30%, 7/23/15		62,000		62,000,809
0.19%, 12/08/15		100,000		100,000,000
0.32%, 2/12/16		100,000		100,000,000
0.32%, 4/01/16		80,000		80,000,000

				567,000,809
Euro — 0.3%
Australia & New Zealand Banking Group Ltd., 0.27%, 10/19/15		62,000		62,000,000
Yankee (b) — 22.9%
Bank of Montreal, Chicago (a):
0.27%, 7/17/15		87,000		87,000,000
0.26%, 8/07/15		75,000		75,000,000
0.28%, 10/09/15		100,000		100,000,000
0.29%, 10/13/15		75,000		75,000,000
0.30%, 1/07/16		75,000		75,000,000
Bank of Nova Scotia, Houston (a):
0.28%, 11/06/15		31,000		31,000,000
0.29%, 11/06/15		50,000		50,000,000
0.41%, 2/29/16		75,000		75,040,607
Bank of Tokyo-Mitsubishi UFJ, Ltd., New York:
0.26%, 9/23/15		100,000		100,000,000
0.35%, 11/13/15		100,000		100,000,000
0.34%, 11/23/15 (a)		55,000		55,000,000
Canadian Imperial Bank of Commerce, New York (a):
0.27%, 8/21/15		25,000		24,999,825
0.25%, 10/19/15		100,000		100,000,000
0.30%, 1/26/16		125,000		125,000,000
0.30%, 2/10/16		150,000		150,000,000
0.25%, 6/01/16		200,000		200,000,000
Credit Agricole CIB, New York, 0.30%, 8/03/15		100,000		100,000,000
Credit Industriel et Commercial, New York, 0.32%, 9/16/15 (a)		78,750		78,750,000
Mitsubishi UFJ Trust & Banking Corp., New York:
0.25%, 7/02/15		50,000		50,000,000
0.25%, 7/06/15		200,000		200,000,000
0.32%, 8/06/15 (a)		50,000		50,000,000
0.34%, 11/12/15 (a)		25,000		25,000,000
Mizuho Bank Ltd., New York:
0.27%, 7/24/15		175,000		175,000,000
0.26%, 8/24/15		50,000		50,000,000
0.28%, 9/18/15		150,000		150,000,000
National Bank of Canada, New York (a):
0.29%, 8/17/15		100,000		100,000,000
0.30%, 10/20/15		60,000		60,000,000
0.34%, 12/24/15		74,300		74,300,000
Natixis, New York:
0.28%, 7/01/15		200,000		200,000,000
0.27%, 9/09/15		50,000		50,000,000
Norinchukin Bank, New York, 0.34%, 11/12/15 (a)		50,000		50,000,000
Oversea-Chinese Banking Corp. Ltd., New York:
0.21%, 9/04/15		100,000		100,000,000
0.23%, 10/02/15		200,000		200,000,000
0.30%, 10/28/15		50,000		50,000,000
0.30%, 11/16/15		100,000		100,000,000
Rabobank Nederland, New York (a):
0.29%, 7/17/15		100,000		100,000,000
0.27%, 11/09/15		100,000		100,000,000
Yankee (b) (concluded)
Rabobank Nederland, New York (a) (concluded):
0.28%, 12/21/15	$	120,000	$	120,000,000
0.28%, 1/11/16		100,000		100,000,000
0.30%, 1/11/16		110,000		110,000,000
0.31%, 2/22/16		75,000		75,000,000
Royal Bank of Canada, New York (a):
0.27%, 9/03/15		100,000		100,000,000
0.29%, 9/10/15		115,000		115,000,000
0.28%, 10/14/15		50,000		50,000,000
0.28%, 11/10/15		70,000		70,000,000
0.30%, 3/16/16		50,000		50,000,000
Sumitomo Mitsui Banking Corp., New York:
0.31%, 7/02/15 (a)		175,000		175,000,000
0.25%, 7/06/15		100,000		100,000,000
0.30%, 7/06/15 (a)		100,000		100,000,158
0.33%, 8/25/15 (a)		125,000		125,000,000
0.27%, 9/18/15		100,000		100,000,000
Sumitomo Mitsui Trust & Banking Ltd., New York, 0.30%, 10/05/15		150,000		150,000,000
Toronto-Dominion Bank, New York:
0.26%, 8/04/15 (a)		50,000		50,000,000
0.27%, 8/06/15		50,000		50,000,000
0.30%, 8/10/15		100,000		100,000,000
0.24%, 10/06/15 (a)		50,000		50,000,000
0.30%, 2/25/16 (a)		50,000		50,000,000
UBS AG, Stamford, 0.25%, 7/31/15		200,000		200,000,000

				5,526,090,590
Total Certificates of Deposit — 25.5%				6,155,091,399



Commercial Paper
ANZ New Zealand International Ltd., London:
0.20%, 8/26/15 (c)(d)		75,000		74,976,667
0.30%, 9/08/15 (a)		100,000		100,000,000
0.27%, 11/10/15 (a)(c)		100,000		100,000,000
0.33%, 6/03/16 (a)(c)		100,000		100,000,000
Australia & New Zealand Banking International Group Ltd. (a):
0.28%, 11/13/15		100,000		100,000,000
0.30%, 11/24/15		59,000		58,998,933
Bank of Nova Scotia, 0.31%, 12/09/15 (a)(c)		100,000		100,000,000
Banque ET Caisse Epargne, 0.26%, 7/06/15 (d)		100,000		99,996,389
Bedford Row Funding Corp.:
0.35%, 8/07/15 (d)		100,000		99,964,028
0.33%, 2/18/16 (a)		100,000		100,000,000
0.33%, 2/26/16 (a)		35,000		35,000,000
0.32%, 3/02/16 (a)		80,000		80,000,000
0.32%, 3/07/16 (a)(c)		50,000		50,000,000
BNP Paribas Fortis SA, 0.03%, 7/01/15 (d)		200,000		200,000,000
Cafco LLC, 0.32%, 11/02/15 (d)		60,000		59,933,867
Caisse des Depots et Consignations, 0.27%, 7/08/15 (d)		70,000		69,996,325
Chariot Funding LLC (d):
0.28%, 10/07/15 (c)		25,000		24,980,944
0.31%, 10/20/15		45,500		45,456,510
Ciesco LLC, 0.32%, 11/06/15 (d)		50,000		49,943,111
Collateralized Commercial Paper Co. LLC, 0.30%, 7/24/15 (d)		70,000		69,986,583
Collateralized Commercial Paper II Co., 0.36%, 12/07/15 (a)		150,000		150,000,000
Commonwealth Bank of Australia:
0.28%, 7/08/15 (a)		75,000		75,000,000
0.24%, 7/20/15 (a)		45,000		44,999,900
0.22%, 9/29/15 (d)		200,000		199,887,500
0.26%, 10/27/15 (a)(c)		100,000		99,997,062

See Notes to Financial Statements.



42	BLACKROCK FUNDS III	JUNE 30, 2015

Schedule of Investments (continued)

Prime Money Market Master Portfolio

(Percentages shown are based on Net Assets)


Commercial Paper	Par (000)		Value
Commonwealth Bank of Australia (concluded):
0.27%, 11/17/15 (a)	$	100,000	$	100,000,000
0.29%, 11/19/15 (a)		100,000		100,000,000
0.26%, 12/02/15 (a)(c)		180,000		180,000,000
0.28%, 2/19/16 (a)		50,000		50,000,000
0.29%, 2/26/16 (a)		50,000		50,000,000
0.30%, 4/29/16 (a)		27,000		27,000,000
CRC Funding LLC, 0.28%, 8/06/15 (d)		100,000		99,972,000
Credit Suisse, New York, 0.27%, 7/02/15 (d)		100,000		99,999,250
DBS Bank Ltd., 0.25%, 9/17/15 (d)		100,000		99,945,833
Erste Abwicklungsanstalt (d):
0.25%, 7/01/15		70,000		70,000,000
0.22%, 9/15/15		100,000		99,953,556
Fairway Finance Co. LLC:
0.26%, 9/02/15 (a)		60,000		59,999,108
0.26%, 9/04/15 (a)		40,000		39,999,387
0.30%, 10/21/15 (d)		48,500		48,454,733
0.29%, 12/17/15 (a)		50,000		50,000,000
HSBC Bank PLC (a):
0.25%, 7/06/15		75,000		75,000,000
0.27%, 10/16/15		110,000		110,000,031
0.29%, 11/19/15		92,500		92,500,000
0.34%, 1/13/16		100,000		100,000,000
0.32%, 2/05/16		116,500		116,500,000
Jupiter Securitization Co. LLC (d):
0.27%, 7/02/15		25,000		24,999,813
0.30%, 10/07/15		67,000		66,945,283
Kells Funding LLC:
0.20%, 7/15/15 (c)(d)		100,000		99,992,222
0.20%, 7/20/15 (d)		100,000		99,989,444
0.20%, 7/29/15 (d)		100,000		99,984,444
0.24%, 10/15/15 (d)		160,000		159,886,933
0.28%, 10/30/15 (a)		125,650		125,641,693
0.30%, 1/13/16 (a)		100,000		100,000,000
National Australia Bank Ltd. (a):
0.28%, 10/08/15		100,000		100,000,000
0.27%, 11/04/15		50,000		50,000,000
0.27%, 11/09/15 (c)		50,000		50,000,000
Natixis, SA, 0.28%, 8/31/15 (d)		32,000		31,984,818
Nederlandse Waterschapsbank NV (a):
0.25%, 7/09/15		50,000		50,000,000
0.26%, 10/01/15		120,000		120,000,000
0.33%, 12/22/15		100,000		100,000,000
Nieuw Amsterdam Receivables Corp., 0.24%, 9/10/15 (d)		120,000		119,943,200
Nordea Bank AB, 0.30%, 10/19/15 (d)		100,000		99,908,333
Old Line Funding LLC, 0.28%, 10/01/15 (d)		84,745		84,684,360
PSP Capital, Inc., 0.33%, 10/26/15 (d)		50,000		49,946,375
Rabobank Nederland, New York, 0.21%, 8/14/15 (d)		73,250		73,231,199
Rabobank USA Financial Corp., 0.24%, 7/14/15 (d)		52,000		51,995,493
Skandinaviska Enskilda Banken AB (d):
0.26%, 8/07/15		57,000		56,984,768
0.24%, 9/14/15		50,000		49,975,000
0.27%, 9/18/15		116,000		115,931,270
0.27%, 10/05/15		149,000		148,892,720
0.27%, 10/06/15		51,000		50,962,898
Sumitomo Mitsui Banking Corp. (d):
0.27%, 7/02/15		75,000		74,999,437
0.25%, 7/06/15		200,000		199,993,056
Svenska Handelsbanken AB, 0.26%, 7/02/15 (d)		100,000		99,999,278
Thunder Bay Funding LLC, 0.30%, 12/14/15 (a)		92,000		92,000,000
Toyota Credit Canada, Inc. (d):
0.27%, 11/09/15		50,000		49,950,875
0.27%, 11/10/15		50,000		49,950,500
Toyota Motor Credit Corp.:
0.27%, 7/08/15 (d)	$	74,750	$	74,746,076
0.25%, 7/30/15 (d)		50,000		49,989,931
0.24%, 10/02/15 (d)		100,000		99,938,000
0.22%, 10/06/15 (d)		200,000		199,881,444
0.25%, 1/08/16 (a)		200,000		200,000,000
United Overseas Bank Ltd. (d):
0.26%, 7/07/15		97,000		96,995,797
0.27%, 7/09/15 (c)		40,000		39,997,600
0.26%, 7/13/15 (c)		20,000		19,998,267
Versailles Commercial Paper LLC, 0.25%, 7/01/15 (d)		75,000		75,000,000
Victory Receivables Corp. (d):
0.18%, 7/13/15		36,100		36,097,834
0.18%, 7/15/15		85,000		84,994,050
0.17%, 7/20/15		106,481		106,471,446
Westpac Banking Corp.:
0.25%, 7/02/15 (c)(d)		100,000		99,999,306
0.28%, 8/12/15 (a)		25,000		25,000,336
0.29%, 11/20/15 (a)		100,000		100,000,000
0.28%, 3/18/16 (a)		75,000		75,000,000
0.31%, 4/14/16 (a)		90,000		90,000,000
Westpac Securities NZ Ltd.:
0.28%, 7/07/15 (d)		55,400		55,397,415
0.27%, 8/10/15 (a)(c)		100,000		100,000,000
0.32%, 5/06/16 (a)(c)		25,000		25,000,000
Total Commercial Paper — 34.2%				8,261,722,631



Corporate Notes
Bank of Montreal (a):
0.76%, 9/11/15		42,305		42,343,405
0.53%, 9/24/15		25,000		25,014,085
Nederlandse Waterschapsbank NV, 0.37%, 11/04/15 (a)(c)		100,000		100,032,968
Svenska Handelsbanken AB, 0.31%, 11/13/15 (a)(c)		108,200		108,200,000
The Toronto-Dominion Bank, 0.29%, 11/06/15 (a)		24,000		24,015,745
Total Corporate Notes — 1.2%				299,606,203



Time Deposits
Bank of Tokyo-Mitsubishi UFJ, Ltd., 0.04%, 7/01/15		150,000		150,000,000
BNP Paribas SA, 0.03%, 7/01/15		300,000		300,000,000
Credit Agricole SA, 0.07%, 7/01/15		640,000		640,000,000
DNB Bank ASA, 0.04%, 7/01/15		300,000		300,000,000
Nordea Bank AB, 0.04%, 7/01/15		300,000		300,000,000
Skandinaviska Enskilda Banken AB, 0.04%, 7/01/15		300,000		300,000,000
Svenska Handelsbanken AB, 0.04%, 7/01/15		800,000		800,000,000
Total Time Deposits — 11.6%				2,790,000,000



U.S. Government Sponsored Agency Obligation — 0.4%
Federal Home Loan Bank, 0.13%, 10/14/15 (a)		100,000		100,000,000



U.S. Treasury Obligation — 0.7%
U.S. Treasury Bill, 0.27%, 6/23/16 (d)		180,000		179,520,280

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	43

Schedule of Investments (continued)

Prime Money Market Master Portfolio

(Percentages shown are based on Net Assets)


Repurchase Agreements	Par (000)		Value
BNP Paribas Securities Corp., 0.15%, 7/01/15 (Purchased on 10/16/14 to be repurchased at $84,090,300, collateralized by various Corporate Debt Obligations and a U.S. Government Sponsored Agency Obligation, 0.10% to 8.75%, due 7/02/15 to 4/25/46, original par and fair values of $369,726,768 and $88,428,148, respectively) (a)	$	84,000	$	84,000,000
Total Value of BNP Paribas Securities Corp. (collateral value of $88,428,148)				84,000,000
Citigroup Global Markets, Inc., 0.10%, 7/01/15 (Purchased on 06/30/15 to be repurchased at $1,000,003, collateralized by various U.S. Treasury Obligations, 0.38% to 3.63%, due 2/15/16 to 8/15/43, original par and fair values of $1,018,191 and $1,020,001, respectively) (e)		1,000		1,000,000
Total Value of Citigroup Global Markets, Inc. (collateral value of $1,020,001)				1,000,000
Credit Suisse Securities (USA) LLC, 0.40%, 7/07/15 (Purchased on 6/30/15 to be repurchased at $135,010,500, collateralized by various Corporate Debt Obligations, 0.00%, due 7/25/53 to 6/25/54, original par and fair values of $209,028,393 and $168,750,445, respectively)		135,000		135,000,000
Credit Suisse Securities (USA) LLC, 0.40%, 7/01/15 (Purchased on 3/27/15 to be repurchased at $615,772,124, collateralized by various Corporate Debt Obligations, 0.00% to 6.00%, due 2/25/54 to 7/25/58, original par and fair values of $1,141,689,465 and $768,895,795, respectively) (a)		615,116		615,116,000
Credit Suisse Securities (USA) LLC, 0.64%, 8/04/15 (Purchased on 6/30/15 to be repurchased at $50,031,111, collateralized by a Corporate Debt Obligation, 0.00%, due 6/25/54, original par and fair value of $106,710,000 and $62,502,410, respectively) (f)		50,000		50,000,000
Total Value of Credit Suisse Securities (USA) LLC (collateral value of $1,000,148,650)				800,116,000
Federal Reserve Bank of New York, 0.05%, 7/01/15 (Purchased on 6/30/15 to be repurchased at $2,500,003,472, collateralized by a U.S. Treasury Obligation, 3.63%, due 2/15/20, original par and fair value of $2,261,000,700 and $2,500,003,502, respectively)		2,500,000		2,500,000,000
Federal Reserve Bank of New York, 0.07%, 7/01/15 (Purchased on 6/29/15 to be repurchased at $1,000,003,889, collateralized by a U.S. Treasury Obligation, 3.00%, due 5/15/42, original par and fair value of $1,016,760,100 and $1,000,003,894, respectively)		1,000,000		1,000,000,000
Total Value of Federal Reserve Bank of New York (collateral value of $3,500,007,396)				3,500,000,000
HSBC Securities (USA), Inc., 0.12%, 7/01/15 (Purchased on 4/14/15 to be repurchased at $15,003,900, collateralized by a U.S. Government Sponsored Agency Obligation, 3.00%, due 11/01/42, original par and fair value of $18,145,000 and $15,302,102, respectively) (a)		15,000		15,000,000
Total Value of HSBC Securities (USA), Inc. (collateral value of $15,302,102)				15,000,000
J.P. Morgan Securities LLC, 0.20%, 7/01/15 (Purchased on 3/25/13 to be repurchased at $50,230,000, collateralized by various Corporate Debt Obligations, 0.10% to 6.69%, due 11/15/28 to 4/10/48, original par and fair values of $1,133,594,855 and $53,500,014, respectively) (a)	$	50,000	$	50,000,000
J.P. Morgan Securities LLC, 0.40%, 7/01/15 (Purchased on 3/25/13 to be repurchased at $30,276,000, collateralized by various Corporate Debt Obligations, 0.33% to 4.83%, due 9/15/32 to 1/25/37, original par and fair values of $59,360,000 and $37,502,643, respectively) (a)		30,000		30,000,000
J.P. Morgan Securities LLC, 0.57%, 7/06/15 (Purchased on 4/6/15 to be repurchased at $100,144,083, collateralized by various Corporate Debt Obligations, 0.37% to 8.45%, due 6/15/27 to 5/25/37, original par and fair values of $699,845,469 and $125,000,614, respectively)		100,000		100,000,000
J.P. Morgan Securities LLC, 0.47%, 8/04/15 (Purchased on 6/30/15 to be repurchased at $125,057,118, collateralized by various Corporate Debt Obligations and a U.S. Government Sponsored Agency Obligation, 0.00% to 6.07%, due 8/25/28 to 2/12/51, original par and fair values of $1,678,914,600 and $133,755,095, respectively) (f)		125,000		125,000,000
J.P. Morgan Securities LLC, 0.55%, 8/04/15 (Purchased on 6/30/15 to be repurchased at $45,024,063, collateralized by various Corporate Debt Obligations, 0.52% to 1.81%, due 4/19/26 to 5/25/37, original par and fair values of $86,345,000 and $56,251,948, respectively) (f)		45,000		45,000,000
J.P. Morgan Securities LLC, 0.58%, 8/19/15 (Purchased on 5/19/15 to be repurchased at $40,059,289, collateralized by various Corporate Debt Obligations, 0.30% to 6.37%, due 2/15/34 to 9/25/47, original par and fair values of $130,599,410 and $50,002,470 respectively)		40,000		40,000,000
J.P. Morgan Securities LLC, 0.66%, 9/29/15 (Purchased on 6/30/15 to be repurchased at $45,075,075, collateralized by various Corporate Debt Obligations, 0.00% to 7.20%, due 7/02/20 to 9/25/58, original par and fair values of $111,743,000 and $56,251,944, respectively) (f)		45,000		45,000,000
J.P. Morgan Securities LLC, 0.78%, 9/29/15 (Purchased on 6/30/15 to be repurchased at $50,098,583, collateralized by various Corporate Debt Obligations, 0.42% to 7.31%, due 10/25/25 to 6/12/50, original par and fair values of $333,379,245 and $60,000,092, respectively) (f)		50,000		50,000,000
Total Value of J.P. Morgan Securities LLC (collateral value of $572,264,820)				485,000,000
Merrill Lynch, Pierce, Fenner & Smith, Inc., 0.65%, 8/14/15 (Purchased on 6/30/15 to be repurchased at $110,089,375, collateralized by various Corporate Debt Obligations, 3.13% to 5.59%, due 1/28/30 to 9/25/43, par and fair values of $190,512,484 and $137,500,000, respectively) (f)		110,000		110,000,000
Total Value of Merrill Lynch, Pierce, Fenner & Smith, Inc. (collateral value of $137,500,000)				110,000,000
RBC Capital Markets LLC, 0.12%, 7/01/15 (Purchased on 6/30/15 to be repurchased at $63,000,210, collateralized by various Corporate Debt Obligations, 0.52% to 7.95%, due 2/26/16 to 12/31/49, original par and fair values of $62,297,270 and $66,150,001, respectively)		63,000		63,000,000

See Notes to Financial Statements.



44	BLACKROCK FUNDS III	JUNE 30, 2015

Schedule of Investments (continued)

Prime Money Market Master Portfolio

(Percentages shown are based on Net Assets)


Repurchase Agreements	Par (000)		Value
RBC Capital Markets LLC, 0.13%, 7/01/15 (Purchased on 3/28/14 to be repurchased at $25,041,528, collateralized by various Corporate Debt Obligations, 0.00%, due 8/14/15 to 12/23/15, original par and fair values of $26,304,612 and $26,250,000, respectively) (a)	$	25,000	$	25,000,000
RBC Capital Markets LLC, 0.13%, 7/01/15 (Purchased on 6/13/14 to be repurchased at $16,022,129, collateralized by various Corporate Debt Obligations, 0.00% to 9.00%, due 2/26/16 to 7/15/45, original par and fair values of $18,692,663 and $16,800,001, respectively) (a)		16,000		16,000,000
RBC Capital Markets LLC, 0.20%, 7/01/15 (Purchased on 6/24/15 to be repurchased at $100,003,889, collateralized by various Corporate Debt Obligations, 0.00% to 9.88%, due 7/02/15 to 8/15/45, original par and fair values of $102,286,372 and $105,045,053, respectively)		100,000		100,000,000
Total Value of RBC Capital Markets LLC (collateral value of $214,245,055)				204,000,000
Wells Fargo Securities LLC, 0.25%, 7/01/15 (Purchased on 8/05/14 to be repurchased at $180,412,500, collateralized by various Corporate Debt Obligations, 0.38% to 6.35%, due 9/17/18 to 11/25/57, original par and fair values of $294,475,833 and $192,600,000, respectively) (a)		180,000		180,000,000
Wells Fargo Securities LLC, 0.51%, 7/09/15 (Purchased on 4/10/15 to be repurchased at $50,063,750, collateralized by various Corporate Debt Obligations, 0.48% to 6.70%, due 8/24/15 to 9/15/33, original par and fair values of $49,800,378 and $51,500,001, respectively)		50,000		50,000,000
Wells Fargo Securities LLC, 0.50%, 7/14/15 (Purchased on 4/15/15 to be repurchased at $36,750,881, collateralized by various Corporate Debt Obligations, 2.75% to 9.63%, due 11/15/15 to 10/15/34, original par and fair values of $35,084,604 and $37,806,151, respectively)	$	36,705	$	36,705,000
Wells Fargo Securities LLC, 0.44%, 8/03/15 (Purchased on 5/05/15 to be repurchased at $100,110,000, collateralized by various Corporate Debt Obligations, 0.73% to 9.38%, due 7/19/15 to 3/15/35, original par and fair values of $97,736,776 and $103,000,001, respectively)		100,000		100,000,000
Wells Fargo Securities LLC, 0.44%, 8/04/15 (Purchased on 5/06/15 to be repurchased at $59,064,900, collateralized by various Corporate Debt Obligations, 0.92% to 9.46%, due 11/30/15 to 11/01/34, original par and fair values of $57,534,603 and $60,770,001, respectively)		59,000		59,000,000
Wells Fargo Securities LLC, 0.68%, 9/14/15 (Purchased on 6/15/15 to be repurchased at $55,094,539, collateralized by various Corporate Debt Obligations, 2.39% to 6.33%, due 2/27/36 to 7/15/40, original par and fair values of $99,313,270 and $68,750,000, respectively)		55,000		55,000,000
Total Value of Wells Fargo Securities LLC (collateral value of $514,426,154)				480,705,000
Total Repurchase Agreements — 23.5%				5,679,821,000
*Total Investments (Cost — $23,465,761,513) — 97.1%**				23,465,761,513
Other Assets Less Liabilities — 2.9%				690,321,850

Net Assets — 100.0%			$	24,156,083,363

Notes to Schedule of Investments

Cost for federal income tax purposes.

(a)

Variable rate security. Rate shown is as of report date.

(b)

Issuer is a U.S. branch of foreign domiciled bank.

(c)

(d)

Rates shown are discount rates or a range of discount rates at the time of purchase.

(e)

Traded in a joint account.

(f)

Variable rate security. Rate shown is as of report date and maturity shown is the date the principal owed can be recovered through demand.

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that the Master Portfolio has the ability to access

•

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	45


Schedule of Investments (concluded)		Prime Money Market Master Portfolio

As of June 30, 2015, the following table summarizes the Master Portfolio’s investments categorized in the disclosure hierarchy:


	Level 1	Level 2		Level 3	Total
Assets:
Investments:
Short-Term Securities¹	—	$	23,465,761,513	—	$	23,465,761,513
¹ See above Schedule of Investments for values in each security type.

The Master Portfolio may hold assets in which the fair value approximates the carrying amount for financial statement purposes. As of June 30, 2015, cash of $688,568,102 is categorized as Level 1 within the disclosure hierarchy.

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



46	BLACKROCK FUNDS III	JUNE 30, 2015

Schedule of Investments June 30, 2015 (Unaudited)

Treasury Money Market Master Portfolio

(Percentages shown are based on Net Assets)


U.S. Treasury Obligations	Par (000)		Value
U.S. Treasury Bills (a):
0.00%, 7/02/15	$	225,000	$	225,000,000
0.13%, 7/09/15		10,000		9,999,722
0.09%, 7/16/15		12,500		12,499,547
0.08%, 7/23/15		55,000		54,997,395
0.08%, 7/30/15		49,000		48,997,040
0.11%, 9/17/15		37,500		37,491,063
0.12%, 10/01/15		96,100		96,069,721
0.11%, 12/31/15		284,000		283,842,064
U.S. Treasury Notes:
0.25%, 7/31/15		43,000		43,006,040
4.25%, 8/15/15		75,000		75,386,191
1.25%, 8/31/15		33,730		33,792,058
0.25%, 10/31/15		105,467		105,503,030
0.25% - 2.13%, 12/31/15		392,000		394,384,674
0.09%, 7/31/16 (b)		32,995		33,000,309
0.07%, 10/31/16 (b)		79,563		79,541,535
0.10%, 1/31/17 (b)		97,504		97,505,022
0.09%, 4/30/17 (b)		88,291		88,290,832
Total U.S. Treasury Obligations — 27.3%				1,719,306,243



Repurchase Agreements — 59.2%
Bank of Nova Scotia, 0.10%, 7/01/15 (Purchased on 6/30/15 to be repurchased at $280,000,778, collateralized by various U.S. Treasury Obligations, 0.25% to 4.75%, due 12/31/15 to 2/15/45, original par and fair values of $279,889,008 and $285,600,881, respectively)		280,000		280,000,000
Total Value of Bank of Nova Scotia (collateral value of $285,600,881)				280,000,000
BNP Paribas Securities Corp., 0.05%, 7/01/15 (Purchased on 6/30/15 to be repurchased at $450,000,625, collateralized by various U.S. Treasury Obligations, 0.00% to 2.63%, due 5/15/16 to 5/15/37, original par and fair values of $455,081,702 and $459,000,000, respectively)		450,000		450,000,000
BNP Paribas Securities Corp., 0.08%, 7/01/15 (Purchased on 6/30/15 to be repurchased at $82,000,182, collateralized by various a U.S. Treasury Obligation, 0.00% to 4.63%, due 2/15/16 to 11/15/44, original par and fair values of $83,180,594 and $83,640,018, respectively)		82,000		82,000,000
BNP Paribas Securities Corp., 0.06%, 7/02/15 (Purchased on 6/25/15 to be repurchased at $89,101,040, collateralized by various U.S. Treasury Obligations, 0.00% to 4.63%, due 7/23/15 to 8/15/44, original par and fair values of $99,063,366 and $90,882,000, respectively)		89,100		89,100,000
Total Value of BNP Paribas Securities Corp. (collateral value of $633,522,018)				621,100,000
Citigroup Global Markets, Inc., 0.10%, 7/01/15 (Purchased on 6/30/15 to be repurchased at $173,000,481, collateralized by various U.S. Treasury Obligations, 0.38% to 3.63%, due 2/15/16 to 8/15/43, original par and fair values of $176,146,920 and $176,460,082, respectively) (c)		173,000		173,000,000
Total Value of Citigroup Global Markets, Inc. (collateral value of $176,460,082)				173,000,000
HSBC Securities (USA), Inc., 0.10%, 7/01/15 (Purchased on 6/30/15 to be repurchased at $85,000,236, collateralized by various U.S. Treasury Obligations, 0.25% to 8.75%, due 11/30/15 to 2/15/45, original par and fair values of $76,870,800 and $86,700,021, respectively)	$	85,000	$	85,000,000
HSBC Securities (USA), Inc., 0.10%, 7/01/15 (Purchased on 1/27/14 to be repurchased at $200,288,889, collateralized by various U.S. Treasury Obligations, 0.25% to 9.00%, due 7/15/15 to 2/15/42, original par and fair values of $197,652,805 and $204,001,025, respectively) (b)		200,000		200,000,000
Total Value of HSBC Securities (USA), Inc. (collateral value of $290,701,046)				285,000,000
Merrill Lynch, Pierce, Fenner & Smith, Inc., 0.11%, 7/01/15 (Purchased on 6/30/15 to be repurchased at $1,400,004,278, collateralized by various U.S. Treasury Obligations, 0.00% to 6.00%, due 9/17/15 to 2/15/45, original par and fair values of $1,286,130,352 and $1,428,000,060, respectively)		1,400,000		1,400,000,000
Total Value of Merrill Lynch, Pierce, Fenner & Smith, Inc. (collateral value of $1,428,000,060)				1,400,000,000
Morgan Stanley & Co. LLC, 0.08%, 7/01/15 (Purchased on 6/30/15 to be repurchased at $30,000,067, collateralized by various U.S. Treasury Obligations, 0.00% to 1.38%, due 7/23/15 to 9/30/18, original par and fair values of $30,241,500 and $30,600,061, respectively)		30,000		30,000,000
Morgan Stanley & Co. LLC, 0.08%, 7/01/15 (Purchased on 6/30/15 to be repurchased at $500,001,111 collateralized by various U.S. Treasury Obligations, 1.75% to 2.63%, due 11/15/20 to 3/31/22, original par and fair values of $497,766,000 and $510,000,085, respectively)		500,000		500,000,000
Total Value of Morgan Stanley & Co. LLC (collateral value of $540,600,147)				530,000,000
RBC Capital Markets LLC, 0.07%, 7/01/15 (Purchased on 6/30/15 to be repurchased at $240,099,467, collateralized by various U.S. Treasury Obligations, 0.00% to 3.75%, due 7/02/15 to 5/15/45, original par and fair values of $249,327,300 and $244,901,014, respectively)		240,099		240,099,000
Total Value of RBC Capital Markets LLC (collateral value of $244,901,014)				240,099,000

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	47

Schedule of Investments (concluded)

Treasury Money Market Master Portfolio

(Percentages shown are based on Net Assets)


Repurchase Agreements	Par (000)		Value
TD Securities (USA) LLC, 0.10%, 7/01/15 (Purchased on 6/30/15 to be repurchased at $189,000,525 collateralized by various U.S. Treasury Obligations, 1.50% to 7.63%, due 6/30/16 to 11/15/44, original par and fair values of $186,281,300 and $192,780,019, respectively)	$	189,000	$	189,000,000
Total Value of TD Securities (USA) LLC (collateral value of $192,780,019)				189,000,000
Total Repurchase Agreements — 59.2%				3,718,199,000
*Total Investments (Cost — $5,437,505,243) — 86.5%**				5,437,505,243
Other Assets Less Liabilities — 13.5%				846,835,029

Net Assets — 100.0%			$	6,284,340,272

Notes to Schedule of Investments

Cost for federal income tax purposes.

(a)

Rates shown are discount rates or a range of discount rates at the time of purchase.

(b)

Variable rate security. Rate shown is as of report date.

(c)

Traded in a joint account.

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that the Master Portfolio has the ability to access

•

As of June 30, 2015, the following table summarizes the Master Portfolio’s investments categorized in the disclosure hierarchy:


	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Short-Term Securities¹		—	$	5,437,505,243		—	$	5,437,505,243
¹ See above Schedule of Investments for values in each security type.

The Master Portfolio may hold assets in which the fair value approximates the carrying amount for financial statement purposes. As of June 30, 2015, cash of $1,129,378,096 is categorized as Level 1 within the disclosure hierarchy.

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



48	BLACKROCK FUNDS III	JUNE 30, 2015


Statements of Assets and Liabilities


June 30, 2015 (Unaudited)	Money Market Master Portfolio		Prime Money Market Master Portfolio		Treasury Money Market Master Portfolio

Assets
Investments at value — unaffiliated¹	$	29,021,733,528	$	17,785,940,513	$	1,719,306,243
Repurchase agreements at value²		8,555,138,000		5,679,821,000		3,718,199,000
Cash		203,709,944		688,568,102		1,129,378,096
Receivables:
Interest		7,408,200		3,195,392		1,496,864
Contributions from investors		—		7		5

Total assets		37,787,989,672		24,157,525,014		6,568,380,208


Liabilities
Payables:
Investments purchased		—		—		283,842,064
Investment advisory fees		2,363,944		1,357,214		173,089
Professional fees		143,634		50,182		14,716
Trustees’ fees		92,285		34,255		10,067
Withdrawals to investors		197,897		—		—

Total liabilities		2,797,760		1,441,651		284,039,936

Net Assets	$	37,785,191,912	$	24,156,083,363	$	6,284,340,272


Net Assets Consist of
Investors’ capital	$	37,785,191,912	$	24,156,083,363	$	6,284,340,272

¹ Investments at cost — unaffiliated	$	29,021,733,528	$	17,785,940,513	$	1,719,306,243
²Repurchase agreements at cost — unaffiliated	$	8,555,138,000	$	5,679,821,000	$	3,718,199,000


Statements of Operations


Six Months Ended June 30, 2015 (Unaudited)	Money Market Master Portfolio			Prime Money Market Master Portfolio			Treasury Money Market Master Portfolio

Investment Income
Interest	$	53,982,915		$	28,613,522		$	1,282,632


Expenses
Investment advisory		21,060,034			11,728,369			1,536,428
Independent Trustees		235,748			133,750			24,055
Professional		63,118			26,989			10,148

Total expenses		21,358,900			11,889,108			1,570,631
Less fees waived by the Manager		(6,616,876	)		(3,679,250	)		(508,614	)

Total expenses after fees waived		14,742,024			8,209,858			1,062,017

Net investment income		39,240,891			20,403,664			220,615


Realized Gain
Net realized gain from investments		1,076,897			436,956			125,427

Net Increase in Net Assets Resulting from Operations	$	40,317,788		$	20,840,620		$	346,042


Statements of Changes in Net Assets		Master Investment Portfolio


	Money Market Master Portfolio
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	39,240,891		$	66,517,792
Net realized gain		1,076,897			3,145,559

Net increase in net assets resulting from operations		40,317,788			69,663,351


Capital Transactions
Proceeds from contributions		58,686,183,206			53,841,747,303
Value of withdrawals		(61,787,995,619	)		(54,589,158,809	)

Net decrease in net assets derived from capital transactions		(3,101,812,413	)		(747,411,506	)


Net Assets
Total decrease in net assets		(3,061,494,625	)		(677,748,155	)
Beginning of period		40,846,686,537			41,524,434,692

End of period	$	37,785,191,912		$	40,846,686,537


Statements of Changes in Net Assets		Master Investment Portfolio


	Prime Money Market Master Portfolio
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	20,403,664		$	24,529,317
Net realized gain		436,956			794,518

Net increase in net assets resulting from operations		20,840,620			25,323,835


Capital Transactions
Proceeds from contributions		179,692,645,522			128,913,398,407
Value of withdrawals		(179,351,744,561	)		(124,057,023,599)

Net increase in net assets derived from capital transactions		340,900,961			4,856,374,808


Net Assets
Total increase in net assets		361,741,581			4,881,698,643
Beginning of period		23,794,341,782			18,912,643,139

End of period	$	24,156,083,363		$	23,794,341,782


Statements of Changes in Net Assets		Master Investment Portfolio


	Treasury Money Market Master Portfolio
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	220,615		$	40,546
Net realized gain		125,427			110,422

Net increase in net assets resulting from operations		346,042			150,968


Capital Transactions
Proceeds from contributions		29,798,476,420			27,585,996,303
Value of withdrawals		(27,372,035,892	)		(26,466,792,303)

Net increase in net assets derived from capital transactions		2,426,440,528			1,119,204,000


Net Assets
Total increase in net assets		2,426,786,570			1,119,354,968
Beginning of period		3,857,553,702			2,738,198,734

End of period	$	6,284,340,272		$	3,857,553,702


Financial Highlights		Master Investment Portfolio


	Money Market Master Portfolio
	Six Months Ended June 30, 2015 (Unaudited)		Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)		2014		2013		2012		2011		2010

Total Return
Total return		0.09%¹		0.16%		0.20%		0.27%		0.23%		0.27%


Ratio to Average Net Assets
Total expenses		0.10%²		0.10%		0.10%		0.10%		0.10%		0.10%

Total expenses after fees waived		0.07%²		0.07%		0.07%		0.07%		0.07%		0.07%

Net investment income		0.19%²		0.16%		0.19%		0.27%		0.22%		0.26%


Supplemental Data
Net assets, end of period (000)		$37,785,192		$40,846,687		$41,524,435		$35,289,099		$28,528,047		$20,007,557

Aggregate total return.

Annualized.


Financial Highlights		Master Investment Portfolio


	Prime Money Market Master Portfolio
	Six Months Ended June 30, 2015 (Unaudited)		Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)		2014		2013		2012		2011		2010

Total Return
Total return		0.08%¹		0.13%		0.17%		0.25%		0.21%		0.25%


Ratios to Average Net Assets
Total expenses		0.10%²		0.10%		0.10%		0.10%		0.10%		0.10%

Total expenses after fees waived		0.07%²		0.07%		0.07%		0.07%		0.07%		0.07%

Net investment income		0.17%²		0.14%		0.17%		0.25%		0.21%		0.25%


Supplemental Data
Net assets, end of period (000)		$24,156,083		$23,794,342		$18,912,643		$15,934,441		$10,732,297		$10,071,057

Aggregate total return.

Annualized.


Financial Highlights		Master Investment Portfolio


	Treasury Money Market Master Portfolio
	Six Months Ended June 30, 2015 (Unaudited)		Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)		2014		2013		2012		2011		2010

Total Return
Total return		0.00%¹		0.00%		0.02%		0.06%		0.09%		0.13%


Ratios to Average Net Assets
Total expenses		0.10%²		0.10%		0.10%		0.10%		0.10%		0.10%

Total expenses after fees waived		0.07%²		0.06%		0.06%		0.07%		0.06%		0.06%

Net investment income		0.01%²		0.00%		0.02%		0.08%		0.03%		0.13%


Supplemental Data
Net assets, end of period (000)		$6,284,340		$3,857,554		$2,738,199		$2,613,824		$1,602,468		$2,200,634

Aggregate total return.

Annualized.


Notes to Financial Statements (Unaudited)		Master Investment Portfolio

1. Organization:

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

2. Significant Accounting Policies:

The Master Portfolios’ 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 and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each Master Portfolio is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. The following is a summary of significant accounting policies followed by the Master Portfolios:

Valuation: U.S. GAAP defines fair value as the price the Master Portfolios would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Master Portfolios’ investments are valued under the amortized cost method which approximates current market value in accordance with Rule 2a-7 under the 1940 Act. Under this method, investments are valued at cost when purchased and, thereafter, a constant proportionate accretion of discounts and amortization of premiums are recorded until the maturity of the security. Each Master Portfolio seeks to maintain its net asset value per share at $1.00, although there is no assurance that it will be able to do so on a continuing basis.

Other: Expenses directly related to a Master Portfolio are charged to that Master Portfolio. Other operating expenses shared by several funds are prorated among those funds on the basis of relative net assets or other appropriate methods.

The Master Portfolios have an arrangement with their custodian whereby fees may be reduced by credits earned on uninvested cash balances, which, if applicable, are shown as fees paid indirectly in the Statements of Operations. The custodian imposes fees on overdrawn cash balances, which can be offset by accumulated credits earned or may result in additional custody charges.

3. Securities and Other Investments:

Repurchase Agreements: Certain Master Portfolios may enter into repurchase agreements. In a repurchase agreement, the Master Portfolios purchase a security from a counterparty who agrees to repurchase the same security at a mutually agreed upon date and price. On a daily basis, the counterparty is required to maintain collateral subject to the agreement and in value no less than the agreed upon repurchase amount. The agreements are conditioned upon the collateral being deposited under the Federal Reserve book entry system or held in a segregated account by the Master Portfolios’ custodian or designated sub-custodians under tri-party repurchase agreements. The Master Portfolios, along with other registered investment companies advised by the Manager, may transfer uninvested cash into a single joint trading account which is then invested in one or more repurchase agreements. As of June 30, 2015, there were no joint trading accounts invested in repurchase agreements.

In the event the counterparty defaults and the fair value of the collateral declines, the Master Portfolios could experience losses, delays and costs in liquidating the collateral.

Repurchase agreements are entered into by the Master Portfolios under Master Repurchase Agreements (each, an “MRA”). The MRA permits the Master Portfolios, under certain circumstances including an event of default (such as bankruptcy or insolvency), to offset payables and/or receivables with collateral held by and/or posted to the counterparty. As a result, one single net payment is created. Bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of the MRA counterparty’s bankruptcy or insolvency. Based on the terms of the MRA, the Master Portfolios receive securities as collateral with a market value in excess of the repurchase price at maturity. Upon a bankruptcy or insolvency of the MRA counterparty, the Master Portfolios would recognize a liability with respect to such excess collateral. The liability reflects the Master Portfolios’ obligation under bankruptcy law to return the excess to the counterparty.

4. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock, Inc. (“BlackRock”) for 1940 Act purposes.

MIP, on behalf of each Master Portfolio, entered into an Investment Advisory Agreement with the Manager, the Master Portfolios’ investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory and administration services. The Manager is responsible for the management



BLACKROCK FUNDS III	JUNE 30, 2015	57


Notes to Financial Statements (continued)		Master Investment Portfolio

of each Master Portfolios’ portfolio and provides the necessary personnel, facilities, equipment and certain other services to the operations of each Master Portfolio. For such services, each Master Portfolio pays the Manager a monthly fee based on a percentage of each Master Portfolio’s average daily net assets at the following annual rates:


Money Market Master Portfolio			0.10%
Prime Money Market Master Portfolio			0.10%
Treasury Money Market Master Portfolio			0.10%

The Manager has contractually agreed to waive 0.03% of its investment advisory fees through April 30, 2016. The Manager has also voluntarily agreed to waive investment advisory fees to enable the feeders that invest in the Master Portfolios to maintain minimum levels of daily net investment income. The Manager may discontinue the voluntary waiver at any time. For the six months ended June 30, 2015, the amounts included in fees waived by the Manager in the Statements of Operations are as follows:


Money Market Master Portfolio	$	6,318,010
Prime Money Market Master Portfolio	$	3,518,511
Treasury Money Market Master Portfolio	$	474,411

The fees and expenses of the MIP’s trustees who are not “interested persons” of MIP, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and MIP’s independent registered public accounting firm (together, the “independent expenses”) are paid directly by the Master Portfolios. The Manager has contractually agreed to provide an offsetting credit against the administration fees paid by the Master Portfolios in an amount equal to the independent expenses through April 30, 2016. The amounts waived are included in fees waived by the Manager in the Statements of Operations. For the six months ended June 30, 2015, such waiver amounts are as follows:


Money Market Master Portfolio	$	298,866
Prime Money Market Master Portfolio	$	160,739
Treasury Money Market Master Portfolio	$	34,203

MIP entered into an Administration Agreement with BlackRock Advisors, LLC (“BAL”), which has agreed to provide general administration services (other than investment advice and related portfolio activities). BAL, in consideration thereof, has agreed to bear all of the Master Portfolios’ ordinary operating expenses, excluding, generally, investment advisory fees, distribution fees, brokerage and other expenses related to the execution of portfolio transactions, extraordinary expenses and certain other expenses which are borne by the Master Portfolios. BAL is not entitled to compensation for providing administration services to the Master Portfolios, for so long as BAL is entitled to receive compensation for providing administration services to corresponding feeder funds that invest substantially all of their assets in the Master Portfolios, or BAL (or an affiliate) receives investment advisory fees from the Master Portfolios.

Certain officers and/or trustees of MIP are officers and/or directors of BlackRock or its affiliates.

5. Income Tax Information:

Money Market Master Portfolio, Prime Money Market Master Portfolio and Treasury Money Market Master Portfolio are each classified as a partnership for federal income tax purposes. As such, each investor in the Master Portfolios is treated as the owner of its proportionate share of net assets, income, expenses and realized and unrealized gains and losses of the Master Portfolios. Therefore, no federal income tax provision is required. It is intended that the Master Portfolios’ assets will be managed so an investor in the Master Portfolios can satisfy the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended.

The Master Portfolios file U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Master Portfolios’ U.S. federal tax returns remains open for each of the four years ended December 31, 2014. The statutes of limitations on the Master Portfolios’ 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 Master Portfolios as of June 30, 2015, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Master Portfolios’ financial statements.

6. Principal Risks:

In the normal course of business, certain Master Portfolios invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations, including to pay principal and interest when due (issuer credit risk). The value of securities held by the Master Portfolios may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Master Portfolios; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency, interest rate and price fluctuations. Similar to issuer credit risk, the Master Portfolios may be exposed to counterparty credit risk, or the risk that an entity with which the Master Portfolios have unsettled or open transactions may fail to or be unable to perform on its commitments. The



58	BLACKROCK FUNDS III	JUNE 30, 2015


Notes to Financial Statements (concluded)		Master Investment Portfolio

Master Portfolios manage counterparty credit risk by entering into transactions only with counterparties that the Manager believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Master Portfolios to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Master Portfolios’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Master Portfolios.

On July 23, 2014, the U.S. Securities and Exchange Commission adopted amendments to money market fund regulations, which structurally change the way that certain money market funds will be required to operate. The compliance period for amendments range between July 2015 and October 2016. When implemented, the changes may affect the Master Portfolios’ investment strategies, fees and expenses, portfolio and share liquidity and return potential. The Master Portfolios’ continue to evaluate their strategy to implement the new regulations.

7. Subsequent Events:

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



BLACKROCK FUNDS III	JUNE 30, 2015	59


Disclosure of Investment Advisory Agreement

The Board of Trustees of Master Investment Portfolio (the “Master Fund”) met in person on April 21, 2015 (the “April Meeting”) and May 18-20, 2015 (the “May Meeting”) to consider the approval of the investment advisory agreement (the “Agreement”) between the Master Fund, on behalf of Money Market Master Portfolio, Prime Money Market Master Portfolio and Treasury Money Market Master Portfolio (each, a “Master Portfolio” and collectively, the “Master Portfolios”), each a series of the Master Fund, and BlackRock Fund Advisors (the “Manager” or “BlackRock”), the Master Fund’s investment advisor. Each of BlackRock Cash Funds: Institutional, BlackRock Cash Funds: Prime and BlackRock Cash Funds: Treasury (each, a “Portfolio” and collectively, the “Portfolios”), each a series of BlackRock Funds III (the “Fund”), is a “feeder” fund that invests all of its investable assets in the corresponding Master Portfolio. Accordingly, the Board of Trustees of the Fund also considered the approval of the Agreement with respect to each Master Portfolio. For simplicity: (a) the Board of Trustees of the Master Fund and the Board of Trustees of the Fund are referred to herein collectively as the “Board,” and the members are referred to as “Board Members;” and (b) the shareholders of each Portfolio and the interest holders of each Master Portfolio are referred to as “shareholders.”

Activities and Composition of the Board

The Agreement

Pursuant to the 1940 Act, the Board is required to consider the continuation of the Agreement on an annual basis. The Board has four quarterly meetings per year, each extending over two days, a fifth one-day meeting to consider specific information surrounding the consideration of renewing the Agreement, and additional in-person and telephonic meetings as needed. In connection with this year-long deliberative process, the Board assessed, among other things, the nature, extent and quality of the services provided to the Master Portfolios and the Portfolios by BlackRock, BlackRock’s personnel and affiliates, including (as applicable) investment management services; administrative and shareholder services; the oversight of fund service providers; marketing services; risk oversight; compliance; and ability to meet applicable legal and regulatory requirements.

The Board, acting directly and through its committees, considers at each of its meetings, and from time to time as appropriate, factors that are relevant to its annual consideration of the renewal of the Agreement, including the services and support provided by BlackRock to the Master Portfolios, the Portfolios and their shareholders. Among the matters the Board considered were: (a) investment performance for one-year, three-year, five-year and/or since inception periods, as applicable, against peer funds, applicable benchmark, and performance metrics, as applicable, as well as senior management’s and portfolio managers’ analysis of the reasons for any over performance or underperformance of a Master Portfolio/Portfolio relative to its peers, benchmark, and other performance metrics, as applicable; (b) fees, including advisory, administration, if applicable, and other amounts paid to BlackRock and its affiliates by the Master Portfolios and/or the Portfolios for services, such as marketing and distribution, call center and fund accounting; (c) the Master Portfolios’ and /or the Portfolios’ operating expenses and how BlackRock allocates expenses to the Master Portfolios and the Portfolios; (d) the resources devoted to, risk oversight of, and compliance reports relating to, implementation of each Master Portfolio’s and Portfolio’s investment objective(s), policies and restrictions, and meeting new regulatory requirements; (e) the Master Fund’s and the Fund’s compliance with its respective compliance policies and procedures; (f) the nature, cost and character of non-investment management services provided by BlackRock and its affiliates; (g) BlackRock’s and other service providers’ internal controls and risk and compliance oversight mechanisms; (h) BlackRock’s implementation of the proxy voting policies approved by the Board; (i) execution quality of portfolio transactions; (j) BlackRock’s implementation of the Master Fund’s and/or the Fund’s valuation and liquidity procedures; (k) an analysis of management fees for products with similar investment mandates across the open-end fund, exchange-traded fund (“ETF”), closed-end fund and institutional account product channels, as applicable, and the similarities and differences between these products and the services provided as compared to the Master Portfolios and/or the Portfolios; (l) BlackRock’s compensation methodology for its investment professionals and the incentives it creates, along with investment professionals’ investments in the fund(s) they manage; and (m) periodic updates on BlackRock’s business.

The Board has engaged in an ongoing strategic review with BlackRock of opportunities to consolidate funds and of BlackRock’s commitment to investment performance. BlackRock also furnished information to the Board in response to specific questions. These questions covered issues such as: BlackRock’s profitability; investment performance; sub-advisory and advisory relationships with other clients (including mutual funds sponsored by third parties); the viability of specific funds; fund size and manager capacity; BlackRock’s research capabilities; portfolio managers’ investments in funds they manage; funds’ portfolio risk targets; and management fee levels and breakpoints. The Board further discussed with BlackRock: BlackRock’s management structure; portfolio turnover, execution quality and use of soft dollars; BlackRock’s portfolio manager compensation and performance accountability; marketing support for the funds; services provided to the funds by BlackRock affiliates; and BlackRock’s oversight of relationships with third party service providers.



60	BLACKROCK FUNDS III	JUNE 30, 2015


Disclosure of Investment Advisory Agreement (continued)

Board Considerations in Approving the Agreement

The Approval Process: Prior to the April Meeting, the Board requested and received materials specifically relating to the Agreement. The Board is continuously engaged in a process with its independent legal counsel and BlackRock to review the nature and scope of the information provided to better assist its deliberations. The materials provided in connection with the April Meeting included (a) information independently compiled and prepared by Lipper, Inc. (“Lipper”) on fees and expenses of each Master Portfolio and Portfolio, as applicable, as compared with a peer group of funds as determined by Lipper (“Expense Peers”) and the investment performance of each Portfolio as compared with a peer group of funds as determined by Lipper¹; (b) information on the profits realized by BlackRock and its affiliates pursuant to the Agreement and a discussion of fall-out benefits to BlackRock and its affiliates; (c) a general analysis provided by BlackRock concerning investment management fees charged to other clients, such as institutional clients, sub-advised mutual funds, ETFs and closed-end funds, under similar investment mandates, as well as the performance of such other clients, as applicable; (d) review of non-management fees; (e) the existence, impact and sharing of potential economies of scale; (f) a summary of aggregate amounts paid by each Master Portfolio and/or Portfolio to BlackRock; (g) sales and redemption data regarding each Portfolio’s shares; and (h) if applicable, a comparison of management fees to similar BlackRock open-end funds, as classified by Lipper.

At the May Meeting, the Board of the Master Fund, including the Independent Board Members, approved the continuation of the Agreement between the Manager and the Master Fund with respect to each Master Portfolio for a one-year term ending June 30, 2016. The Board of the Fund, including the Independent Board Members, also considered the continuation of the Agreement with respect to each Master Portfolio and found the Agreement to be satisfactory. In approving the continuation of the Agreement, the Board of the Master Fund considered: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of each Master Portfolio, each Portfolio and BlackRock; (c) the advisory fee and the cost of the services and profits to be realized by BlackRock and its affiliates from their relationship with the Master Portfolios and the Portfolios; (d) each Portfolio’s costs to investors compared to the costs of Expense Peers and performance compared to the relevant performance comparison as previously discussed; (e) the sharing of potential economies of scale; (f) fall-out benefits to BlackRock and its affiliates as a result of its relationship with the Master Portfolios and the Portfolios; and (g) other factors deemed relevant by the Board Members.

The Board also considered other matters it deemed important to the approval process, such as payments made to BlackRock or its affiliates relating to the distribution of Portfolio shares, securities lending and cash management, services related to the valuation and pricing of portfolio holdings of each Master Portfolio, direct and indirect benefits to BlackRock and its affiliates from their relationship with the Master Portfolios and the Portfolios and advice from independent legal counsel with respect to the review process and materials submitted for the Board’s review. The Board noted the willingness of BlackRock personnel to engage in open, candid discussions with the Board. The Board did not identify any particular information as determinative, and each Board Member may have attributed different weights to the various items considered.

A. Nature, Extent and Quality of the Services Provided by BlackRock: The Board, including the Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of each Portfolio. Throughout the year, the Board compared each Portfolio’s performance to the performance of a comparable group of mutual funds, relevant benchmark, and performance metrics, as applicable. The Board met with BlackRock’s senior management personnel responsible for investment activities, including the senior investment officers. The Board also reviewed the materials provided by each Master Portfolio’s portfolio management team discussing the relevant Master Portfolio’s performance and the Master Portfolio’s investment objective(s), strategies and outlook.

The Board considered, among other factors, with respect to BlackRock: the number, education and experience of investment personnel generally and each Master Portfolio’s portfolio management team; BlackRock’s research capabilities; investments by portfolio managers in the funds they manage; portfolio trading capabilities; use of technology; commitment to compliance; credit analysis capabilities; risk analysis and oversight capabilities; and the approach to training and retaining portfolio managers and other research, advisory and management personnel. The Board engaged in a review of BlackRock’s compensation structure with respect to each Master Portfolio’s portfolio management team and BlackRock’s ability to attract and retain high-quality talent and create performance incentives.

In addition to advisory services, the Board considered the quality of the administrative and other non-investment advisory services provided to the Master Portfolios and the Portfolios. BlackRock and its affiliates provide the Master Portfolios and the Portfolios with certain administrative, shareholder and other services (in addition to any such services provided to the Master Portfolios and the Portfolios by third parties) and officers and other personnel as are necessary for the operations of the Master Portfolios and the Portfolios. In particular, BlackRock and its affiliates provide the Master Portfolios and the Portfolios with the following administrative services, including, among others: (i) preparing disclosure documents, such as the prospectus, the summary prospectus (as applicable), the statement of additional information and periodic shareholder reports; (ii) oversight of daily accounting and pricing; (iii) overseeing and coordinating the activities of other service providers; (iv) organizing Board meetings and preparing the materials for such Board

Funds are ranked by Lipper in quartiles, ranging from first to fourth, where first is the most desirable quartile position and fourth is the least desirable.



BLACKROCK FUNDS III	JUNE 30, 2015	61


Disclosure of Investment Advisory Agreement (continued)

meetings; (v) providing legal and compliance support; (vi) furnishing analytical and other support to assist the Board in its consideration of strategic issues such as the merger, consolidation or repurposing of certain open-end funds; and (vii) performing other administrative functions necessary for the operation of the Master Portfolios and the Portfolios, such as tax reporting, fulfilling regulatory filing requirements and call center services. The Board reviewed the structure and duties of BlackRock’s fund administration, shareholder services, legal and compliance departments and considered BlackRock’s policies and procedures for assuring compliance with applicable laws and regulations.

B. The Investment Performance of the Master Portfolios, the Portfolios and BlackRock: The Board, including the Independent Board Members, also reviewed and considered the performance history of each Master Portfolio and Portfolio, as applicable. The Board noted that each Portfolio’s investment results correspond directly to the investment results of the applicable Master Portfolio. In preparation for the April Meeting, the Board worked with its independent legal counsel, BlackRock and Lipper to develop a template for, and was provided with, reports independently prepared by Lipper, which included a comprehensive analysis of each Portfolio’s performance. The Board also reviewed a narrative and statistical analysis of the Lipper data that was prepared by BlackRock. In connection with its review, the Board received and reviewed information regarding the investment performance of each Portfolio as compared to other funds in its applicable Lipper category. The Board was provided with a description of the methodology used by Lipper to select peer funds and periodically meets with Lipper representatives to review its methodology. The Board and its Performance Oversight and Contract Committee regularly review, and meet with Master Portfolio management to discuss, the performance of each Master Portfolio and Portfolio, as applicable, throughout the year.

The Board noted that for each of the one-, three- and five-year periods reported, each of BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime ranked in the first quartile against its Lipper Performance Universe.

The Board noted that for the one-, three- and five-year periods reported, BlackRock Cash Funds: Treasury ranked in the third, first and first quartiles, respectively, against its Lipper Performance Universe. However, the Board noted that the Portfolio performed within the one basis point threshold of its Lipper Performance Universe peer median for the one-year period.

The Board reviewed each Portfolio’s performance within the context of the low yield environment that has existed over the past several years.

The quartile standing of each Portfolio in its Lipper peer group takes into account the Portfolio’s current yield only. The Board believes that the performance of a money market fund can only be understood holistically, accounting for current yield and risk. While the Board reviews each Master Portfolio’s current yield performance, it also examines the liquidity, duration, and credit quality of the Master Portfolio’s portfolio. In the Board’s view, BlackRock’s money market funds have performed well over the one-, three- and five-year periods given BlackRock’s emphasis on preserving capital and seeking as high a level of current income as is consistent with liquidity while simultaneously managing risk.

C. Consideration of the Advisory/Management Fees and the Cost of the Services and Profits to be Realized by BlackRock and its Affiliates from their Relationship with the Master Portfolios and the Portfolios: The Board, including the Independent Board Members, reviewed each Master Portfolio’s contractual advisory fee rate compared with the other funds in the corresponding Portfolio’s Lipper category. The contractual advisory fee rate is shown before taking into account any reimbursements or fee waivers. The Board also compared each Portfolio’s total expense ratio, as well as each Master Portfolio’s actual advisory fee rate, to those of other funds in the corresponding Portfolio’s Lipper category. The total expense ratio represents a fund’s total net operating expenses, including any 12b-1 or non-12b-1 service fees. The total expense ratio gives effect to any expense reimbursements or fee waivers that benefit a fund, and the actual advisory fee rate gives effect to any advisory fee reimbursements or waivers that benefit a fund. The Board considered the services provided and the fees charged by BlackRock and its affiliates to other types of clients with similar investment mandates, as applicable, including institutional accounts and sub-advised mutual funds.

The Board received and reviewed statements relating to BlackRock’s financial condition. The Board reviewed BlackRock’s profitability methodology and was also provided with a profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to the Master Portfolios and the Portfolios. The Board reviewed BlackRock’s profitability with respect to each Master Portfolio and Portfolio, as applicable, and other funds the Board currently oversees for the year ended December 31, 2014 compared to available aggregate profitability data provided for the two prior years. The Board reviewed BlackRock’s profitability with respect to certain other U.S. fund complexes managed by the Manager and/or its affiliates. The Board reviewed BlackRock’s assumptions and methodology of allocating expenses in the profitability analysis, noting the inherent limitations in allocating costs among various advisory products. The Board recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, precision of expense allocations and business mix. As a result, calculating and comparing profitability at individual fund levels is difficult.



62	BLACKROCK FUNDS III	JUNE 30, 2015


Disclosure of Investment Advisory Agreement (continued)

In addition, the Board considered the cost of the services provided to the Master Portfolios and the Portfolios by BlackRock, and BlackRock’s and its affiliates’ profits relating to the management and distribution of the Master Portfolios and the Portfolios and the other funds advised by BlackRock and its affiliates. As part of its analysis, the Board reviewed BlackRock’s methodology in allocating its costs to the management of the Master Portfolios and the Portfolios. The Board also considered whether BlackRock has the financial resources necessary to attract and retain high quality investment management personnel to perform its obligations under the Agreement and to continue to provide the high quality of services that is expected by the Board. The Board further considered factors including but not limited to BlackRock’s commitment of time, assumption of risk and liability profile in servicing the Master Portfolios and the Portfolios in contrast to what is required of BlackRock with respect to other products with similar investment mandates across the open-end fund, ETF, closed-end fund, sub-advised mutual fund and institutional account product channels, as applicable.

The Board noted that Money Market Master Portfolio’s contractual advisory fee rate ranked in the first quartile, and that the actual advisory fee rate and the corresponding Portfolio’s total expense ratio ranked in the first and second quartiles, respectively, relative to the corresponding Portfolio’s Expense Peers.

The Board noted that Prime Money Market Master Portfolio’s contractual advisory fee rate ranked in the first quartile, and that the actual advisory fee rate and the corresponding Portfolio’s total expense ratio each ranked in the first quartile, relative to the corresponding Portfolio’s Expense Peers.

The Board noted that Treasury Money Market Master Portfolio’s contractual advisory fee rate ranked in the first quartile, and that the actual advisory fee rate and the corresponding Portfolio’s total expense ratio ranked in the fourth and third quartiles, respectively, relative to the corresponding Portfolio’s Expense Peers. The Board determined that the corresponding Portfolio’s total expense ratio was appropriate in light of the median total expense ratio paid by its Expense Peers.

The Board reviewed each Master Portfolio’s/Portfolio’s expenses within the context of the low yield environment and consequent expense waivers and reimbursements. The Board also noted that BlackRock has contractually agreed to waive a portion of the advisory fees for each Master Portfolio. The Board further noted that BlackRock and its affiliates have contractually agreed to reimburse or otherwise compensate each Master Portfolio/Portfolio for the fees and expenses of the Independent Board Members, counsel to the Independent Board Members and the Master Portfolio’s/Portfolio’s independent registered public accounting firm. The Board additionally noted that, to enable each Master Portfolio/Portfolio to maintain minimum levels of daily net investment income, BlackRock and each Master Portfolio’s/Portfolio’s administrator have voluntarily agreed to waive a portion of its fees and/or reimburse the Master Portfolio’s/Portfolio’s operating expenses as necessary. This waiver and/or reimbursement may be discontinued at any time without notice.

D. Economies of Scale: The Board, including the Independent Board Members, considered the extent to which economies of scale might be realized as the assets of the Master Portfolios and the Portfolios increase, as well as the existence of expense caps, as applicable. The Board also considered the extent to which the Master Portfolios and the Portfolios benefit from such economies and whether there should be changes in the advisory fee rate or breakpoint structure in order to enable the Master Portfolios and the Portfolios to participate in these economies of scale, for example through the use of breakpoints in the advisory fee based upon the asset level of the Master Portfolios. In their consideration, the Board Members took into account the existence of any expense caps and further considered the continuation and/or implementation, as applicable, of such caps.

E. Other Factors Deemed Relevant by the Board Members: The Board, including the Independent Board Members, also took into account other ancillary or “fall-out” benefits that BlackRock or its affiliates may derive from their respective relationships with the Master Portfolios and the Portfolios, both tangible and intangible, such as BlackRock’s ability to leverage its investment professionals who manage other portfolios and risk management personnel, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates as service providers to the Master Portfolios and the Portfolios, including for administrative, distribution, securities lending and cash management services. The Board also considered BlackRock’s overall operations and its efforts to expand the scale of, and improve the quality of, its operations. The Board also noted that BlackRock may use and benefit from third party research obtained by soft dollars generated by certain registered fund transactions to assist in managing all or a number of its other client accounts.

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

Conclusion



BLACKROCK FUNDS III	JUNE 30, 2015	63


Disclosure of Investment Advisory Agreement (concluded)

factors in their totality, the Board of the Master Fund, including the Independent Board Members, was satisfied that the terms of the Agreement were fair and reasonable and in the best interest of each Master Portfolio and its shareholders. The Board of the Fund, including the Independent Board Members, also considered the continuation of the Agreement with respect to each Master Portfolio and found the Agreement to be satisfactory. In arriving at its decision to approve the Agreement, the Board of the Master Fund did not identify any single factor or group of factors as all-important or controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were also assisted by the advice of independent legal counsel in making this determination. The contractual fee arrangements for the Master Portfolios reflect the results of several years of review by the Board Members and predecessor Board Members, and discussions between such Board Members (and predecessor Board Members) and BlackRock. As a result, the Board Members’ conclusions may be based in part on their consideration of these arrangements in prior years.



64	BLACKROCK FUNDS III	JUNE 30, 2015


Officers and Trustees

Rodney D. Johnson, Chair of the Board and Trustee

David O. Beim, Trustee

Collette Chilton, Trustee

Frank J. Fabozzi, Trustee

Dr. Matina S. Horner, Trustee

Herbert I. London, Trustee

Cynthia A. Montgomery, Trustee

Barbara G. Novick, Trustee

Joseph P. Platt, Trustee

Robert C. Robb, Jr., Trustee

Toby Rosenblatt, Trustee

Mark Stalnecker, Trustee

Kenneth L. Urish, Trustee

Frederick W. Winter, Trustee

John M. Perlowski, President and Chief Executive Officer

Richard Hoerner, CFA, Vice President

Jennifer McGovern, Vice President

Neal Andrews, Chief Financial Officer

Jay Fife, Treasurer

Charles Park, Chief Compliance Officer

Fernanda Piedra, Anti-Money Laundering Compliance Officer

Benjamin Archibald, Secretary

Effective March 1, 2015, Charles Park resigned as Trust/MIP-Money Laundering Compliance Officer of the Trust/MIP and Fernanda Piedra became Anti-Money Laundering Compliance Officer of the Trust/MIP.

Effective May 18, 2015, Ian MacKinnon resigned as a Trustee of the Trust/MIP.



BLACKROCK FUNDS III	JUNE 30, 2015	65


Additional Information

General Information

Householding

The Funds will mail only one copy of shareholder documents, including prospectuses, annual and semi-annual reports 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 Transfer Agent at (888) 204-3956.

Availability of Quarterly Schedule of Investments

The Funds/Master Portfolios file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each Fund’s/Master Portfolio’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. Each Fund’s/Master Portfolio’s Forms N-Q may also be obtained upon request and without charge by calling (800) 626-1960.

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the Funds/Master Portfolios use to determine how to vote proxies relating to portfolio securities is available upon request and without charge (1) by calling (888) 626-1960; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.

Availability of Proxy Voting Record

Information about how the Funds/Master Portfolios voted proxies relating to securities held in the Funds’/Master Portfolios’ portfolios during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com or by calling (800) 626-1960 and (2) on the SEC’s website at http://www.sec.gov.

BlackRock Privacy Principles



66	BLACKROCK FUNDS III	JUNE 30, 2015

This report is intended for current holders. It is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of the Funds unless preceded or accompanied by the Funds’ current prospectus. An investment in a Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a Fund. Performance data quoted represents past performance and does not guarantee future results. Total return information assumes reinvestment of all distributions. Current performance may be higher or lower than the performance data quoted. For current month-end performance information, call 800-626-1960. Each Fund’s current 7-day yield more closely reflects the current earnings of a Fund than the total returns quoted. Statements and other information herein are as dated and are subject to change.


MMF3-6/15-SAR

JUNE 30, 2015

SEMI-ANNUAL REPORT (UNAUDITED)

BlackRock CoreAlpha Bond Fund | of BlackRock Funds III

Not FDIC Insured • May Lose Value • No Bank Guarantee


Table of Contents


	Page
The Markets in Review		3
Semi-Annual Report:
Fund Summary		4
About Fund Performance		6
Disclosure of Expenses		6
Derivative Financial Instruments		7
Fund Financial Statements:
Statement of Assets and Liabilities		8
Statement of Operations		9
Statements of Changes in Net Assets		10
Fund Financial Highlights		11
Fund Notes to Financial Statements		14
Master Portfolio Information		17
Master Portfolio Financial Statements:
Schedule of Investments		18
Statement of Assets and Liabilities		44
Statement of Operations		45
Statements of Changes in Net Assets		46
Master Portfolio Financial Highlights		46
Master Portfolio Notes to Financial Statements		47
Disclosure of Investment Advisory Agreement and Sub-Advisory Agreements		58
Officers and Trustees		62
Additional Information		63

LOGO



2	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015

The Markets in Review

Dear Shareholder,

Sincerely,

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

LOGO

Rob Kapito

President, BlackRock Advisors, LLC


Total Returns as of June 30, 2015
	6-month			12-month
U.S. large cap equities (S&P 500^® Index)		1.23	%		7.42	%
U.S. small cap equities (Russell 2000^® Index)		4.75			6.49
International equities (MSCI Europe, Australasia, Far East Index)		5.52			(4.22	)
Emerging market equities (MSCI Emerging Markets Index)		2.95			(5.12	)
3-month Treasury bills (BofA Merrill Lynch 3-Month U.S. Treasury Bill Index)		0.01			0.02
U.S. Treasury securities (BofA Merrill Lynch 10-Year U.S. Treasury Index)		(0.51	)		3.79
U.S. investment-grade bonds (Barclays U.S. Aggregate Bond Index)		(0.10	)		1.86
Tax-exempt municipal bonds (S&P Municipal Bond Index)		0.01			3.00
U.S. high yield bonds (Barclays U.S. Corporate High Yield 2% Issuer Capped Index)		2.53			(0.39	)
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.



		THIS PAGE NOT PART OF YOUR FUND REPORT				3


Fund Summary as of June 30, 2015

Investment Objective

BlackRock CoreAlpha Bond Fund’s (the “Fund”) investment objective is to seek to provide a combination of income and capital growth.

Portfolio Management Commentary

How did the Fund perform?

•

For the six-month period ended June 30, 2015, the Fund’s Institutional Shares returned (0.02)%, Investor A Shares returned (0.28)% and Investor C Shares returned (0.56)%. The Fund’s Institutional Shares outperformed the benchmark, the Barclays U.S. Aggregate Bond Index (the “Index”), which returned (0.10)% for the same period, while the Investor A Shares and the Investor C Shares underperformed the Index.

•

The Fund invests all of its assets in the CoreAlpha Bond Master Portfolio (the “Master Portfolio”), a series of Master Investment Portfolio.

What factors influenced performance?

•

Credit security selection was strong year to date. An underweight to the energy sector, particularly independent issuers, contributed to performance. Selection within communications names also was additive, in particular an underweight to certain media & entertainment issuers. The Master Portfolio’s global rate strategies contributed as well.

•

Currency strategies detracted over the first half of the year, driven by central banks’ unexpected actions and the impact of the dramatic price activity of German sovereign bonds on market correlations.

•

The Master Portfolio also held derivatives during the period, which did not have a material impact on performance.

Describe recent portfolio activity.

•

During the six-month period, the Master Portfolio reduced a portion of its energy underweight and increased its underweight in basics, primarily metals and mining names.

Describe portfolio positioning at period end.

•

At period end, the Master Portfolio remained overweight relative to the Index in non-government spread sectors and generally underweight in U.S. Treasury securities. Within spread sectors, the Master Portfolio was overweight in investment grade corporate credit, agency mortgage-backed securities and asset-backed securities, and underweight in select non-corporate sectors including emerging markets. The Master Portfolio also held a non-benchmark allocation to high yield debt. With respect to currency positions, the Fund was short the euro and long the Canadian dollar. The Master Portfolio was also positioned short with respect to U.S. and U.K. rates based on growth and momentum insights, and long with respect to Canadian and Australian rates.

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	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015

Total Return Based on a $10,000 Investment

LOGO

Assuming maximum sales charges, transaction costs and other operating expenses, including administration fees, if any. Institutional Shares do not have a sales charge.

The Fund invests all of its assets in the Master Portfolio. The Master Portfolio invests, under normal circumstances, at least 80% of its assets in bonds, including obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities; mortgage-backed securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities, including U.S. agency mortgage pass-through securities; commercial mortgage-backed securities; debt obligations of U.S. issuers; municipal securities; asset-backed securities; and U.S.-registered dollar-denominated debt obligations of foreign issuers. The Master Portfolio may invest in bonds of any maturity or duration.

A widely recognized unmanaged market-weighted index, comprised of investment-grade corporate bonds rated BBB or better, mortgages and U.S. Treasury and U.S. Government agency issues with at least one year to maturity.

Performance Summary for the Period Ended June 30, 2015


										Average Annual Total Returns⁴
										1 Year						5 Years						10 Years
	Standardized 30-Day Yields			Unsubsidized 30-Day Yields			6-Month Total Returns			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge
Institutional		2.24	%		2.22	%		(0.02	)%		2.03	%		N/A			3.59	%		N/A			4.74	%		N/A
Investor A		1.89			1.88			(0.28	)		1.67			(2.42	)%		3.26			2.42	%		4.41			3.98	%
Investor C		1.14			1.13			(0.56	)		0.92			(0.07	)		2.48			2.48			3.63			3.63
Barclays U.S. Aggregate Bond Index		—			—			(0.10	)		1.86			N/A			3.35			N/A			4.44			N/A

⁴

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” on page 6 for a detailed description of share classes, including any related sales charges and fees.

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

Past performance is not indicative of future results.

Expense Example


	Actual						Hypothetical⁶
	Beginning Account Value January 1, 2015		Ending Account Value June 30, 2015		Expenses Paid During the Period⁵		Beginning Account Value January 1, 2015		Ending Account Value June 30, 2015		Expenses Paid During the Period⁵		Annualized Expense Ratio
Institutional	$	1,000.00	$	999.80	$	1.69	$	1,000.00	$	1,023.11	$	1.71		0.34	%
Investor A	$	1,000.00	$	997.20	$	3.42	$	1,000.00	$	1,021.37	$	3.46		0.69	%
Investor C	$	1,000.00	$	994.40	$	7.12	$	1,000.00	$	1,017.65	$	7.20		1.44	%

⁵

For each class of the Fund, expenses are equal to the annualized net expense ratio for the class, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period shown). Because the Fund invests significantly in the Master Portfolio, the expense example reflects the net expenses of both the Fund and the Master Portfolio in which it invests.

⁶

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

See “Disclosure of Expenses” on page 6 for further information on how expenses are calculated.



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	5


About Fund Performance

•

Institutional 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 4.00% 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.

•

Prior to February 28, 2011 for Institutional Shares and prior to April 30, 2012 for Investor A and Investor C Shares, the performance of the classes is based on the returns of the Master Portfolio in which the Fund invests all of its assets adjusted to reflect the estimated annual fund fees and operating expenses of each respective share class of the Fund.

Performance information reflects past performance and does not guarantee future results. Current performance may be lower or higher than the performance data quoted. Refer to www.blackrock.com/funds 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 tables on the previous page assume reinvestment of all distributions, if any, at net asset value (“NAV”) on the payable date. 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 “Administrator”), the Fund’s administrator, waived a portion of the Fund’s expenses. Without such waiver, the Fund’s performance would have been lower. The Administrator is under no obligation to waive or to continue waiving its fees and such voluntary waiver may be reduced or discontinued at any time. See Note 3 of the Notes to Financial Statements for additional information on waivers. The standardized 30-day yield includes the effects of any waivers and/or reimbursements. The unsubsidized 30-day yield excludes the effects of any waivers and/or reimbursements.


Disclosure of Expenses



6	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015


Derivative Financial Instruments



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	7


Statement of Assets and Liabilities		BlackRock CoreAlpha Bond Fund


June 30, 2015 (Unaudited)

Assets
Investments at value — Master Portfolio (cost — $242,205,134)	$	240,402,935
Receivable for capital shares sold		6,474,141

Total assets		246,877,076


Liabilities
Payables:
Contributions to the Master Portfolio		6,399,300
Capital shares redeemed		74,841
Income dividends		41,923
Capital gain distributions		29,661
Administration fees		17,703
Professional fees		8,317
Service and distribution fees		479

Total liabilities		6,572,224

Net Assets	$	240,304,852


Net Assets Consist of
Paid-in capital	$	240,508,419
Distributions in excess of net investment income		(556,952	)
Accumulated net realized gain allocated from the Master Portfolio		2,155,584
Net unrealized appreciation (depreciation) allocated from the Master Portfolio		(1,802,199	)

Net Assets	$	240,304,852


Net Asset Value
Institutional — Based on net assets of $238,758,418 and 22,942,171 shares outstanding, unlimited number of shares authorized, no par value	$	10.41

Investor A — Based on net assets of $1,296,751 and 124,519 shares outstanding, unlimited number of shares authorized, no par value	$	10.41

Investor C — Based on net assets of $249,683 and 23,996 shares outstanding, unlimited number of shares authorized, no par value	$	10.41


Statement of Operations		BlackRock CoreAlpha Bond Fund


Six Months Ended June 30, 2015 (Unaudited)

Investment Income
Net investment income allocated from the Master Portfolio:
Interest	$	3,026,231
Dividends		31,781
Income — affiliated		2,833
Expenses		(270,025	)
Fees waived		6,329

Total income		2,797,149


Fund Expenses
Administration — Institutional		107,492
Administration — Investor A		1,796
Administration — Investor C		260
Service and distribution — Investor A		2,249
Service and distribution — Investor C		1,300
Professional		9,231
Miscellaneous		325

Total expenses		122,653
Less administration fees waived		(9,231	)

Total expenses after fees waived		113,422

Net investment income		2,683,727


Realized and Unrealized Gain (Loss) Allocated from the Master Portfolio
Net realized gain from investments, financial futures contracts, swaps, options written and foreign currency transactions		668,880
Net change in unrealized appreciation (depreciation) on investments, financial futures contracts, swaps, options written and foreign currency translations		(4,103,873	)

Net realized and unrealized loss		(3,434,993	)

Net Decrease in Net Assets Resulting from Operations	$	(751,266	)


Statements of Changes in Net Assets		BlackRock CoreAlpha Bond Fund


	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	2,683,727		$	3,562,127
Net realized gain		668,880			1,664,284
Net change in unrealized appreciation (depreciation)		(4,103,873	)		3,593,170

Net Increase (decrease) in net assets resulting from operations		(751,266	)		8,819,581


Distributions to Shareholders From¹
Net investment income:
Institutional		(2,929,260	)		(3,475,349	)
Investor A		(21,131	)		(16,428	)
Investor C		(2,106	)		(4,036	)
Net realized gain:
Institutional		(376,313	)		(151,873	)
Investor A		(2,099	)		(718	)
Investor C		(405	)		(176	)

Decrease in net assets resulting from distributions to shareholders		(3,331,314	)		(3,648,580	)


Capital Share Transactions
Net increase in net assets derived from capital share transactions		58,478,815			80,653,276


Net Assets
Total increase in net assets		54,396,235			85,824,277
Beginning of period		185,908,617			100,084,340

End of period	$	240,304,852		$	185,908,617

Distributions in excess of net investment income, end of period	$	(556,952	)	$	(288,182	)

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


Financial Highlights


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period February 28, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period February 28, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	10.57		$	10.19		$	10.72		$	10.50		$	10.00

Net investment income²		0.13			0.26			0.22			0.24			0.25
Net realized and unrealized gain (loss)		(0.13	)		0.39			(0.48	)		0.26			0.52

Net increase (decrease) from investment operations		—			0.65			(0.26	)		0.50			0.77

Distributions from:³
Net investment income		(0.14	)		(0.26	)		(0.25	)		(0.25	)		(0.26	)
Net realized gain		(0.02	)		(0.01	)		(0.00	)⁴		—			—
Return of capital		—			—			(0.02	)		(0.03	)		(0.01	)

Total distributions		(0.16	)		(0.27	)		(0.27	)		(0.28	)		(0.27	)

Net asset value, end of period	$	10.41		$	10.57		$	10.19		$	10.72		$	10.50


Total Return⁵
Based on net asset value		(0.02)%	⁶		6.45%			(2.44)%			4.82%			7.80%	⁶


Ratios to Average Net Assets⁷
Total expenses		0.35%	^8,9		0.35%	⁸		0.36%	⁸		0.37%	¹⁰		0.44%	^8,9

Total expenses after fees waived		0.34%	^8,9		0.34%	⁸		0.34%	⁸		0.34%	¹⁰		0.35%	^8,9

Net investment income		2.48%	^8,9		2.53%	⁸		2.16%	⁸		2.22%	¹⁰		2.93%	^8,9


Supplemental Data
Net assets, end of period (000)	$	238,758		$	183,880		$	99,630		$	110,020		$	59,250

Portfolio turnover of the Master Portfolio¹¹		275%			686%			986%			2,128%			1,646%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income.

⁸

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.01%.

⁹

Annualized.

¹⁰

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of less than 0.01%.

¹¹

Includes mortgage dollar roll transactions (“MDRs”). Additional information regarding portfolio turnover rate is as follows:

Six Months Ended
June 30,
2015

(Unaudited)

Year Ended December 31,

Period

February 28, 2011¹
to December 31,

2011

2014

2013

2012

Portfolio turnover rate (excluding MDRs)

215%

470%

736%

1,774%

1,510%


Financial Highlights (continued)


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,						Period April 30, 2012¹ to December 31, 2012
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			Period April 30, 2012¹ to December 31, 2012

Per Share Operating Performance
Net asset value, beginning of period	$	10.58		$	10.19		$	10.72		$	10.55

Net investment income²		0.11			0.23			0.18			0.12
Net realized and unrealized gain (loss)		(0.14	)		0.39			(0.48	)		0.22

Net increase (decrease) from investment operations		(0.03	)		0.62			(0.30	)		0.34

Distributions from:³
Net investment income		(0.12	)		(0.22	)		(0.21	)		(0.15	)
Net realized gain		(0.02	)		(0.01	)		(0.00	)⁴		—
Return of capital		—			—			(0.02	)		(0.02	)

Total distributions		(0.14	)		(0.23	)		(0.23	)		(0.17	)

Net asset value, end of period	$	10.41		$	10.58		$	10.19		$	10.72


Total Return⁵
Based on net asset value		(0.28)%	⁶		6.18%			(2.78)%			3.25%	⁶


Ratios to Average Net Assets⁷
Total expenses		0.70%	^8,9		0.71%	⁸		0.71%	⁸		0.72%	^8,9

Total expenses after fees waived		0.69%	^8,9		0.69%	⁸		0.69%	⁸		0.70%	^8,9

Net investment income		2.09%	^8,9		2.19%	⁸		1.78%	⁸		1.80%	^8,9


Supplemental Data
Net assets, end of period (000)	$	1,297		$	1,776		$	166		$	168

Portfolio turnover of the Master Portfolio¹⁰		275%			686%			986%			2,128%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

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

⁶

Aggregate total return.

⁷

Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income.

⁸

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.01%.

⁹

Annualized.

¹⁰

Includes MDRs. Additional information regarding portfolio turnover rate is as follows:

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

Period
April 30, 2012¹
to December 31,
2012

2014

2013

Portfolio turnover rate (excluding MDRs)

215%

470%

736%

1,774%


Financial Highlights (concluded)


	Investor C
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,						Period April 30, 2012¹ to December 31, 2012
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			Period April 30, 2012¹ to December 31, 2012

Per Share Operating Performance
Net asset value, beginning of period	$	10.57		$	10.18		$	10.71		$	10.55

Net investment income²		0.07			0.15			0.11			0.06
Net realized and unrealized gain (loss)		(0.12	)		0.40			(0.48	)		0.21

Net increase (decrease) from investment operations		(0.05	)		0.55			(0.37	)		0.27

Distributions from:³
Net investment income		(0.09	)		(0.15	)		(0.14	)		(0.10	)
Net realized gain		(0.02	)		(0.01	)		(0.00	)⁴		—
Return of capital		—			—			(0.02	)		(0.01	)

Total distributions		(0.11	)		(0.16	)		(0.16	)		(0.11	)

Net asset value, end of period	$	10.41		$	10.57		$	10.18		$	10.71


Total Return⁵
Based on net asset value		(0.56)%	⁶		5.40%			(3.51)%			2.61%	⁶


Ratios to Average Net Assets⁷
Total expenses		1.45%	^8,9		1.45%	⁸		1.46%	⁸		1.46%	^8,9

Total expenses after fees waived		1.44%	^8,9		1.44%	⁸		1.44%	⁸		1.44%	^8,9

Net investment income		1.37%	^8,9		1.44%	⁸		1.04%	⁸		1.04%	^8,9


Supplemental Data
Net assets, end of period (000)	$	250		$	253		$	288		$	273

Portfolio turnover of the Master Portfolio¹⁰		275%			686%			986%			2,128%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

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

⁶

Aggregate total return.

⁷

Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income.

⁸

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.01%.

⁹

Annualized.

¹⁰

Includes MDRs. Additional information regarding portfolio turnover rate is as follows:

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

Period
April 30, 2012¹
to December 31,
2012

2014

2013

Portfolio turnover rate (excluding MDRs)

215%

470%

736%

1,774%


Notes to Financial Statements (Unaudited)		BlackRock CoreAlpha Bond Fund

1. Organization:

BlackRock CoreAlpha Bond Fund (the “Fund”), a series of BlackRock Funds III (the “Trust”), is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a diversified, open-end management investment company. The Trust is organized as a Delaware statutory trust. The Fund seeks to achieve its investment objective by investing all of its assets in CoreAlpha Bond Master Portfolio (the “Master Portfolio”), a series of Master Investment Portfolio (“MIP”), an affiliate of the Fund, which has the same investment objective and strategies as the Fund. The value of the Fund’s investment in the Master Portfolio reflects the Fund’s proportionate interest in the net assets of the Master Portfolio. The performance of the Fund is directly affected by the performance of the Master Portfolio. At June 30, 2015, the percentage of the Master Portfolio owned by the Fund was 8.0%. The financial statements of the Master Portfolio, including the Schedule of Investments, are included elsewhere in this report and should be read in conjunction with the Fund’s financial statements.

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 each bears certain expenses and has certain conversion privileges as outlined below. Institutional Shares are sold only to certain eligible investors. Investor A and Investor C Shares are generally available through financial intermediaries. Each class has exclusive voting rights with respect to matters relating to its shareholder servicing and distribution expenditures. For distribution and service fee breakdown see Note 3. The Board of Trustees of the Trust and Board of Trustees of MIP are referred to throughout this report as the “Board of Trustees” or the “Board” and the members are referred to as “Trustees.”

Share Class

Initial Sales Charge

CDSC

Conversion

Institutional Shares

None

Investor A Shares

Yes

None

Investor C Shares

Yes

None

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

2. Significant Accounting Policies:

Distributions: Distributions from net investment income are declared daily and paid monthly. Distributions of capital gains are recorded on the ex-dividend date. The portion of distributions, if any, that exceeds the Fund’s current and accumulated earnings and profits, which are measured on a tax basis, will constitute a non-taxable return of capital. The character and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP.

Other: Expenses directly related to the Fund or its classes are charged to the Fund or the applicable class. Other operating expenses shared by several funds, including other funds managed by BlackRock Advisors, LLC (“BAL”), are prorated among those funds on the basis of relative net assets or other appropriate methods. 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.

3. Administration Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock, Inc. (“BlackRock”) for 1940 Act purposes.

The Trust, on behalf of the Fund, entered into an Administration Agreement with BAL, an indirect, wholly owned subsidiary of BlackRock, to provide administrative services (other than investment advice and related portfolio activities). For such services, the Fund pays BAL a monthly fee at an annual rate of 0.10% of the average daily value of the Institutional Share’s net assets and 0.20% of the Investor A and Investor C Shares’ net assets. The Fund does not pay an investment advisory fee or investment management fee.



14	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015


Notes to Financial Statements (continued)				BlackRock CoreAlpha Bond Fund

The fees and expenses of the Fund’s trustees who are not “interested persons” of the Trust, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and the Trust’s independent registered public accounting firm (together, the “independent expenses”) are paid directly by the Fund. BAL has contractually agreed to provide an offsetting credit against the administration fees paid by the Fund in an amount equal to the independent expenses through April 30, 2016.

The Trust, on behalf of the Fund, entered into a Distribution Agreement and a Distribution and Service Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of BAL. 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:


	Investor A		Investor B
Service Fees		0.25%		0.25%
Distribution Fees		—		0.75%

For the six months ended June 30, 2015, affiliates earned underwriting discounts, direct commissions and dealer concessions on sales of the Fund’s Investor A Shares which totaled $32.

For the six months ended June 30, 2015, affiliates received CDSCs of $226 for Investor A Shares.

Certain officers and/or trustees of the Trust are officers and/or directors of BlackRock or its affiliates.

4. 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 federal income tax provision is required.

5. Capital Share Transactions:

Transactions in capital shares for each class were as follows:


	Six Months Ended June 30, 2015						Year Ended December 31, 2014
	Shares			Amount			Shares			Amount
Institutional
Shares sold		6,661,309		$	70,822,520			13,880,886		$	144,664,033
Shares issued to shareholders in reinvestment of distributions		286,010			3,030,228			305,732			3,201,545
Shares redeemed		(1,399,860	)		(14,910,268	)		(6,572,695	)		(68,757,052	)

Net increase		5,547,459		$	58,942,480			7,613,923		$	79,108,526


Investor A
Shares sold		69,554		$	740,283			171,264		$	1,793,894
Shares issued to shareholders in reinvestment of distributions		2,154			22,909			1,582			16,615
Shares redeemed		(115,119	)		(1,228,076	)		(21,204	)		(219,796	)

Net increase (decrease)		(43,411	)	$	(464,884	)		151,642		$	1,590,713



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	15


Notes to Financial Statements (concluded)				BlackRock CoreAlpha Bond Fund


	Six Months Ended June 30, 2015						Year Ended December 31, 2014
	Shares			Amount			Shares			Amount
Investor C
Shares sold		1,555		$	16,527			2		$	22
Shares issued to shareholders in reinvestment of distributions		219			2,315			374			3,904
Shares redeemed		(1,673	)		(17,623	)		(4,777	)		(49,889	)

Net increase (decrease)		101		$	1,219			(4,401	)	$	(45,963	)

Total Net Increase		5,504,149		$	58,478,815			7,761,164		$	80,653,276

6. Subsequent Events:



16	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015


Master Portfolio Information		CoreAlpha Bond Master Portfolio

As of June 30, 2015

Portfolio Composition

Percent of

Long-Term Investments


U.S. Government Sponsored Agency Securities	39	%
Corporate Bonds	30
Non-Agency Mortgage-Backed Securities	11
Asset-Backed Securities	9
U.S. Treasury Obligations	9
Foreign Agency Obligations	1
Municipal Bonds	1


Credit Quality Allocation¹		Percent of Long-Term Investments


AAA/Aaa²	60	%
AA/Aa	7
A	15
BBB/Baa	15
BB/Ba	2
B	—	³
CCC	—	³
N/R	1

For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either Standard & Poor’s (“S&P”) or Moody’s Investors Service (“Moody’s”) if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

Represents less than 1%.



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	17

Schedule of Investments June 30, 2015 (Unaudited)

CoreAlpha Bond Master Portfolio

(Percentages shown are based on Net Assets)


Asset-Backed Securities	Par (000)			Value
Access Group, Inc., Class A2 (a):
Series 2004-A, 0.54%, 4/25/29		USD	4,048	$	3,987,215
Series 2007-1, 0.31%, 4/25/17			123		123,460
Series 2007-A, 0.41%, 8/25/26			500		498,739
ACE Securities Corp. Home Equity Loan Trust (a):
Series 2005-AG1, Class A2D, 0.55%, 8/25/35			850		831,462
Series 2005-HE2, Class M3, 0.91%, 4/25/35			1,629		1,625,186
Series 2005-HE4, Class M2, 0.71%, 7/25/35			2,343		2,331,567
American Credit Acceptance Receivables Trust, Class A (b):
Series 2014-1, 1.14%, 3/12/18			421		421,011
Series 2014-3, 0.99%, 8/10/18			1,111		1,109,165
American Express Credit Account Master Trust, Series 2012-2, Class C, 1.29%, 3/15/18 (b)			8,330		8,332,024
AmeriCredit Automobile Receivables Trust:
Series 2011-2, Class D, 4.00%, 5/08/17			1,552		1,556,691
Series 2011-3, Class C, 2.86%, 1/09/17			381		381,568
Series 2012-3, Class D, 3.03%, 7/09/18			2,121		2,163,755
Series 2012-5, Class B, 1.12%, 11/08/17			3,040		3,041,958
Ameriquest Mortgage Securities, Inc. Pass-Through Certificates, Series 2005-R10, Class A2B, 0.41%, 1/25/36 (a)			230		229,589
Bear Stearns Asset-Backed Securities I Trust, Series 2006-HE1, Class 1A3, 0.51%, 12/25/35 (a)			1,737		1,727,040
Carfinance Capital Auto Trust, Class A (b):
Series 2013-1A, 1.65%, 7/17/17			40		39,691
Series 2013-2A, 1.75%, 11/15/17			659		659,809
Series 2014-1A, 1.46%, 12/17/18			1,946		1,943,071
Centex Home Equity Loan Trust, Series 2006-A, Class AV3, 0.35%, 6/25/36 (a)			1,957		1,946,358
Chase Issuance Trust, Series 2012-A7, Class A7, 2.16%, 9/16/24			4,000		3,883,404
CIT Mortgage Loan Trust, Series 2007-1, Class 2A2, 1.44%, 10/25/37 (a)(b)			48		47,798
Citibank Credit Card Issuance Trust, Series 2014-A6, Class A6, 2.15%, 7/15/21			10,000		10,108,090
College Loan Corp. Trust I, Series 2004-1, Class A4, 0.47%, 4/25/24 (a)			10,200		10,152,121
Countrywide Asset-Backed Certificates, Series 2005-8, Class M1, 0.66%, 12/25/35 (a)			1,405		1,402,710
CPS Auto Receivables Trust, Series 2011-B, Class B, 5.68%, 9/17/18 (b)			500		508,777
Credit Suisse Mortgage Capital Certificates, Series 2006-CF3, Class A1, 0.73%, 10/25/36 (a)(b)			1,478		1,453,879
Asset-Backed Securities	Par (000)			Value
Discover Card Execution Note Trust, Series 2015-A2, Class A, 1.90%, 10/17/22		USD	3,900		3,871,916
DT Auto Owner Trust, Series 2012-2A, Class D, 4.35%, 3/15/19 (b)			5,153		5,185,455
Exeter Automobile Receivables Trust (b):
Series 2012-2A, Class B, 2.22%, 12/15/17			1,500		1,503,898
Series 2013-1A, Class A, 1.29%, 10/16/17			419		419,615
Series 2013-1A, Class B, 2.41%, 5/15/18			2,300		2,309,366
Series 2014-1A, Class A, 1.29%, 5/15/18			4,430		4,434,661
Series 2014-2A, Class A, 1.06%, 8/15/18			882		880,927
First Franklin Mortgage Loan Trust (a):
Series 2005-FF02, Class M2, 0.85%, 3/25/35			228		227,661
Series 2005-FF04, Class M1, 0.62%, 5/25/35			1,624		1,613,918
Series 2005-FF10, Class A4, 0.51%, 11/25/35			731		717,367
First Investors Auto Owner Trust, Class A2 (b):
Series 2013-1A, 0.90%, 10/15/18			703		703,262
Series 2013-3A, 0.89%, 9/15/17			111		110,757
Series 2014-1A, 0.80%, 2/15/18			1,740		1,739,423
Flagship Credit Auto Trust, Series 2014-1, Class A, 1.21%, 4/15/19 (b)			2,645		2,641,771
HLSS Servicer Advance Receivables Backed Notes (b):
Series 2012-T2, Class B2, 2.48%, 10/15/45			100		99,910
Series 2013-T1, Class A2, 1.50%, 1/16/46			11,220		11,208,780
HSI Asset Securitization Corp. Trust, Series 2006-OPT4, Class 2A5, 0.00%, 3/25/36 (c)			4,500		4,336,389
JPMorgan Mortgage Acquisition Corp. (a):
Series 2005-OPT2, Class A1B, 0.48%, 12/25/35			1,252		1,233,921
Series 2007-CH1, Class AV4, 0.31%, 11/25/36			492		490,467
KeyCorp Student Loan Trust, Series 2006-A (a):
Class 2A3, 0.47%, 6/27/29			2,519		2,512,014
Class 2A4, 0.59%, 9/27/35			3,620		3,518,705
Morgan Stanley ABS Capital I, Inc. Trust (a):
Series 2005-HE3, Class M2, 0.97%, 7/25/35			392		391,310
Series 2005-WMC4, Class M4, 1.13%, 4/25/35			3,820		3,831,811
National Collegiate Student Loan Trust (a):
Series 2004-1, Class A2, 0.54%, 6/25/27			1,237		1,226,230
Series 2004-2, Class A4, 0.50%, 11/27/28			7,824		7,701,150
Series 2005-1, Class A4, 0.43%, 11/27/28			389		381,620
Series 2005-2, Class A3, 0.38%, 2/25/28			518		517,063
Series 2005-3, Class A3, 0.43%, 7/25/28			2,841		2,832,345
Series 2005-3, Class A4, 0.47%, 4/25/29			6,263		6,153,542


Portfolio Abbreviations


ABS	Asset-Backed Security	HUF	Hungarian Forint	PHP	Philippine Peso
AUD	Australian Dollar	IDR	Indonesian Rupiah	PLN	Polish Zloty
BRL	Brazilian Real	ILS	Israeli New Shekel	RB	Revenue Bonds
CAD	Canadian Dollar	INR	Indian Rupee	SEK	Swedish Krona
CLP	Chilean Peso	JPY	Japanese Yen	SGD	Singapore Dollar
COP	Colombian Peso	KRW	South Korean Won	STRIPS	Separate Trading of Registered Interest and
ETF	Exchange-Traded Fund	LIBOR	London Interbank Offered Rate		Principal Securities
EUR	Euro	MXN	Mexican Peso	TBA	To-Be-Announced
EURIBOR	Euro Interbank Offered Rate	MYR	Malaysian Ringgit	THB	Thai Baht
GBP	British Pound	NOK	Norwegian Krone	TRY	Turkish Lira
GO	General Obligation Bonds	NYSE	New York Stock Exchange	TWD	Taiwan Dollar
		NZD	New Zealand Dollar	USD	U.S. Dollar

See Notes to Financial Statements.



18	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015

Schedule of Investments (continued)

CoreAlpha Bond Master Portfolio

(Percentages shown are based on Net Assets)


Asset-Backed Securities	Par (000)			Value
National Collegiate Student Loan Trust (a) (concluded):
Series 2006-1, Class A3, 0.38%, 5/25/26		USD	226	$	225,011
Series 2006-1, Class A4, 0.44%, 3/27/28			2,250		2,142,160
Series 2006-2, Class A2, 0.34%, 7/25/26			2,227		2,222,060
Park Place Securities, Inc. Asset-Backed Pass-Through Certificates (a):
Series 2004-WHQ2, Class M2, 1.13%, 2/25/35			4,930		4,916,484
Series 2004-WWF1, Class M2, 1.21%, 12/25/34			641		641,395
Series 2005-WCW3, Class A2C, 0.57%, 8/25/35			1,860		1,838,852
RAMP Trust (a):
Series 2004-RS11, Class M1, 1.12%, 11/25/34			987		972,272
Series 2005-EFC1, Class M2, 0.64%, 5/25/35			1,927		1,915,849
Series 2005-RS6, Class M1, 0.69%, 6/25/35			1,538		1,526,237
Series 2006-NC2, Class A2, 0.38%, 2/25/36			3,815		3,741,742
Series 2006-RZ3, Class A2, 0.35%, 8/25/36			4,755		4,695,662
RASC Trust, Series 2005-AHL3, Class A2, 0.43%, 11/25/35 (a)			1,737		1,710,782
Santander Drive Auto Receivables Trust:
Series 2011-1, Class D, 4.01%, 2/15/17			10,584		10,617,748
Series 2011-3, Class D, 4.23%, 5/15/17			4,075		4,128,321
Series 2011-4, Class C, 3.82%, 8/15/17			1,060		1,065,413
Series 2011-4, Class D, 4.74%, 9/15/17			1,220		1,249,980
Series 2012-1, Class C, 3.78%, 11/15/17			225		226,621
Series 2012-2, Class C, 3.20%, 2/15/18			2,040		2,052,746
Series 2012-2, Class D, 3.87%, 2/15/18			2,000		2,045,720
Series 2012-3, Class D, 3.64%, 5/15/18			5,440		5,596,786
Series 2012-4, Class D, 3.50%, 6/15/18			8,760		8,997,107
Series 2012-AA, Class C, 1.78%, 11/15/18 (b)			5,600		5,634,468
Series 2013-1, Class C, 1.76%, 1/15/19			4,455		4,467,741
Series 2013-2, Class B, 1.33%, 3/15/18			3,005		3,008,633
Series 2013-2, Class C, 1.95%, 3/15/19			9,300		9,370,457
Series 2013-3, Class C, 1.81%, 4/15/19			4,790		4,812,638
Series 2013-A, Class B, 1.89%, 10/15/19 (b)			2,300		2,315,005
Series 2013-A, Class C, 3.12%, 10/15/19 (b)			7,275		7,426,167
Series 2014-1, Class B, 1.59%, 10/15/18			4,320		4,333,707
Series 2014-1, Class C, 2.36%, 4/15/20			3,020		3,040,599
Series 2014-2, Class C, 2.33%, 11/15/19			2,500		2,531,438
Series 2014-4, Class B, 1.82%, 5/15/19			1,850		1,852,462
Series 2014-4, Class C, 2.60%, 11/16/20			1,770		1,794,748
Series 2015-1, Class C, 2.57%, 4/15/21			2,500		2,507,685
Series 2015-2, Class C, 2.44%, 4/15/21			2,350		2,346,637
Series 2015-3, Class C, 2.74%, 1/15/21			2,100		2,106,413
SLC Private Student Loan Trust, Series 2006-A, Class A5, 0.45%, 7/15/36 (a)			12,714		12,641,113
SLM Private Credit Student Loan Trust (a):
Series 2003-A, Class A2, 0.73%, 9/15/20			6,440		6,378,813
Series 2003-B, Class A2, 0.69%, 3/15/22			1,938		1,924,871
Series 2003-C, Class A2, 0.68%, 9/15/20			1,667		1,645,545
Series 2004-A, Class A2, 0.49%, 3/16/20			1,445		1,443,624
Series 2004-B, Class A2, 0.49%, 6/15/21			5,322		5,293,483
Series 2005-B, Class A2, 0.47%, 3/15/23			4,319		4,297,213
Series 2006-B, Class A4, 0.47%, 3/15/24			3,711		3,681,429
Series 2006-C, Class A4, 0.46%, 3/15/23			3,378		3,328,546
SLM Private Education Loan Trust (a)(b):
Series 2010-A, Class 1A, 3.20%, 5/16/44			3,373		3,498,986
Series 2011-A, Class A1, 1.19%, 10/15/24			5,116		5,131,295
Asset-Backed Securities	Par (000)			Value
SLM Private Education Loan Trust (a)(b) (concluded):
Series 2011-B, Class A1, 1.04%, 12/16/24		USD	687	$	688,867
Series 2011-C, Class A1, 1.59%, 12/15/23			487		488,194
Series 2012-A, Class A1, 1.59%, 8/15/25			1,528		1,540,429
Series 2012-C, Class A1, 1.29%, 8/15/23			1,393		1,397,294
Series 2012-D, Class A1, 1.24%, 6/15/23			972		974,365
Series 2012-E, Class A1, 0.94%, 10/16/23			3,532		3,540,223
Series 2013-A, Class A1, 0.79%, 8/15/22			4,440		4,444,116
Series 2013-B, Class A1, 0.84%, 7/15/22			6,832		6,841,878
Series 2013-C, Class A1, 1.04%, 2/15/22			3,281		3,290,818
SoFi Professional Loan Program LLC, Series 2015-B, Class A2, 2.51%, 9/27/32 (b)			950		949,810
Soundview Home Loan Trust, Series 2005-OPT4, Class 2A3, 0.45%, 12/25/35 (a)			3,074		3,018,672
Terwin Mortgage Trust, Series 2006-5, Class 2A2, 0.40%, 6/25/37 (a)(b)			3,211		3,125,767
Trade MAPS 1 Ltd., Series 2013-1A (a)(b):
Class A, 0.89%, 12/10/18			9,690		9,689,545
Class B, 1.44%, 12/10/18			3,100		3,102,477
Total Asset-Backed Securities — 11.5%					345,736,511



Corporate Bonds
Aerospace & Defense — 0.6%
Eaton Corp., 0.95%, 11/02/15			3,000		3,001,947
Harris Corp.:
2.00%, 4/27/18			1,275		1,271,286
2.70%, 4/27/20			345		340,593
3.83%, 4/27/25			325		315,923
4.85%, 4/27/35			400		383,297
L-3 Communications Corp.:
3.95%, 11/15/16			1,250		1,290,664
1.50%, 5/28/17			520		516,430
4.75%, 7/15/20			2,400		2,532,972
4.95%, 2/15/21			5,468		5,835,559
Lockheed Martin Corp.:
4.85%, 9/15/41			2,000		2,113,802
3.80%, 3/01/45			2,145		1,912,184

					19,514,657
Airlines — 0.1%
United Airlines Pass-Through Trust, Series 2013-1, Class A, 4.30%, 2/15/27			3,321		3,421,108
Auto Components — 0.6%
Delphi Corp.:
5.00%, 2/15/23			850		905,250
4.15%, 3/15/24			3,200		3,307,914
Icahn Enterprises LP/Icahn Enterprises Finance Corp.:
4.88%, 3/15/19			1,525		1,536,437
6.00%, 8/01/20			1,725		1,781,062
Johnson Controls, Inc., 1.40%, 11/02/17			3,330		3,317,123
Lear Corp.:
4.75%, 1/15/23			1,000		985,000
5.38%, 3/15/24			3,775		3,831,625
ZF North America Capital, Inc., 4.50%, 4/29/22 (b)			1,030		1,008,937

					16,673,348
Automobiles — 0.1%
General Motors Co., 5.00%, 4/01/35			1,600		1,570,666
Banks — 3.2%
ANZ New Zealand International Ltd., 1.13%, 3/24/16 (b)			2,500		2,507,770
Bank of Nova Scotia:
1.10%, 12/13/16			5,000		5,008,190
1.70%, 6/11/18			3,525		3,526,375

See Notes to Financial Statements.



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	19

Schedule of Investments (continued)

CoreAlpha Bond Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)			Value
Banks (concluded)
Barclays Bank PLC:
2.00%, 3/16/18		USD	4,600	$	4,589,912
2.75%, 11/08/19			3,845		3,817,301
3.65%, 3/16/25			1,660		1,570,025
Cooperatieve Centrale Raiffeisen-Boerenleenbank BA, 2.25%, 1/14/19			3,500		3,522,872
Discover Bank/Greenwood Delaware, 2.00%, 2/21/18			2,600		2,593,638
Fifth Third Bancorp, 0.90%, 2/26/16			2,900		2,902,796
HSBC Bank USA NA, 5.88%, 11/01/34			1,200		1,405,663
HSBC Holdings PLC, 6.50%, 9/15/37			1,200		1,448,066
HSBC USA, Inc., 1.50%, 11/13/17			6,345		6,331,136
Lloyds Bank PLC, 1.75%, 5/14/18			5,610		5,604,367
Rabobank Nederland, 3.88%, 2/08/22			3,800		3,953,167
Royal Bank of Canada:
0.85%, 3/08/16			4,600		4,611,095
1.20%, 9/19/17			10,100		10,084,244
U.S. Bancorp, 2.20%, 11/15/16			4,000		4,068,960
Wachovia Bank NA, 6.00%, 11/15/17			5,400		5,948,321
Wells Fargo & Co.:
1.15%, 6/02/17			5,200		5,186,839
2.13%, 4/22/19			8,100		8,131,809
3.00%, 1/22/21			4,700		4,776,596
3.30%, 9/09/24			600		590,796
4.10%, 6/03/26			1,900		1,908,008
4.65%, 11/04/44			1,930		1,849,886

					95,937,832
Beverages — 0.5%
Anheuser-Busch InBev Worldwide, Inc., 3.75%, 7/15/42			1,500		1,324,356
Bottling Group LLC, 5.13%, 1/15/19			1,100		1,219,226
Diageo Capital PLC, 0.63%, 4/29/16			2,800		2,796,030
Dr Pepper Snapple Group, Inc., 2.90%, 1/15/16			1,250		1,263,882
PepsiCo, Inc.:
7.90%, 11/01/18			2,000		2,388,040
2.75%, 3/01/23			3,400		3,346,433
4.88%, 11/01/40			1,000		1,060,425
3.60%, 8/13/42			2,000		1,755,744

					15,154,136
Biotechnology — 0.5%
Amgen, Inc.:
2.30%, 6/15/16			3,240		3,275,899
5.38%, 5/15/43			2,100		2,228,466
Celgene Corp., 2.30%, 8/15/18			2,000		2,030,172
Gilead Sciences, Inc.:
3.05%, 12/01/16			1,400		1,440,251
2.05%, 4/01/19			5,000		5,028,375
4.50%, 2/01/45			2,300		2,291,136

					16,294,299
Capital Markets — 2.8%
The Bank of New York Mellon Corp., 0.70%, 3/04/16			4,600		4,599,728
The Bear Stearns Cos. LLC, 6.40%, 10/02/17			2,500		2,751,465
FMS Wertmanagement AoeR, 1.13%, 9/05/17			12,454		12,508,374
The Goldman Sachs Group, Inc.:
6.15%, 4/01/18			1,500		1,667,820
2.90%, 7/19/18			2,700		2,763,525
2.63%, 1/31/19			2,700		2,733,415
7.50%, 2/15/19			1,200		1,409,531
2.55%, 10/23/19			1,510		1,513,539
6.00%, 6/15/20			3,500		3,999,541
5.75%, 1/24/22			1,400		1,592,457
3.63%, 1/22/23			750		745,269
Corporate Bonds	Par (000)			Value
Capital Markets (concluded)
The Goldman Sachs Group, Inc. (concluded):
3.75%, 5/22/25		USD	4,165	$	4,110,197
6.75%, 10/01/37			4,350		5,102,324
6.25%, 2/01/41			3,350		3,964,879
4.80%, 7/08/44			2,000		1,974,264
Invesco Finance PLC, 5.38%, 11/30/43			2,400		2,631,065
Legg Mason, Inc., 2.70%, 7/15/19 USD			4,335		4,374,362
Morgan Stanley:
4.75%, 3/22/17			3,300		3,481,322
6.25%, 8/28/17			1,500		1,643,943
2.50%, 1/24/19			3,800		3,835,245
5.63%, 9/23/19			10,000		11,205,940
4.10%, 5/22/23			1,900		1,903,551
3.95%, 4/23/27			2,500		2,357,220
6.38%, 7/24/42			2,200		2,701,145

					85,570,121
Chemicals — 0.7%
CF Industries, Inc., 5.38%, 3/15/44			1,575		1,566,106
Ecolab, Inc., 1.00%, 8/09/15			2,900		2,900,478
LYB International Finance BV, 4.88%, 3/15/44			900		874,424
LyondellBasell Industries NV, 5.00%, 4/15/19			5,300		5,741,304
Monsanto Co.:
2.13%, 7/15/19			2,615		2,596,316
2.75%, 7/15/21			1,170		1,148,491
4.40%, 7/15/44			2,155		1,929,738
3.95%, 4/15/45			2,300		1,908,202
RPM International, Inc., 6.13%, 10/15/19			2,453		2,759,662

					21,424,721
Communications Equipment — 0.4%
Cisco Systems, Inc.:
2.13%, 3/01/19			5,000		5,034,770
2.45%, 6/15/20			6,000		6,042,720
Juniper Networks, Inc., 4.35%, 6/15/25			2,400		2,388,173

					13,465,663
Consumer Finance — 1.1%
Capital One Bank USA NA:
2.15%, 11/21/18			2,150		2,147,476
2.95%, 7/23/21			5,900		5,815,653
Capital One NA, 1.50%, 9/05/17			5,000		4,978,810
Caterpillar Financial Services Corp., 0.70%, 2/26/16			3,600		3,603,546
MasterCard, Inc.:
2.00%, 4/01/19			1,955		1,961,530
3.38%, 4/01/24			3,000		3,062,280
Navient Solutions, Inc., 0.00%, 10/03/22 (c)			5,700		4,608,011
Synchrony Financial:
3.00%, 8/15/19			5,200		5,237,014
3.75%, 8/15/21 USD			2,045		2,060,558

					33,474,878
Diversified Financial Services — 4.5%
American Express Credit Corp.:
2.75%, 9/15/15			2,600		2,610,062
2.38%, 3/24/17			3,000		3,061,863
1.55%, 9/22/17			2,865		2,874,334
American Honda Finance Corp., 1.13%, 10/07/16			4,635		4,648,251
Associates Corp. of North America, 6.95%, 11/01/18			964		1,109,067
Bank of America Corp.:
6.88%, 4/25/18			3,550		4,010,368
5.49%, 3/15/19			1,500		1,642,733

See Notes to Financial Statements.



20	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015

Schedule of Investments (continued)

CoreAlpha Bond Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)			Value
Diversified Financial Services (concluded)
Bank of America Corp. (concluded):
5.63%, 7/01/20		USD	2,500	$	2,817,645
5.70%, 1/24/22			8,000		9,081,288
3.30%, 1/11/23			1,400		1,378,772
4.13%, 1/22/24			2,500		2,562,173
6.11%, 1/29/37			800		896,654
Bank of America NA, 1.65%, 3/26/18			3,105		3,100,374
BNP Paribas SA:
1.38%, 3/17/17			5,000		4,994,010
2.40%, 12/12/18			2,000		2,023,350
CIT Group, Inc., 1.80%, 2/05/18			5,800		5,786,022
Citigroup, Inc.:
4.45%, 1/10/17			1,900		1,985,044
2.50%, 9/26/18			3,000		3,033,786
8.50%, 5/22/19			1,600		1,951,515
2.50%, 7/29/19			5,500		5,508,068
4.40%, 6/10/25			2,100		2,092,173
6.13%, 8/25/36			587		670,574
5.88%, 1/30/42			1,000		1,169,861
5.30%, 5/06/44			1,100		1,119,832
Deutsche Bank AG, 4.50%, 4/01/25			3,665		3,489,120
Ford Motor Credit Co. LLC:
1.70%, 5/09/16			2,800		2,803,648
3.00%, 6/12/17			5,400		5,523,606
1.72%, 12/06/17			5,100		5,073,521
General Electric Capital Corp.:
2.25%, 11/09/15			2,000		2,012,068
2.30%, 1/14/19			4,000		4,055,424
6.75%, 3/15/32			500		649,125
General Motors Financial Co., Inc.:
3.45%, 4/10/22			3,900		3,821,419
4.00%, 1/15/25			2,300		2,256,829
IntercontinentalExchange Group, Inc., 2.50%, 10/15/18			3,000		3,065,886
JPMorgan Chase & Co.:
1.13%, 2/26/16			4,500		4,512,960
2.00%, 8/15/17			4,100		4,141,582
4.25%, 10/15/20			6,000		6,415,578
3.25%, 9/23/22			2,600		2,583,134
3.20%, 1/25/23			1,900		1,863,488
3.38%, 5/01/23			1,800		1,747,834
5.60%, 7/15/41			1,000		1,133,761
4.95%, 6/01/45			1,100		1,069,273
JPMorgan Chase Bank NA, 6.00%, 10/01/17			800		872,282
Leucadia National Corp., 5.50%, 10/18/23			3,500		3,573,090
Morgan Stanley, 2.20%, 12/07/18			1,480		1,488,460
Private Export Funding Corp., Series U, 4.95%, 11/15/15			3,325		3,384,095

					135,664,002
Diversified Telecommunication Services — 1.6%
AT&T, Inc.:
2.40%, 8/15/16			1,250		1,267,196
2.38%, 11/27/18			5,565		5,613,710
2.45%, 6/30/20			1,110		1,088,098
5.55%, 8/15/41			3,250		3,329,852
4.80%, 6/15/44			1,800		1,676,698
British Telecommunications PLC, 1.25%, 2/14/17			1,550		1,547,542
CC Holdings GS V LLC/Crown Castle GS III Corp., 3.85%, 4/15/23			4,250		4,173,428
Verizon Communications, Inc.:
2.00%, 11/01/16			5,500		5,555,605
1.35%, 6/09/17			5,200		5,192,632
3.65%, 9/14/18			4,500		4,733,041
5.05%, 3/15/34			3,200		3,221,530
4.40%, 11/01/34			4,350		4,027,052
Corporate Bonds	Par (000)			Value
Diversified Telecommunication Services (concluded)
Verizon Communications, Inc. (concluded):
6.90%, 4/15/38		USD	900		1,076,491
7.35%, 4/01/39			1,700		2,120,869
4.75%, 11/01/41			2,100		1,967,066
6.55%, 9/15/43			1,475		1,725,387
5.01%, 8/21/54			800		734,070

					49,050,267
Electric Utilities — 1.6%
Berkshire Hathaway Energy Co., 6.50%, 9/15/37			1,500		1,840,198
Commonwealth Edison Co.:
5.88%, 2/01/33			2,000		2,351,966
4.70%, 1/15/44			601		632,523
Duke Energy Corp.:
2.15%, 11/15/16			2,100		2,132,275
5.05%, 9/15/19			2,000		2,215,128
Duke Energy Florida, Inc., 3.85%, 11/15/42			2,500		2,311,095
Exelon Corp., 5.10%, 6/15/45			2,400		2,409,595
MidAmerican Energy Holdings Co., 5.75%, 4/01/18			6,550		7,247,549
Mississippi Power Co., 4.25%, 3/15/42			1,700		1,513,505
NextEra Energy Capital Holdings, Inc., 2.70%, 9/15/19			3,500		3,523,506
Northern States Power Co., 5.25%, 7/15/35			2,500		2,825,047
Pacific Gas & Electric Co.:
5.63%, 11/30/17			1,500		1,637,279
3.25%, 9/15/21			1,400		1,422,991
3.75%, 8/15/42			1,500		1,313,382
PacifiCorp:
5.50%, 1/15/19			1,300		1,456,978
6.25%, 10/15/37			1,000		1,248,821
Progress Energy, Inc.:
4.88%, 12/01/19			3,100		3,385,237
4.40%, 1/15/21			3,700		3,960,221
Tampa Electric Co., 2.60%, 9/15/22			2,000		1,928,220
Xcel Energy, Inc., 0.75%, 5/09/16			3,200		3,190,656

					48,546,172
Electrical Equipment — 0.3%
Amphenol Corp.:
1.55%, 9/15/17			3,355		3,358,603
2.55%, 1/30/19			2,000		2,025,942
Roper Industries, Inc., 2.05%, 10/01/18			3,500		3,491,142

					8,875,687
Electronic Equipment, Instruments & Components — 0.2%
Arrow Electronics, Inc., 4.00%, 4/01/25			940		919,035
Flextronics International, Ltd., 4.75%, 6/15/25 (b)			1,800		1,785,960
Tyco Electronics Group SA, 6.55%, 10/01/17			2,900		3,217,788

					5,922,783
Energy Equipment & Services — 0.0%
Weatherford International Ltd., 4.50%, 4/15/22			712		668,615
Food & Staples Retailing — 0.6%
CVS Caremark Corp.:
6.13%, 8/15/16			2,300		2,431,482
2.25%, 12/05/18			3,125		3,163,581
Wal-Mart Stores, Inc., 1.13%, 4/11/18			2,000		1,992,360
Walgreens Boots Alliance, Inc.:
1.75%, 11/17/17			5,130		5,150,156
2.70%, 11/18/19			2,400		2,403,206
4.80%, 11/18/44			1,500		1,411,494

					16,552,279
Food Products — 0.6%
ConAgra Foods, Inc., 3.20%, 1/25/23			3,000		2,803,530

See Notes to Financial Statements.



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	21

Schedule of Investments (continued)

CoreAlpha Bond Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)			Value
Food Products (concluded)
The JM Smucker Co. (b):
2.50%, 3/15/20		USD	1,565	$	1,555,926
4.25%, 3/15/35			1,250		1,170,041
Kellogg Co.:
4.45%, 5/30/16			100		103,107
3.25%, 5/21/18			1,550		1,604,907
Kraft Heinz Foods Co., 5.20%, 7/15/45 (b)(d)			3,000		3,074,463
Mondelez International, Inc.:
4.13%, 2/09/16			2,000		2,037,994
2.25%, 2/01/19			2,000		2,003,226
Pilgrim’s Pride Corp., 5.75%, 3/15/25 (b)			2,870		2,898,700

					17,251,894
Gas Utilities — 0.1%
Southern California Gas Co., 3.75%, 9/15/42			1,800		1,668,407
Health Care Equipment & Supplies — 1.2%
Baxter International, Inc., 1.85%, 6/15/18			1,650		1,644,552
Becton Dickinson & Co.:
1.45%, 5/15/17			650		649,524
2.68%, 12/15/19			1,045		1,045,790
Boston Scientific Corp.:
2.65%, 10/01/18			2,000		2,028,810
2.85%, 5/15/20			705		700,026
3.85%, 5/15/25			4,400		4,269,104
Covidien International Finance SA:
4.20%, 6/15/20			5,045		5,434,812
6.55%, 10/15/37			2,600		3,313,066
Mallinckrodt International Finance SA/Mallinckrodt CB LLC, 4.88%, 4/15/20 (b)			725		737,724
Medtronic, Inc. (b):
2.50%, 3/15/20			2,495		2,499,167
3.15%, 3/15/22			2,995		3,008,418
4.38%, 3/15/35			1,690		1,677,029
Stryker Corp., 4.38%, 5/15/44			3,000		2,909,676
Zimmer Holdings, Inc.:
2.00%, 4/01/18			1,760		1,760,630
2.70%, 4/01/20			4,530		4,507,590

					36,185,918
Health Care Providers & Services — 1.2%
AmerisourceBergen Corp.:
1.15%, 5/15/17			6,000		5,989,758
3.25%, 3/01/25			3,000		2,886,069
Cardinal Health, Inc.:
1.70%, 3/15/18			2,200		2,191,013
3.75%, 9/15/25			2,950		2,934,899
Express Scripts Holding Co., 3.13%, 5/15/16			3,000		3,049,284
HCA, Inc., 3.75%, 3/15/19			3,135		3,158,513
Humana, Inc.:
2.63%, 10/01/19			2,195		2,209,298
4.95%, 10/01/44			1,800		1,766,198
McKesson Corp.:
1.40%, 3/15/18			4,500		4,451,017
4.88%, 3/15/44			800		795,005
Quest Diagnostics, Inc., 2.50%, 3/30/20			2,335		2,316,710
UnitedHealth Group, Inc., 4.70%, 2/15/21			3,100		3,418,745

					35,166,509
Hotels, Restaurants & Leisure — 0.4%
McDonald’s Corp., 6.30%, 10/15/37			1,000		1,182,611
Starbucks Corp., 0.88%, 12/05/16			2,450		2,452,070
Wyndham Worldwide Corp.:
4.25%, 3/01/22			1,550		1,553,314
3.90%, 3/01/23			1,550		1,518,628
Yum! Brands, Inc.:
4.25%, 9/15/15			2,000		2,011,016
5.30%, 9/15/19			2,241		2,462,409

					11,180,048
Corporate Bonds	Par (000)			Value
Household Products — 0.1%
Whirlpool Corp., 1.35%, 3/01/17		USD	2,525		2,532,428
Independent Power and Renewable Electricity Producers — 0.1%
Constellation Energy Group, Inc., 5.15%, 12/01/20			1,200		1,327,883
Exelon Generation Co. LLC, 5.75%, 10/01/41			500		518,923
PSEG Power LLC:
2.45%, 11/15/18			400		401,303
4.15%, 9/15/21			1,150		1,206,060
Southern Power Co., 5.15%, 9/15/41			1,000		1,030,087

					4,484,256
Insurance — 1.1%
ACE INA Holdings, Inc., 3.35%, 5/15/24			3,155		3,159,366
Aflac, Inc.:
3.63%, 11/15/24			5,000		5,017,015
3.25%, 3/17/25			3,000		2,896,323
Berkshire Hathaway, Inc., 1.90%, 1/31/17			2,400		2,437,447
Fidelity National Financial, Inc., 5.50%, 9/01/22			1,225		1,288,694
Markel Corp.:
5.35%, 6/01/21			1,300		1,446,873
3.63%, 3/30/23			1,300		1,281,271
Marsh & McLennan Cos., Inc., 2.35%, 9/10/19			2,940		2,949,514
Protective Life Corp., 8.45%, 10/15/39			372		519,873
Prudential Financial, Inc., 4.75%, 9/17/15			3,900		3,930,174
Willis Group Holdings PLC:
4.13%, 3/15/16			2,600		2,652,967
5.75%, 3/15/21			1,150		1,290,106
XLIT Ltd.:
5.75%, 10/01/21			1,400		1,603,643
4.45%, 3/31/25			1,410		1,397,670

					31,870,936
Internet Software & Services — 0.7%
Baidu, Inc.:
3.25%, 8/06/18			7,000		7,204,260
2.75%, 6/09/19			1,072		1,072,535
eBay, Inc.:
2.20%, 8/01/19			5,400		5,377,714
3.45%, 8/01/24			2,200		2,118,175
Equinix, Inc.:
5.38%, 1/01/22			1,855		1,859,638
5.75%, 1/01/25			1,400		1,386,000
VeriSign, Inc., 4.63%, 5/01/23			1,325		1,273,656

					20,291,978
IT Services — 0.6%
Alibaba Group Holding Ltd. (b):
2.50%, 11/28/19			5,415		5,355,890
3.60%, 11/28/24			1,295		1,248,674
International Business Machines Corp.:
2.00%, 1/05/16			8,600		8,672,437
7.63%, 10/15/18			2,050		2,433,014

					17,710,015
Leisure Products — 0.1%
Royal Caribbean Cruises Ltd., 5.25%, 11/15/22			3,654		3,779,358
Life Sciences Tools & Services — 0.1%
Thermo Fisher Scientific, Inc., 3.20%, 3/01/16			2,800		2,843,131
Machinery — 0.2%
Danaher Corp., 2.30%, 6/23/16			450		455,972
Illinois Tool Works, Inc., 1.95%, 3/01/19			4,000		4,020,148
Ingersoll-Rand Global Holding Co. Ltd., 2.88%, 1/15/19			400		406,704
Trinity Acquisition PLC, 6.13%, 8/15/43			650		708,395

					5,591,219

See Notes to Financial Statements.



22	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015

Schedule of Investments (continued)

CoreAlpha Bond Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)			Value
Media — 1.0%
Altice Financing SA, 6.63%, 2/15/23 (b)		USD	960	$	953,088
Comcast Corp., 5.70%, 5/15/18			2,450		2,725,434
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., 5.15%, 3/15/42			3,750		3,528,007
DISH DBS Corp.:
7.88%, 9/01/19			2,600		2,883,400
6.75%, 6/01/21			1,200		1,251,000
NBCUniversal Enterprise, Inc., 1.66%, 4/15/18 (b)			1,000		1,002,049
Outfront Media Capital LLC/Outfront Media Capital Corp., 5.25%, 2/15/22			800		810,000
Scripps Networks Interactive, Inc., 2.70%, 12/15/16			2,300		2,345,926
Thomson Reuters Corp., 0.88%, 5/23/16			1,600		1,596,760
Time Warner Cable, Inc.:
5.00%, 2/01/20			2,300		2,483,110
4.50%, 9/15/42			1,700		1,386,693
Time Warner, Inc.:
2.10%, 6/01/19			4,100		4,073,063
4.65%, 6/01/44			1,500		1,425,974
Viacom, Inc., 2.50%, 9/01/18			4,300		4,344,802

					30,809,306
Metals & Mining — 0.0%
Southern Copper Corp., 5.88%, 4/23/45			1,470		1,398,264
Multi-Utilities — 0.3%
Consolidated Edison Co. of New York, Inc., 4.20%, 3/15/42			2,400		2,280,273
Dominion Resources, Inc.:
6.40%, 6/15/18			1,050		1,184,031
4.45%, 3/15/21			2,100		2,251,717
4.05%, 9/15/42			1,700		1,537,708
SCANA Corp., 4.13%, 2/01/22			500		503,697

					7,757,426
Oil, Gas & Consumable Fuels — 3.4%
BP Capital Markets PLC:
3.13%, 10/01/15			700		704,706
3.20%, 3/11/16			1,500		1,524,410
2.24%, 5/10/19			3,000		3,022,644
Buckeye Partners LP:
2.65%, 11/15/18			4,900		4,882,110
4.35%, 10/15/24			1,900		1,862,735
CNOOC Finance 2013 Ltd., 1.75%, 5/09/18			875		871,476
CNOOC Finance 2015 Australia Pty, Ltd., 2.63%, 5/05/20			3,500		3,454,245
CNOOC Nexen Finance 2014 ULC, 1.63%, 4/30/17			6,800		6,809,697
ConocoPhillips Canada Funding Co. I, 5.63%, 10/15/16			500		528,593
DCP Midstream Operating LP, 3.25%, 10/01/15			2,000		1,999,918
Ecopetrol SA, 5.88%, 5/28/45			850		750,125
El Paso Pipeline Partners Operating Co. LLC, 4.30%, 5/01/24			4,500		4,440,798
Energy Transfer Equity LP, 7.50%, 10/15/20			5,998		6,762,745
Energy Transfer Partners LP:
9.70%, 3/15/19			842		1,038,100
9.00%, 4/15/19			373		447,532
4.15%, 10/01/20			3,950		4,059,652
Enterprise Products Operating LLC, 3.20%, 2/01/16			3,000		3,036,558
Hess Corp., 1.30%, 6/15/17			1,110		1,104,286
Kinder Morgan Energy Partners LP:
3.50%, 3/01/21			850		838,102
5.63%, 9/01/41			1,895		1,777,123
Kinder Morgan, Inc.:
3.05%, 12/01/19			865		864,042
Corporate Bonds	Par (000)			Value
Oil, Gas & Consumable Fuels (concluded)
Kinder Morgan, Inc. (concluded):
4.30%, 6/01/25		USD	3,860		3,726,417
5.55%, 6/01/45			2,550		2,356,927
Magellan Midstream Partners LP, 5.15%, 10/15/43			1,350		1,365,205
Marathon Oil Corp., 0.90%, 11/01/15			1,300		1,299,676
Marathon Petroleum Corp., 4.75%, 9/15/44			1,365		1,245,830
Occidental Petroleum Corp., 3.50%, 6/15/25			3,455		3,443,070
Petrobras International Finance Co.:
3.50%, 2/06/17			5,900		5,836,457
5.38%, 1/27/21			1,850		1,779,330
Petroleos Mexicanos:
5.50%, 1/21/21			1,100		1,192,950
4.88%, 1/24/22			1,300		1,351,831
4.50%, 1/23/26 (b)			2,000		1,954,800
6.50%, 6/02/41			500		520,000
6.38%, 1/23/45			2,900		2,976,125
Shell International Finance BV:
2.13%, 5/11/20			1,745		1,741,254
4.38%, 5/11/45			2,700		2,665,094
Statoil ASA:
1.95%, 11/08/18			2,840		2,855,012
2.75%, 11/10/21			5,680		5,672,599
Total Capital International SA, 2.10%, 6/19/19			3,300		3,320,407
Valero Energy Corp., 6.63%, 6/15/37			3,000		3,388,233
The Williams Cos., Inc., 4.55%, 6/24/24			2,115		2,049,613

					101,520,427
Personal Products — 0.1%
The Procter & Gamble Co., 1.90%, 11/01/19			3,270		3,277,851
Pharmaceuticals — 2.1%
Abbott Laboratories:
2.55%, 3/15/22			4,195		4,098,507
2.95%, 3/15/25			3,135		3,013,851
AbbVie, Inc.:
1.20%, 11/06/15			1,300		1,301,187
2.50%, 5/14/20			1,590		1,573,688
3.60%, 5/14/25			1,045		1,032,873
4.70%, 5/14/45			1,300		1,278,724
Actavis Funding SCS:
2.35%, 3/12/18			4,450		4,473,492
3.45%, 3/15/22			3,565		3,531,232
3.85%, 6/15/24			5,100		5,038,535
3.80%, 3/15/25			990		972,499
4.55%, 3/15/35			1,000		950,772
4.75%, 3/15/45			580		552,191
AstraZeneca PLC, 6.45%, 9/15/37			2,400		3,055,022
Baxalta, Inc. (b):
2.88%, 6/23/20			2,565		2,561,258
5.25%, 6/23/45			620		623,383
Bayer US Finance LLC, 1.50%, 10/06/17 (b)			5,590		5,614,093
Eli Lilly & Co., 3.70%, 3/01/45			455		412,777
GlaxoSmithKline Capital, Inc.:
0.70%, 3/18/16			2,500		2,503,877
5.65%, 5/15/18			1,200		1,339,306
Laboratory Corp. of America Holdings:
3.20%, 2/01/22			1,965		1,937,282
4.70%, 2/01/45			2,657		2,433,695
Novartis Capital Corp.:
3.40%, 5/06/24			2,100		2,130,988
4.40%, 5/06/44			4,300		4,432,986
Pfizer, Inc.:
6.20%, 3/15/19			1,500		1,715,776
4.30%, 6/15/43			2,500		2,442,887
Zoetis, Inc., 1.15%, 2/01/16			3,000		3,000,660

					62,021,541

See Notes to Financial Statements.



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	23

Schedule of Investments (continued)

CoreAlpha Bond Master Portfolio

(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)			Value
Professional Services — 0.2%
The Dun & Bradstreet Corp., 2.88%, 11/15/15		USD	600	$	604,717
Verisk Analytics, Inc., 4.00%, 6/15/25			4,650		4,553,764

					5,158,481
Real Estate Investment Trusts (REITs) — 1.1%
Alexandria Real Estate Equities, Inc., 2.75%, 1/15/20			4,000		3,959,320
American Tower Corp.:
4.50%, 1/15/18			2,100		2,222,191
3.40%, 2/15/19			1,768		1,809,226
2.80%, 6/01/20			4,000		3,944,416
5.05%, 9/01/20			1,300		1,412,661
3.45%, 9/15/21			2,450		2,438,188
4.70%, 3/15/22			2,900		3,023,795
5.00%, 2/15/24			2,000		2,114,282
Corrections Corp. of America:
4.13%, 4/01/20			2,500		2,487,500
4.63%, 5/01/23			2,425		2,376,500
HCP, Inc., 6.70%, 1/30/18			4,000		4,460,976
Simon Property Group LP, 4.75%, 3/15/42			1,900		1,953,740
WEA Finance LLC/Westfield UK & Europe Finance PLC, 2.70%, 9/17/19 (b)			1,945		1,947,865

					34,150,660
Road & Rail — 0.3%
Burlington Northern Santa Fe LLC:
5.40%, 6/01/41			2,700		2,975,508
4.55%, 9/01/44			2,110		2,076,915
Norfolk Southern Corp., 5.75%, 1/15/16			2,425		2,488,984
Union Pacific Corp., 6.13%, 2/15/20			1,300		1,482,256

					9,023,663
Semiconductors & Semiconductor Equipment — 0.7%
Intel Corp.:
3.30%, 10/01/21			2,100		2,191,867
4.80%, 10/01/41			350		351,099
4.25%, 12/15/42			1,100		1,033,221
KLA-Tencor Corp., 3.38%, 11/01/19			930		955,285
QUALCOMM, Inc.:
1.40%, 5/18/18			3,135		3,125,266
4.80%, 5/20/45			1,400		1,343,444
Seagate HDD Cayman:
3.75%, 11/15/18			7,500		7,819,005
4.75%, 6/01/23			3,100		3,148,571
4.75%, 1/01/25 (b)			1,925		1,913,165

					21,880,923
Software — 0.1%
Microsoft Corp., 3.75%, 2/12/45			2,040		1,839,347
Oracle Corp.:
5.25%, 1/15/16			1,500		1,538,934
5.75%, 4/15/18			550		611,921

					3,990,202
Specialty Retail — 0.9%
Advance Auto Parts, Inc., 4.50%, 1/15/22			3,100		3,254,411
AutoZone, Inc., 1.30%, 1/13/17			3,850		3,856,380
The Home Depot, Inc.:
5.88%, 12/16/36			2,000		2,407,240
5.40%, 9/15/40			2,000		2,278,216
5.95%, 4/01/41			800		973,835
L Brands, Inc.:
6.90%, 7/15/17			2,167		2,362,030
8.50%, 6/15/19			4,000		4,717,480
O’Reilly Automotive, Inc., 4.63%, 9/15/21			5,300		5,823,460
QVC, Inc., 4.45%, 2/15/25			1,333		1,286,270

					26,959,322
Corporate Bonds	Par (000)			Value
Technology Hardware, Storage & Peripherals — 0.6%
Apple, Inc.:
2.85%, 5/06/21		USD	5,500		5,580,839
3.20%, 5/13/25			2,250		2,238,365
3.85%, 5/04/43			3,300		3,003,594
4.38%, 5/13/45			1,420		1,399,334
Hewlett-Packard Co.:
3.00%, 9/15/16			3,000		3,060,942
2.75%, 1/14/19			4,000		4,043,400

					19,326,474
Tobacco — 1.4%
Altria Group, Inc.:
4.13%, 9/11/15			2,600		2,614,661
5.38%, 1/31/44			7,200		7,615,469
Lorillard Tobacco Co., 3.50%, 8/04/16			650		664,583
Philip Morris International, Inc.:
5.65%, 5/16/18			4,300		4,775,344
1.88%, 1/15/19			3,550		3,544,359
2.90%, 11/15/21			1,400		1,412,830
6.38%, 5/16/38			2,500		3,067,293
4.13%, 3/04/43			2,000		1,845,188
4.25%, 11/10/44			600		564,183
Reynolds American, Inc.:
1.05%, 10/30/15			2,000		1,993,140
2.30%, 6/12/18			1,730		1,742,933
3.25%, 6/12/20			745		754,612
4.00%, 6/12/22			955		975,500
3.25%, 11/01/22			2,300		2,215,259
4.85%, 9/15/23			900		950,910
4.45%, 6/12/25			1,300		1,324,467
4.75%, 11/01/42			1,700		1,542,209
6.15%, 9/15/43			750		805,450
5.85%, 8/15/45			2,185		2,291,836

					40,700,226
Wireless Telecommunication Services — 0.2%
Crown Castle International Corp., 4.88%, 4/15/22			2,800		2,828,000
Vodafone Group PLC:
5.63%, 2/27/17			950		1,009,397
2.95%, 2/19/23			1,200		1,120,810
4.38%, 2/19/43			545		469,219

					5,427,426
Total Corporate Bonds — 38.3%					1,151,739,523



Foreign Agency Obligations
Brazilian Government International Bond:
5.63%, 1/07/41			150		143,250
5.00%, 1/27/45			2,500		2,162,500
Canada Government International Bond, 1.13%, 3/19/18			6,430		6,442,075
Colombia Government International Bond, 4.00%, 2/26/24			2,210		2,198,950
Export-Import Bank of Korea:
2.38%, 8/12/19			5,600		5,619,197
4.00%, 1/29/21			1,446		1,539,669
Hashemite Kingdom of Jordan Government AID Bonds:
2.58%, 6/30/22			7,000		7,035,000
3.00%, 6/30/25			2,100		2,105,250
Mexico Government International Bond:
3.50%, 1/21/21			2,915		2,973,300
6.75%, 9/27/34			2,400		3,012,000
6.05%, 1/11/40			3,088		3,504,880
4.75%, 3/08/44			3,100		2,945,000
4.60%, 1/23/46			863		798,275

See Notes to Financial Statements.



24	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015

Schedule of Investments (continued)

CoreAlpha Bond Master Portfolio

(Percentages shown are based on Net Assets)


Foreign Agency Obligations	Par (000)				Value
Tunisia Government AID Bonds, 2.45%, 7/24/21		USD	327		$	330,726
Uruguay Government International Bond, 5.10%, 6/18/50			320			304,800
Total Foreign Agency Obligations — 1.4%						41,114,872



Municipal Bonds
Bay Area Toll Authority, RB, Build America Bonds, San Francisco Toll Bridge, Series S-1, 7.04%, 4/01/50			800			1,079,936
Chicago Transit Authority, RB, Series B, 6.90%, 12/01/40			450			511,461
City & County of San Francisco California Public Utilities Commission Water Revenue, RB, Build America Bonds, Sub-Series G, 6.95%, 11/01/50			400			537,632
City of Chicago Illinois Waterworks Transmission, RB, Build America Bonds, 2nd Lien, Series B, 6.74%, 11/01/40			150			170,123
City of Los Angeles California Department of Water & Power, RB, Build America Bonds, Series D, 6.57%, 7/01/45			320			421,427
City of New York New York Transitional Finance Authority, RB, Build America Bonds, Future Tax Secured, Sub-Series B-1, 5.57%, 11/01/38			450			537,633
City of New York New York Water & Sewer System, Refunding RB, 2nd General Resolution, Build America Bonds, Fiscal 2010, Series EE, 6.01%, 6/15/42			1,000			1,261,370
County of Orange California Local Transportation Authority, Refunding RB, Build America Bonds, Series A, 6.91%, 2/15/41			450			597,861
County of San Diego California Regional Transportation Commission, RB, Build America Bonds, Series A, 5.91%, 4/01/48			600			754,608
Florida Hurricane Catastrophe Fund Finance Corp., RB, Series A, 1.30%, 7/01/16			1,725			1,731,486
Metropolitan Water District of Southern California, RB, Build America Bonds, Series A, 6.95%, 7/01/40			1,200			1,421,220
New Jersey State Turnpike Authority, RB, Build America Bonds, Series A, 7.10%, 1/01/41			700			940,275
Port Authority of New York & New Jersey, RB, 164th Series, 5.65%, 11/01/40			800			923,080
Port Authority of New York & New Jersey, Refunding RB, 174th Series, 4.46%, 10/01/62			700			670,103
State of California, GO, Build America Bonds, Various Purpose:
7.55%, 4/01/39			1,150			1,662,819
7.63%, 3/01/40			1,150			1,659,887
7.60%, 11/01/40			250			370,428
State of Illinois, GO:
Build America Bonds, 7.35%, 7/01/35			650			708,961
Pension, 5.10%, 6/01/33			1,000			928,150
State of Mississippi, GO, Refunding, Build America Bonds, Series F, 5.25%, 11/01/34			600			672,360
State of New York Dormitory Authority, RB, Build America Bonds, General Purpose, Series H, 5.39%, 3/15/40			675			787,921
State of Oregon Department of Transportation, RB, Sub-Lien, Series A, 5.83%, 11/15/34			400			488,408
University of California, Refunding RB, Series AJ, 4.60%, 5/15/31			1,000			1,049,050
University of Missouri, RB, Build America Bonds, Series A, 5.79%, 11/01/41			300			375,654
Total Municipal Bonds — 0.7%						20,261,853
Non-Agency Mortgage-Backed Securities	Par (000)				Value
Collateralized Mortgage Obligations — 1.5%
Citicorp Mortgage Securities Trust, Series 2006-1, Class 2A1, 5.00%, 2/25/21		USD	159			164,141
Citigroup Mortgage Loan Trust, Series 2014-A, Class A, 4.00%, 1/25/35 (a)(b)			1,076			1,118,434
Connecticut Avenue Securities Series, Series 2014-C01, Class M1, 1.79%, 1/25/24 (a)			3,643			3,664,302
Credit Suisse First Boston Mortgage Securities Corp., Series 2005-7, Class 1A6, 5.25%, 8/25/35			250			256,570
CSMC Trust (a)(b):
Series 2009-13R, Class 5A1, 0.96%, 1/26/35			2,559			2,550,113
Series 2010-20R, Class 7A6, 3.50%, 3/27/37			1,002			1,001,721
Series 2011-4R, Class 4A6, 4.00%, 8/27/37			551			555,423
Series 2013-8R, Class 7A1, 0.34%, 4/27/37			1,014			993,700
Series 2013-8R, Class 8A1, 0.42%, 5/27/37			3,524			3,427,692
Fannie Mae, Class 1M1 (a):
Series 2014-C04, 2.14%, 11/25/24			2,258			2,274,856
Series 2015-C01, 1.69%, 2/25/25			3,575			3,579,797
Fannie Mae Connecticut Avenue Securities, Series 2014-C02, Class 2M1, 1.14%, 5/25/24 (a)			7,632			7,587,649
Freddie Mac, Series 2014-HQ2, Class M1, 1.64%, 9/25/24 (a)			1,291			1,295,705
GreenPoint Mortgage Funding Trust, Series 2006-AR4, Class A1A, 0.29%, 9/25/46 (a)			—	(e)		10
Nomura Resecuritization Trust, Series 2014-1R, Class 5A1, 0.33%, 10/26/36 (a)(b)			3,738			3,642,703
Puma Finance Property Ltd., Series G5, Class A1, 0.42%, 2/21/38 (a)(b)			557			554,621
RALI Trust:
Series 2004-QS4, Class A7, 4.00%, 3/25/34			22			22,233
Series 2004-QS5, Class A5, 4.75%, 4/25/34			454			462,722
Series 2004-QS9, Class A1, 5.00%, 6/25/19			205			205,687
RBSSP Resecuritization Trust, Series 2009-6, Class 13A4, 2.47%, 8/26/35 (a)(b)			1,495			1,503,239
Structured Agency Credit Risk Debt Notes, Class M1 (a):
Series 2013-DN1, 3.59%, 7/25/23			2,753			2,839,106
Series 2013-DN2, 1.64%, 11/25/23			6,534			6,542,116

						44,242,540
Commercial Mortgage-Backed Securities — 12.4%
Banc of America Commercial Mortgage Trust:
Series 2006-1, Class AM, 5.42%, 9/10/45 (a)			2,650			2,684,585
Series 2006-4, Class A4, 5.63%, 7/10/46			5,181			5,316,446
Series 2006-5, Class AM, 5.45%, 9/10/47			1,520			1,580,377
Series 2006-6, Class A4, 5.36%, 10/10/45			3,580			3,665,562
Series 2007-3, Class A4, 5.57%, 6/10/49 (a)			5,381			5,685,651
Series 2007-4, Class A4, 5.74%, 2/10/51 (a)			2,666			2,859,808
Series 2007-5, Class A4, 5.49%, 2/10/51			2,935			3,099,099
Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2005-6, Class A4, 5.16%, 9/10/47 (a)			9,262			9,309,202
Bear Stearns Commercial Mortgage Securities Trust:
Series 2005-PW10, Class AM, 5.45%, 12/11/40 (a)			2,710			2,750,783
Series 2005-PWR8, Class AJ, 4.75%, 6/11/41			345			344,754

See Notes to Financial Statements.



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	25

Schedule of Investments (continued)

CoreAlpha Bond Master Portfolio

(Percentages shown are based on Net Assets)


Non-Agency Mortgage-Backed Securities	Par (000)			Value
Commercial Mortgage-Backed Securities (continued)
Bear Stearns Commercial Mortgage Securities Trust (concluded):
Series 2005-PWR9, Class A4B, 4.94%, 9/11/42		USD	2,100	$	2,100,076
Series 2006-PW11, Class A4, 5.43%, 3/11/39 (a)			2,763		2,798,035
CD Commercial Mortgage Trust, Series 2007-CD4, Class AMFX, 5.37%, 12/11/49 (a)			500		518,713
Citigroup Commercial Mortgage Trust (a):
Series 2007-C6, Class A4, 5.71%, 12/10/49			11,100		11,873,171
Series 2010-RR2, Class CA3A, 5.31%, 12/19/39 (b)			620		636,824
Citigroup/Deutsche Bank Commercial Mortgage Trust, Series 2007-CD4, Class A4, 5.32%, 12/11/49			11,095		11,560,347
Commercial Mortgage Trust:
Series 2006-C7, Class AM, 5.77%, 6/10/46 (a)			3,435		3,559,948
Series 2007-C9, Class A4, 5.80%, 12/10/49 (a)			3,244		3,475,924
Series 2007-C9, Class AJ, 5.65%, 12/10/49 (a)			3,100		3,238,865
Series 2007-GG9, Class AM, 5.48%, 3/10/39			1,980		2,067,732
Series 2013-CR09, Class A4, 4.23%, 7/10/45 (a)			600		652,239
Series 2013-CR12, Class A3, 3.77%, 10/10/46			990		1,040,921
Series 2013-CR13, Class A4, 4.19%, 11/10/23 (a)			3,290		3,536,401
Series 2013-LC6, Class AM, 3.28%, 1/10/46			1,290		1,303,021
Series 2014-CR17, Class A5, 3.98%, 5/10/47			2,240		2,367,035
Series 2014-CR21, Class A3, 3.53%, 12/10/47			3,190		3,240,472
Credit Suisse Commercial Mortgage Trust:
Series 2006-C2, Class A3, 5.67%, 3/15/39 (a)			2,014		2,043,220
Series 2006-C3, Class A3, 5.81%, 6/15/38 (a)			9,570		9,774,153
Series 2006-C3, Class AM, 5.81%, 6/15/38 (a)			3,368		3,496,829
Series 2006-C5, Class A3, 5.31%, 12/15/39			4,382		4,530,809
Series 2007-C1, Class A3, 5.38%, 2/15/40			7,134		7,464,308
Series 2007-C2, Class A3, 5.54%, 1/15/49 (a)			2,250		2,373,183
Series 2007-C2, Class AM, 5.60%, 1/15/49 (a)			950		998,680
Credit Suisse First Boston Mortgage Securities Corp., Series 2005-C5, Class AJ, 5.10%, 8/15/38 (a)			4,154		4,162,067
Csail Commercial Mortgage Trust, Series 2015-C2, Class A4, 3.50%, 6/15/57			2,250		2,287,730
DBRR Trust, Series 2013-EZ2, Class A, 0.85%, 2/25/45 (a)(b)			201		202,219
GE Capital Commercial Mortgage Corp. (a):
Series 2005-C3, Class AJ, 5.07%, 7/10/45			700		699,706
Series 2006-C1, Class A4, 5.28%, 3/10/44			5,529		5,590,541
GMAC Commercial Mortgage Securities, Inc. Trust, Series 2006-C1, Class A4, 5.24%, 11/10/45 (a)			3,723		3,742,367
GS Mortgage Securities Corp. II, Series 2015-GC30:
Class A4, 3.38%, 5/10/50			2,125		2,121,751
Class B, 4.02%, 5/10/50 (a)			950		944,077
Non-Agency Mortgage-Backed Securities	Par (000)			Value
Commercial Mortgage-Backed Securities (continued)
GS Mortgage Securities Trust:
Series 2006-GG6, Class AM, 5.55%, 4/10/38 (a)		USD	4,100		4,168,359
Series 2007-GG10, Class A4, 5.79%, 8/10/45 (a)			3,502		3,736,796
Series 2009-RR1, Class GGA, 5.79%, 7/12/38 (a)(b)			1,735		1,764,177
Series 2012-GCJ7, Class AS, 4.09%, 5/10/45			930		990,814
Series 2013-GC14, Class A5, 4.24%, 8/10/46			1,620		1,752,555
Series 2013-GC16, Class A3, 4.24%, 11/10/46			1,580		1,710,988
Series 2014-GC18, Class A4, 4.07%, 1/10/47			1,800		1,912,050
Series 2015-GC28, Class A5, 3.40%, 2/10/48			1,700		1,702,518
JPMBB Commercial Mortgage Securities Trust:
Series 2013-C14, Class A4, 4.13%, 8/15/46 (a)			1,400		1,500,800
Series 2013-C14, Class AS, 4.41%, 8/15/46 (a)			760		816,822
Series 2013-C15, Class B, 4.93%, 11/15/45			1,730		1,869,839
Series 2013-C17, Class A4, 4.20%, 1/15/47			1,700		1,833,401
Series 2014-C22, Class A4, 3.80%, 9/15/47			4,030		4,176,446
JPMorgan Chase Commercial Mortgage Securities Trust:
Series 2004-C1, Class H, 5.89%, 1/15/38 (a)(b)			3,371		3,369,824
Series 2005-CB13, Class AM, 5.28%, 1/12/43 (a)			2,060		2,075,281
Series 2005-LDP3, Class AJ, 4.93%, 8/15/42 (a)			7,383		7,380,652
Series 2005-LDP5, Class AJ, 5.36%, 12/15/44 (a)			1,935		1,964,890
Series 2005-LDP5, Class AM, 5.28%, 12/15/44 (a)			5,070		5,140,787
Series 2006-CB14, Class AM, 5.47%, 12/12/44 (a)			6,526		6,615,119
Series 2006-CB16, Class A4, 5.55%, 5/12/45			854		876,059
Series 2006-CB17, Class A4, 5.43%, 12/12/43			9,720		10,096,905
Series 2006-LDP8, Class A1A, 5.40%, 5/15/45			313		323,970
Series 2006-LDP8, Class AM, 5.44%, 5/15/45			6,171		6,412,638
Series 2007-CB20, Class A4, 5.79%, 2/12/51 (a)			3,768		4,037,861
Series 2011-C5, Class A3, 4.17%, 8/15/46			1,100		1,193,526
Series 2012-C6, Class A3, 3.51%, 5/15/45			815		853,298
Series 2012-CBX, Class AS, 4.27%, 6/15/45			1,110		1,188,810
LB Commercial Mortgage Trust, Series 2007-C3, Class A4, 5.90%, 7/15/44 (a)			2,032		2,172,445
LB-UBS Commercial Mortgage Trust:
Series 2006-C1, Class AM, 5.22%, 2/15/31 (a)			740		750,833
Series 2006-C3, Class A1A, 5.64%, 3/15/39 (a)			2,965		3,025,263
Series 2006-C4, Class AM, 5.85%, 6/15/38 (a)			3,376		3,515,831
Series 2006-C7, Class A2, 5.30%, 11/15/38			1,896		1,910,396
Series 2006-C7, Class AM, 5.38%, 11/15/38			1,000		1,041,639
Series 2007-C1, Class A4, 5.42%, 2/15/40			4,129		4,332,201
Series 2007-C2, Class A3, 5.43%, 2/15/40			7,288		7,699,082

See Notes to Financial Statements.



26	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015

Schedule of Investments (continued)

CoreAlpha Bond Master Portfolio

(Percentages shown are based on Net Assets)


Non-Agency Mortgage-Backed Securities	Par (000)			Value
Commercial Mortgage-Backed Securities (continued)
LB-UBS Commercial Mortgage Trust (concluded):
Series 2007-C2, Class AM, 5.49%, 2/15/40 (a)		USD	1,800	$	1,888,024
Series 2007-C7, Class A3, 5.87%, 9/15/45 (a)			2,965		3,208,180
Merrill Lynch Mortgage Trust (a):
Series 2005-CIP1, Class AM, 5.11%, 7/12/38			3,935		3,936,157
Series 2006-C2, Class A4, 5.74%, 8/12/43			2,221		2,291,944
Series 2006-C2, Class AM, 5.78%, 8/12/43			1,500		1,560,087
Merrill Lynch/Countrywide Commercial Mortgage Trust, Series 2007-7, Class A4, 5.74%, 6/12/50 (a)			2,451		2,610,087
ML-CFC Commercial Mortgage Trust (a):
Series 2006-1, Class A4, 5.47%, 2/12/39			12,461		12,627,970
Series 2006-2, Class A4, 5.87%, 6/12/46			3,234		3,311,749
Series 2006-3, Class AM, 5.46%, 7/12/46			2,000		2,085,646
Monty Parent Issuer 1 LLC, Series 2013-LTR1, Class B, 4.25%, 11/20/28 (b)			1,254		1,253,682
Morgan Stanley Bank of America Merrill Lynch Trust:
Series 2013-C10, Class A4, 4.08%, 7/15/46 (a)			1,560		1,672,064
Series 2014-C15, Class C, 4.90%, 4/15/47 (a)			1,700		1,762,237
Series 2015-C21, Class A4, 3.34%, 3/15/48			950		947,013
Morgan Stanley Capital I Trust:
Series 2005-IQ10, Class AJ, 5.31%, 9/15/42 (a)			1,200		1,206,608
Series 2006-HQ8, Class A4, 5.42%, 3/12/44 (a)			3,989		4,013,437
Series 2006-HQ8, Class AM, 5.41%, 3/12/44 (a)			990		1,006,774
Series 2006-T21, Class A4, 5.16%, 10/12/52 (a)			1,332		1,337,774
Series 2007-HQ11, Class A4, 5.45%, 2/12/44 (a)			2,961		3,108,283
Series 2007-IQ13, Class AM, 5.41%, 3/15/44			2,692		2,840,357
Series 2007-IQ16, Class A4, 5.81%, 12/12/49			5,999		6,437,698
Series 2007-T25, Class A3, 5.51%, 11/12/49 (a)			3,543		3,713,064
Series 2007-T27, Class A4, 5.65%, 6/11/42 (a)			5,435		5,809,836
Series 2007-T27, Class AM, 5.65%, 6/11/42 (a)			2,080		2,208,864
Series 2012-C4, Class A4, 3.24%, 3/15/45			2,220		2,276,299
Series 2015-MS1, Class A4, 3.78%, 5/15/48 (d)			1,600		1,653,504
ORES NPL LLC, Series 2014-LV3, Class A, 3.00%, 3/27/24 (b)			1,925		1,925,096
UBS-Barclays Commercial Mortgage Trust:
Series 2012-C4, Class A5, 2.85%, 12/10/45			1,675		1,658,618
Series 2013-C6, Class A4, 3.24%, 4/10/46			3,991		4,037,587
VFC LLC, Series 2014-2, Class A, 2.75%, 7/20/30 (b)			3,954		3,954,169
Wachovia Bank Commercial Mortgage Trust:
Series 2005-C20, Class AJ, 5.06%, 7/15/42 (a)			4,110		4,123,423
Series 2005-C20, Class AMFX, 5.16%, 7/15/42 (a)			135		135,372
Non-Agency Mortgage-Backed Securities	Par (000)			Value
Commercial Mortgage-Backed Securities (concluded)
Wachovia Bank Commercial Mortgage Trust (concluded):
Series 2006-C23, Class A4, 5.42%, 1/15/45 (a)		USD	151		151,928
Series 2006-C27, Class A3, 5.77%, 7/15/45 (a)			4,474		4,596,593
Series 2006-C28, Class AM, 5.60%, 10/15/48 (a)			2,430		2,547,255
Series 2007-C34, Class A3, 5.68%, 5/15/46			3,990		4,246,334
Wells Fargo Commercial Mortgage Trust:
Series 2014-LC18, Class A5, 3.41%, 12/15/47			3,400		3,429,288
Series 2014-LC18, Class AS, 3.81%, 12/15/47			1,700		1,731,481
Series 2015-C27, Class A5, 3.45%, 2/15/48			2,700		2,717,577
Series 2015-C28, Class A4, 3.54%, 5/15/48			1,000		1,015,280
Series 2015-C28, Class AS, 3.87%, 5/15/48			625		630,591
WF-RBS Commercial Mortgage Trust:
Series 2012-C08, Class AS, 3.66%, 8/15/45			2,160		2,241,585
Series 2012-C10, Class A3, 2.88%, 12/15/45			4,220		4,229,685
Series 2012-C10, Class AS, 3.24%, 12/15/45			1,520		1,530,982
Series 2013-C18, Class A5, 4.16%, 12/15/46 (a)			1,880		2,035,429
Series 2014-C20, Class B, 4.38%, 5/15/47			1,530		1,582,585
Series 2014-C23, Class A4, 3.65%, 10/15/57			1,050		1,086,300
Series 2014-C24, Class A5, 3.61%, 11/15/47			3,040		3,123,226

					373,108,228
Total Non-Agency Mortgage-Backed Securities — 13.9%					417,350,768



U.S. Government Sponsored Agency Securities
Agency Obligations — 3.2%
Fannie Mae:
0.00%, 10/09/19 - 5/15/30 (c)			35,500		29,001,370
1.63%, 1/21/20			3,000		2,995,842
6.32%, 12/20/27			910		1,196,685
Fannie Mae STRIPS, 0.00%, 3/23/28 - 5/15/29 (c)			6,255		3,905,745
Federal Farm Credit Banks:
1.69%, 4/09/20			8,000		7,942,288
2.00%, 4/04/22			2,977		2,918,800
Federal Home Loan Bank:
4.00%, 9/01/28			1,625		1,747,161
5.38%, 8/15/24			4,500		5,454,855
Federal Home Loan Mortgage Corp.:
0.85%, 5/18/17			3,000		3,001,161
1.02%, 10/16/17			11,205		11,209,078
FICO STRIPS, 0.00%, 12/06/16 (c)			3,000		2,965,881
Financing Corp. Fico, 0.00%, 2/8/18 - 11/2/18 (c)			19,000		18,285,799
Resolution Funding Corp., 8.13%, 10/15/19			3,500		4,429,173
Tennessee Valley Authority:
3.50%, 12/15/42			250		233,500
5.88%, 4/01/36			1,125		1,460,076

					96,747,414

See Notes to Financial Statements.



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	27

Schedule of Investments (continued)

CoreAlpha Bond Master Portfolio

(Percentages shown are based on Net Assets)


U.S. Government Sponsored Agency Securities	Par (000)				Value
Collateralized Mortgage Obligations — 1.0%
Fannie Mae (a):
Series 2013-C01, Class M1, 2.19%, 10/25/23		USD		2,192	$	2,219,934
Series 2014-92, Class FB, 0.50%, 1/25/45				8,917		8,915,708
Fannie Mae REMICS (a):
Series 2007-54, Class PF, 0.41%, 6/25/37				2,342		2,344,189
Series 2010-89, Class CF, 0.64%, 2/25/38				1,481		1,496,655
Series 2010-35, Class EF, 0.74%, 4/25/40				1,523		1,540,830
Freddie Mac REMICS (a):
Series 3667, Class FW, 0.74%, 2/15/38				899		910,324
Series 3807, Class FN, 0.69%, 2/15/41				897		906,129
Ginnie Mae, Series 2014-90, Class FA, 0.59%, 10/20/38 (a)				13,094		13,191,361

						31,525,130
Commercial Mortgage-Backed Securities — 0.8%
Freddie Mac, Class A2:
Series K025, 2.68%, 10/25/22				8,850		8,928,225
Series K031, 3.30%, 4/25/23 (a)				901		940,837
Series K038, 3.39%, 3/25/24				3,500		3,649,971
Series K040, 3.24%, 9/25/24				8,850		9,094,756

						22,613,789
Mortgage-Backed Securities — 44.5%
Fannie Mae Mortgage-Backed Securities:
1.91%, 4/01/43 (a)				604		623,131
1.93%, 5/01/43 (a)				853		880,174
2.07%, 6/01/43 (a)				1,188		1,205,415
2.12%, 1/01/36 (a)				790		839,406
2.22%, 1/01/35 (a)				940		1,003,872
2.34%, 4/01/40 (a)				173		183,891
2.38%, 8/01/33 (a)				1,410		1,502,347
2.43%, 2/01/42 (a)				23		24,411
2.46%, 5/01/33 (a)				1,923		2,047,169
2.50%, 9/01/28 - 4/01/45 (f)				31,794		32,029,263
2.74%, 1/01/42 (a)				645		674,143
2.80%, 8/01/41 (a)				1,391		1,479,287
3.00%, 1/01/27 - 7/01/45 (f)				103,882		104,860,758
3.31%, 9/01/41 (a)				817		861,473
3.50%, 2/01/26 - 7/01/45 (f)				289,810		298,918,919
4.00%, 8/01/25 - 8/01/45 (f)				217,680		230,611,977
4.50%, 10/01/24 - 8/13/45 (f)				108,048		116,796,182
5.00%, 1/01/18 - 8/13/45 (f)				67,003		74,045,174
5.50%, 9/01/19 - 8/01/37				10,578		11,839,485
6.00%, 11/01/22 - 8/01/38				6,271		7,164,404
6.50%, 12/01/30 - 12/01/32				6,957		8,038,230
Freddie Mac Mortgage-Backed Securities:
1.76%, 6/01/43 (a)				348		356,646
2.22%, 10/01/33 (a)				960		1,023,617
2.37%, 2/01/40 (a)				966		1,027,377
2.38%, 4/01/38 (a)				1,149		1,221,432
2.47%, 5/01/43 (a)				904		918,345
2.50%, 7/01/30 - 4/01/43 (f)				18,881		19,050,675
2.51%, 11/01/36 (a)				1,053		1,101,219
2.51%, 8/01/43 (a)				336		341,927
2.60%, 1/01/42 (a)				16		16,880
3.00%, 3/01/27 - 6/01/43 (f)				51,915		52,398,647
3.15%, 8/01/41 (a)				803		856,453
3.35%, 7/01/41 (a)				605		637,758
3.50%, 12/01/25 - 7/01/45 (f)				54,963		56,780,169
4.00%, 3/01/26 - 7/01/45 (f)				45,067		47,648,366
4.50%, 8/01/20 - 7/01/45 (f)				21,445		23,322,621
U.S. Government Sponsored Agency Securities	Par (000)				Value
Mortgage-Backed Securities (concluded)
Freddie Mac Mortgage-Backed Securities (concluded):
5.00%, 10/01/20 - 8/01/40		USD		7,246		7,972,764
5.50%, 5/01/34 - 8/01/38				5,640		6,316,715
6.00%, 9/01/36 - 1/01/38				2,674		3,037,532
6.50%, 5/01/21 - 7/01/32				2,304		2,732,823
Ginnie Mae Mortgage-Backed Securities:
3.00%, 5/15/43 - 7/01/45 (f)				41,550		41,953,161
3.50%, 1/15/41 - 7/01/45 (f)				66,592		69,194,054
4.00%, 9/15/40 - 7/01/45 (f)(g)				43,038		45,818,614
4.50%, 3/15/39 - 7/01/45 (f)				29,714		32,310,709
5.00%, 10/20/39 - 5/20/41				12,522		14,041,605
5.50%, 6/15/34 - 7/20/40				6,877		7,812,074
6.00%, 9/20/38 - 10/20/38				2,184		2,484,143

						1,336,005,437
Total U.S. Government Sponsored Agency Securities — 49.5%						1,486,891,770



U.S. Treasury Obligations
U.S. Treasury Bonds:
6.38%, 8/15/27				12,068		17,005,514
6.13%, 11/15/27				12,000		16,643,436
6.25%, 5/15/30				26,586		38,362,629
4.50%, 8/15/39				19,675		24,626,037
3.88%, 8/15/40				15,149		17,300,628
3.38%, 5/15/44				7,100		7,457,776
U.S. Treasury Inflation Indexed Bonds:
0.13%, 4/15/16				22,106		22,209,922
0.13%, 4/15/20				66,849		67,386,837
0.25%, 1/15/25				47,131		46,229,071
U.S. Treasury Notes:
0.88%, 4/15/17				250		251,328
0.63%, 8/31/17				24,000		23,958,744
1.63%, 4/30/19				13,500		13,650,822
1.50%, 5/31/19				875		879,854
1.50%, 5/31/20				3,775		3,754,354
2.00%, 8/31/21				9,030		9,059,627
U.S. Treasury Principal STRIPS, 0.00%, 5/15/25 (c) 17,320						13,521,014
Total U.S. Treasury Obligations — 10.7%						322,297,593



Investment Companies (h)			Shares
iShares 0-5 Year TIPS Bond ETF				1		100
iShares 1-3 Year Treasury Bond ETF				1		85
iShares 10-20 Year Treasury Bond ETF				1		133
iShares 20+ Year Treasury Bond ETF				181,108		21,272,946
iShares 3-7 Year Treasury Bond ETF				1		123
iShares 7-10 Year Treasury Bond ETF				1		105
iShares Agency Bond ETF				1		113
iShares Core U.S. Treasury Bond ETF				1		25
iShares Short Treasury Bond ETF				1		110
iShares TIPS Bond ETF				1		112
Total Investment Companies — 0.7%						21,273,852



Preferred Securities

Capital Trusts	Par (000)
Capital Markets — 0.0%
The Bank of New York Mellon Corp., Series D, 4.50% (a)(i)		USD		1,264		1,169,200

See Notes to Financial Statements.



28	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015

Schedule of Investments (continued)

CoreAlpha Bond Master Portfolio

(Percentages shown are based on Net Assets)


Preferred Securities	Par (000)				Value
Diversified Financial Services — 0.1%
JPMorgan Chase & Co., Series Q, 5.15% (a)(i)		USD		1,325	$	1,260,870
Insurance — 0.1%
The Chubb Corp.;
6.00%, 5/11/37				800		988,230
6.38%, 3/29/67 (a)				2,550		2,674,950

						3,663,180
Media — 0.1%
NBCUniversal Enterprise, Inc., 5.25% (b)(i)				2,200		2,340,250
Total Capital Trusts — 0.3%						8,433,500



Preferred Stock			Shares
Diversified Telecommunication Services — 0.2%
Qwest Corp., 7.38%				196,000		5,082,280
Total Preferred Securities — 0.5%						13,515,780
Total Long-Term Investments (Cost — $3,806,601,227) — 127.2%						3,820,182,522

BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (h)(j)				36,014,720		36,014,720
Total Short-Term Securities (Cost — $36,014,720) — 1.2%						36,014,720
Total Investments Before TBA Sale Commitments (Cost — $3,842,615,947) — 128.4%						3,856,197,242



TBA Sale Commitments (f)	Par (000)
Fannie Mae Mortgage-Backed Securities:
3.00%, 7/14/45		USD		50,691		(50,485,134	)
3.50%, 7/14/45				77,950		(80,312,859	)
4.00%, 7/16/30 - 7/14/45				95,400		(101,033,469	)
4.50%, 7/14/45				20,600		(22,270,531	)
5.00%, 7/14/45				8,100		(8,947,969	)
Freddie Mac Mortgage-Backed Securities:
3.50%, 7/16/30				1,000		(1,052,500	)
3.00%, 7/14/45				3,000		(2,981,250	)
Total TBA Sale Commitments (Proceeds — $266,228,893) — (8.9)%						(267,083,712	)
Total Investments, Net of TBA Sale Commitments (Cost — $3,576,387,054) — 119.5%						3,589,113,530
Liabilities in Excess of Other Assets — (19.5)%						(586,148,697	)

Net Assets — 100.0%					$	3,002,964,833

Notes to Schedule of Investments

(a)

Variable rate security. Rate shown is as of report date.

(b)

(c)

Zero-coupon bond.

(d)

When-issued security. Unsettled when-issued transactions were as follows:


Counterparty	Value		Unrealized Appreciation
JPMorgan Securities LLC	$	3,074,463	$	25,323
Morgan Stanley & Co. LLC		1,653,504		5,559

(e)

Amount is less than $500.

(f)

Represents or includes a TBA transaction as of June 30, 2015. Unsettled TBA transactions were as follows:


Counterparty	Value			Unrealized Appreciation (Depreciation)
Barclays Capital, Inc.	$	48,465,887		$	(159,960	)
Citigroup Global Markets, Inc.	$	23,780,543		$	43,064
Credit Suisse Securities (USA) LLC	$	246,783,421		$	88,295
Deutsche Bank Securities, Inc.	$	92,301,332		$	(266,454	)
Goldman Sachs & Co.	$	73,317,592		$	(87,962	)
J.P. Morgan Securities LLC	$	70,384,594		$	(47,762	)
Merrill Lynch, Pierce, Fenner & Smith Inc.	$	18,949,900		$	(287,622	)
Morgan Stanley & Co. LLC	$	(14,507,172	)	$	(82,850	)
Nomura Securities International, Inc.	$	55,456,438		$	188,367
RBC Capital Markets, LLC	$	(209,519	)	$	8,056
S.G. America	$	(268,643	)	$	2,274
Wells Fargo Securities, LLC	$	(4,278,438	)	$	(359	)

(g)

All or a portion of security has been pledged as collateral in connection with outstanding TBA commitments.

See Notes to Financial Statements.



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	29


Schedule of Investments (continued)		CoreAlpha Bond Master Portfolio

(h)


Affiliate	Shares Held at December 31, 2014		Shares Purchased		Shares Sold			Shares Held at June 30, 2015		Value at June 30, 2015		Income		Realized Gain (Loss)
BlackRock Cash Funds: Institutional, SL Agency Shares		39,979,776		—		(3,965,056	)¹		36,014,720	$	36,014,720	$	38,518		—
iShares 0-5 Year TIPS Bond ETF		1		—		—			1	$	100		—		—
iShares 1-3 Year Treasury Bond ETF		1		—		—			1	$	85		—		—
iShares 10-20 Year Treasury Bond ETF		1		—		—			1	$	133	$	1
iShares 20+ Year Treasury Bond ETF		181,108		—		—			181,108	$	21,272,946	$	240,265		—
iShares 3-7 Year Treasury Bond ETF		1		—		—			1	$	123	$	1		—
iShares 7-10 Year Treasury Bond ETF		1		—		—			1	$	105	$	1		—
iShares Agency Bond ETF		1		—		—			1	$	113	$	1		—
iShares Core U.S. Treasury Bond ETF		1		—		—			1	$	25		—		—
iShares Short Treasury Bond ETF		1		—		—			1	$	110		—		—
iShares TIPS Bond ETF		1		—		—			1	$	112		—		—
¹ Represents net shares sold.

(i)

Security is perpetual in nature and has no stated maturity date.

(j)

Represents the current yield as of report date.

•

As of June 30, 2015, financial futures contracts outstanding were as follows:


Contracts Long (Short)			Issue	Exchange	Expiration	Notional Value			Unrealized Appreciation (Depreciation)
	194		Euro-Bund Future	Eurex	September 2015		USD	32,874,684	$	(45,742	)
	441		Euro BOBL Futures	Eurex	September 2015		USD	63,707,834		304,463
	1,067		10-Year Australian T-Bond	Sydney Future Exchange	September 2015		USD	103,120,733		1,320,105
	892		10-Year Canada Bond Future	Montreal	September 2015		USD	99,983,987		569,202
	(568	)	10-Year U.S. Treasury Note	Chicago Board of Trade	September 2015		USD	71,665,625		(321,307	)
	(466	)	Long U.S. Treasury Bond	Chicago Board of Trade	September 2015		USD	70,293,188		(542,085	)
	754		Ultra Long U.S. Treasury Bond	Chicago Board of Trade	September 2015		USD	116,163,125		(1,395,960	)
	(519	)	UK Long Gilt Bond	NYSE Liffe	September 2015		USD	94,375,350		839,575
	233		2-Year U.S. Treasury Note	Chicago Board of Trade	September 2015		USD	51,012,437		47,049
	1,088		5-Year U.S. Treasury Note	Chicago Board of Trade	September 2015		USD	129,752,501		913,260
	1,132		90-Day Euro Dollar Future	Eurex	September 2016		USD	279,745,500		92,314
	(1,132	)	90-Day Euro Dollar Future	Eurex	September 2017		USD	277,651,300		44,026
	Total								$	1,824,900

•

As of June 30, 2015, forward foreign currency contracts outstanding were as follows:


Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
BRL	370,000	USD	119,333	Barclays Bank PLC		7/02/15	$	(328	)
BRL	1,930,000	USD	622,059	Barclays Bank PLC		7/02/15		(1,301	)
BRL	175,278	USD	54,795	Barclays Bank PLC		7/02/15		1,581
BRL	1,180,000	USD	380,326	Credit Suisse International		7/02/15		(795	)
BRL	1,260,000	USD	409,224	Deutsche Bank AG		7/02/15		(3,962	)
BRL	1,560,000	USD	504,528	Deutsche Bank AG		7/02/15		(2,775	)
BRL	1,545,000	USD	499,354	Deutsche Bank AG		7/02/15		(2,425	)
BRL	10,240,000	USD	3,300,458	Deutsche Bank AG		7/02/15		(6,900	)
BRL	1,370,000	USD	441,565	Deutsche Bank AG		7/02/15		(923	)
BRL	4,340,000	USD	1,351,141	Deutsche Bank AG		7/02/15		44,761
BRL	2,700,000	USD	870,238	JPMorgan Chase Bank N.A.		7/02/15		(1,819	)
BRL	2,650,000	USD	833,333	JPMorgan Chase Bank N.A.		7/02/15		19,003
BRL	2,830,000	USD	892,744	JPMorgan Chase Bank N.A.		7/02/15		17,487
BRL	704,722	USD	220,119	JPMorgan Chase Bank N.A.		7/02/15		6,545
BRL	1,040,000	USD	335,203	Morgan Stanley & Co. International PLC		7/02/15		(701	)
BRL	325,000	USD	102,475	Morgan Stanley & Co. International PLC		7/02/15		2,057
BRL	2,700,000	USD	867,052	Morgan Stanley & Co. International PLC		7/02/15		1,366
USD	604,754	BRL	1,930,000	Barclays Bank PLC		7/02/15		(16,004	)
USD	56,494	BRL	175,278	Barclays Bank PLC		7/02/15		118
USD	119,255	BRL	370,000	Barclays Bank PLC		7/02/15		249
USD	381,199	BRL	1,180,000	Credit Suisse International		7/02/15		1,667
USD	3,187,946	BRL	10,240,000	Deutsche Bank AG		7/02/15		(105,612	)
USD	431,089	BRL	1,370,000	Deutsche Bank AG		7/02/15		(9,553	)

See Notes to Financial Statements.



30	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015


Schedule of Investments (continued)		CoreAlpha Bond Master Portfolio

As of June 30, 2015, forward foreign currency contracts outstanding were as follows (continued):


Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
USD	502,804	BRL	1,560,000	Deutsche Bank AG		7/02/15	$	1,051
USD	1,398,827	BRL	4,340,000	Deutsche Bank AG		7/02/15		2,924
USD	406,111	BRL	1,260,000	Deutsche Bank AG		7/02/15		849
USD	497,969	BRL	1,545,000	Deutsche Bank AG		7/02/15		1,041
USD	842,960	BRL	2,700,000	JPMorgan Chase Bank N.A.		7/02/15		(25,459	)
USD	227,139	BRL	704,722	JPMorgan Chase Bank N.A.		7/02/15		475
USD	912,138	BRL	2,830,000	JPMorgan Chase Bank N.A.		7/02/15		1,907
USD	854,122	BRL	2,650,000	JPMorgan Chase Bank N.A.		7/02/15		1,786
USD	325,825	BRL	1,040,000	Morgan Stanley & Co. International PLC		7/02/15		(8,677	)
USD	104,751	BRL	325,000	Morgan Stanley & Co. International PLC		7/02/15		219
USD	870,238	BRL	2,700,000	Morgan Stanley & Co. International PLC		7/02/15		1,819
BRL	2,370,000	USD	754,537	Deutsche Bank AG		8/04/15		(352	)
USD	493,800	BRL	1,545,000	Deutsche Bank AG		8/04/15		2,148
USD	384,373	BRL	1,220,000	JPMorgan Chase Bank N.A.		8/04/15		(3,857	)
AUD	460,000	USD	358,156	Barclays Bank PLC		9/10/15		(5,933	)
AUD	3,370,000	USD	2,603,618	Barclays Bank PLC		9/10/15		(23,204	)
AUD	2,349,795	USD	1,817,942	Barclays Bank PLC		9/10/15		(18,701	)
AUD	3,827,058	USD	2,937,420	Barclays Bank PLC		9/10/15		(7,036	)
AUD	6,826,000	USD	5,195,849	Credit Suisse International		9/10/15		30,830
AUD	1,440,000	USD	1,104,666	Credit Suisse International		9/10/15		(2,056	)
AUD	12,990,000	USD	9,965,006	Credit Suisse International		9/10/15		(18,543	)
AUD	2,270,000	USD	1,734,689	Deutsche Bank AG		9/10/15		3,454
AUD	6,420,205	USD	4,966,799	Deutsche Bank AG		9/10/15		(50,838	)
AUD	4,620,000	USD	3,567,481	Goldman Sachs International		9/10/15		(29,940	)
AUD	15,860,000	USD	12,151,202	Goldman Sachs International		9/10/15		(7,176	)
AUD	11,700,000	USD	8,989,110	Goldman Sachs International		9/10/15		(30,402	)
AUD	4,310,000	USD	3,346,323	JPMorgan Chase Bank N.A.		9/10/15		(46,149	)
AUD	580,000	USD	443,658	JPMorgan Chase Bank N.A.		9/10/15		449
AUD	6,327,154	USD	4,839,817	JPMorgan Chase Bank N.A.		9/10/15		4,894
AUD	570,000	USD	436,009	JPMorgan Chase Bank N.A.		9/10/15		441
AUD	5,537,333	USD	4,235,661	JPMorgan Chase Bank N.A.		9/10/15		4,283
AUD	5,850,000	USD	4,542,268	JPMorgan Chase Bank N.A.		9/10/15		(62,914	)
AUD	670,000	USD	516,747	Morgan Stanley & Co. International PLC		9/10/15		(3,727	)
AUD	500,000	USD	385,632	Morgan Stanley & Co. International PLC		9/10/15		(2,781	)
AUD	1,960,000	USD	1,500,960	Morgan Stanley & Co. International PLC		9/10/15		(185	)
AUD	6,320,000	USD	4,839,831	Morgan Stanley & Co. International PLC		9/10/15		(597	)
AUD	1,042,846	USD	797,600	UBS AG		9/10/15		909
AUD	912,667	USD	698,035	UBS AG		9/10/15		795
AUD	3,572,942	USD	2,742,762	UBS AG		9/10/15		(6,955	)
AUD	4,310,000	USD	3,343,957	Westpac Banking Corp.		9/10/15		(43,783	)
AUD	5,120,000	USD	3,955,661	Westpac Banking Corp.		9/10/15		(35,269	)
AUD	5,850,000	USD	4,543,163	Westpac Banking Corp.		9/10/15		(63,809	)
CAD	4,190,000	USD	3,363,314	Barclays Bank PLC		9/10/15		(10,290	)
CAD	5,955,000	USD	4,812,082	Citibank N.A.		9/10/15		(46,626	)
CAD	11,505,000	USD	9,296,895	Citibank N.A.		9/10/15		(90,081	)
CAD	5,955,000	USD	4,785,170	Credit Suisse International		9/10/15		(19,713	)
CAD	11,505,000	USD	9,244,899	Credit Suisse International		9/10/15		(38,086	)
CAD	13,900,702	USD	11,264,002	Credit Suisse International		9/10/15		(140,041	)
CAD	618,892	USD	501,500	Credit Suisse International		9/10/15		(6,235	)
CAD	605,000	USD	491,002	Deutsche Bank AG		9/10/15		(6,855	)
CAD	450,000	USD	365,065	Goldman Sachs International		9/10/15		(4,955	)
CAD	3,510,000	USD	2,847,505	Goldman Sachs International		9/10/15		(38,647	)
CAD	2,030,000	USD	1,646,848	Goldman Sachs International		9/10/15		(22,351	)
CAD	10,768,840	USD	8,739,388	Goldman Sachs International		9/10/15		(121,682	)
CAD	1,230,000	USD	994,695	Goldman Sachs International		9/10/15		(10,394	)
CAD	15,520,000	USD	12,467,416	JPMorgan Chase Bank N.A.		9/10/15		(47,620	)
CAD	1,180,000	USD	955,355	JPMorgan Chase Bank N.A.		9/10/15		(11,066	)
CAD	605,000	USD	490,840	JPMorgan Chase Bank N.A.		9/10/15		(6,692	)
CAD	830,000	USD	671,712	JPMorgan Chase Bank N.A.		9/10/15		(7,509	)
CAD	620,000	USD	503,451	Morgan Stanley & Co. International PLC		9/10/15		(7,299	)
CAD	600,000	USD	481,487	Morgan Stanley & Co. International PLC		9/10/15		(1,340	)
CAD	24,250,000	USD	19,383,175	Royal Bank of Canada		9/10/15		22,755
CAD	8,480,000	USD	6,910,962	UBS AG		9/10/15		(124,888	)
CAD	177,529	USD	144,124	UBS AG		9/10/15		(2,057	)
CAD	443,579	USD	359,776	UBS AG		9/10/15		(4,805	)

See Notes to Financial Statements.



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	31


Schedule of Investments (continued)		CoreAlpha Bond Master Portfolio

As of June 30, 2015, forward foreign currency contracts outstanding were as follows (continued):


Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
CAD	3,987,405	USD	3,237,108	UBS AG		9/10/15	$	(46,209	)
CAD	9,963,053	USD	8,080,793	UBS AG		9/10/15		(107,915	)
CLP	2,789,500,000	USD	4,461,415	BNP Paribas S.A.		9/10/15		(127,819	)
COP	3,170,000,000	USD	1,247,540	Credit Suisse International		9/10/15		(37,474	)
COP	880,000,000	USD	343,348	Credit Suisse International		9/10/15		(7,430	)
COP	2,540,600,000	USD	987,984	Credit Suisse International		9/10/15		(18,175	)
COP	450,000,000	USD	176,401	Morgan Stanley & Co. International PLC		9/10/15		(4,625	)
EUR	175,809	HUF	55,000,000	Barclays Bank PLC		9/10/15		1,929
EUR	556,897	HUF	173,000,000	BNP Paribas S.A.		9/10/15		10,415
EUR	1,417,322	HUF	444,883,184	BNP Paribas S.A.		9/10/15		10,296
EUR	322,251	HUF	101,000,000	BNP Paribas S.A.		9/10/15		2,876
EUR	568,981	HUF	178,000,000	Citibank N.A.		9/10/15		6,242
EUR	185,389	HUF	58,140,563	Credit Suisse International		9/10/15		1,528
EUR	364,998	HUF	114,540,887	Credit Suisse International		9/10/15		2,752
EUR	778,310	HUF	243,000,000	Goldman Sachs International		9/10/15		10,256
EUR	545,274	HUF	170,976,253	Morgan Stanley & Co. International PLC		9/10/15		4,596
EUR	297,650	HUF	93,459,113	Morgan Stanley & Co. International PLC		9/10/15		2,057
EUR	424,188	HUF	133,000,000	Société Générale		9/10/15		3,606
EUR	335,983	PLN	1,395,000	Barclays Bank PLC		9/10/15		4,499
EUR	862,990	PLN	3,610,000	Barclays Bank PLC		9/10/15		4,424
EUR	312,385	PLN	1,295,000	Barclays Bank PLC		9/10/15		4,719
EUR	570,552	PLN	2,362,997	Barclays Bank PLC		9/10/15		9,213
EUR	239,069	PLN	1,000,000	Barclays Bank PLC		9/10/15		1,240
EUR	1,283,165	PLN	5,320,000	BNP Paribas S.A.		9/10/15		19,222
EUR	856,853	PLN	3,550,000	Credit Suisse International		9/10/15		13,502
EUR	1,174,054	PLN	4,930,000	Credit Suisse International		9/10/15		1,034
EUR	1,914,000	PLN	7,991,744	Credit Suisse International		9/10/15		13,730
EUR	276,190	PLN	1,145,000	Goldman Sachs International		9/10/15		4,160
EUR	681,334	PLN	2,822,004	Goldman Sachs International		9/10/15		10,951
EUR	7,475,846	PLN	30,970,000	JPMorgan Chase Bank N.A.		9/10/15		118,584
EUR	298,597	PLN	1,250,000	Morgan Stanley & Co. International PLC		9/10/15		1,283
EUR	1,117,711	PLN	4,668,256	Morgan Stanley & Co. International PLC		9/10/15		7,660
EUR	2,490,000	USD	2,734,481	Bank of America N.A.		9/10/15		42,581
EUR	3,190,000	USD	3,605,258	Barclays Bank PLC		9/10/15		(47,496	)
EUR	10,235,000	USD	11,448,666	Barclays Bank PLC		9/10/15		(33,715	)
EUR	410,000	USD	466,855	Barclays Bank PLC		9/10/15		(9,587	)
EUR	950,000	USD	1,062,157	Barclays Bank PLC		9/10/15		(2,635	)
EUR	13,210,000	USD	15,092,200	Citibank N.A.		9/10/15		(359,274	)
EUR	8,190,000	USD	9,063,832	Credit Suisse International		9/10/15		70,359
EUR	3,190,000	USD	3,601,430	Credit Suisse International		9/10/15		(43,668	)
EUR	630,000	USD	701,428	Credit Suisse International		9/10/15		1,203
EUR	10,235,000	USD	11,442,423	Credit Suisse International		9/10/15		(27,472	)
EUR	9,090,000	USD	10,249,248	Credit Suisse International		9/10/15		(111,299	)
EUR	4,000,000	USD	4,563,800	Goldman Sachs International		9/10/15		(102,657	)
EUR	5,460,000	USD	6,189,412	Goldman Sachs International		9/10/15		(99,951	)
EUR	527,656	USD	593,439	Goldman Sachs International		9/10/15		(4,952	)
EUR	3,312,344	USD	3,725,227	Goldman Sachs International		9/10/15		(31,017	)
EUR	3,280,000	USD	3,701,037	Goldman Sachs International		9/10/15		(42,900	)
EUR	12,280,000	USD	13,790,317	Goldman Sachs International		9/10/15		(94,607	)
EUR	5,675,000	USD	6,403,103	Goldman Sachs International		9/10/15		(73,855	)
EUR	7,095,000	USD	7,978,001	HSBC Bank PLC		9/10/15		(65,048	)
EUR	1,000,000	USD	1,122,520	JPMorgan Chase Bank N.A.		9/10/15		(7,234	)
EUR	1,920,000	USD	2,146,368	JPMorgan Chase Bank N.A.		9/10/15		(5,019	)
EUR	3,312,344	USD	3,724,949	JPMorgan Chase Bank N.A.		9/10/15		(30,739	)
EUR	2,380,000	USD	2,701,129	JPMorgan Chase Bank N.A.		9/10/15		(46,748	)
EUR	9,090,000	USD	10,252,256	JPMorgan Chase Bank N.A.		9/10/15		(114,308	)
EUR	570,000	USD	642,464	JPMorgan Chase Bank N.A.		9/10/15		(6,751	)
EUR	15,970,000	USD	17,964,334	JPMorgan Chase Bank N.A.		9/10/15		(153,218	)
EUR	527,656	USD	593,663	UBS AG		9/10/15		(5,175	)
EUR	880,000	USD	967,098	UBS AG		9/10/15		14,354
GBP	4,680,000	USD	7,364,822	Citibank N.A.		9/10/15		(8,250	)
GBP	5,370,000	USD	8,534,702	Credit Suisse International		9/10/15		(93,507	)
GBP	340,000	USD	522,128	Credit Suisse International		9/10/15		12,324
GBP	4,680,000	USD	7,358,130	Credit Suisse International		9/10/15		(1,558	)

See Notes to Financial Statements.



32	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015


Schedule of Investments (continued)		CoreAlpha Bond Master Portfolio

As of June 30, 2015, forward foreign currency contracts outstanding were as follows (continued):


Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
GBP	3,280,000	USD	5,003,542	Goldman Sachs International		9/10/15	$	152,346
GBP	9,826,000	USD	14,989,268	Goldman Sachs International		9/10/15		456,389
GBP	620,000	USD	982,362	HSBC Bank PLC		9/10/15		(7,774	)
GBP	350,000	USD	552,326	HSBC Bank PLC		9/10/15		(2,155	)
GBP	1,400,000	USD	2,209,535	HSBC Bank PLC		9/10/15		(8,851	)
GBP	2,170,000	USD	3,404,940	HSBC Bank PLC		9/10/15		6,120
GBP	710,000	USD	1,117,407	HSBC Bank PLC		9/10/15		(1,345	)
GBP	12,000,000	USD	18,606,492	HSBC Bank PLC		9/10/15		256,513
GBP	5,760,000	USD	9,045,953	HSBC Bank PLC		9/10/15		8,289
GBP	1,080,000	USD	1,716,341	JPMorgan Chase Bank N.A.		9/10/15		(18,671	)
GBP	3,770,000	USD	5,991,303	JPMorgan Chase Bank N.A.		9/10/15		(65,175	)
GBP	3,370,000	USD	5,254,868	JPMorgan Chase Bank N.A.		9/10/15		42,493
GBP	5,760,000	USD	9,000,000	State Street Bank and Trust Co.		9/10/15		54,242
GBP	890,000	USD	1,355,607	UBS AG		9/10/15		43,399
HUF	224,000,000	EUR	722,697	Barclays Bank PLC		9/10/15		(15,301	)
HUF	93,000,000	EUR	297,263	Barclays Bank PLC		9/10/15		(3,247	)
HUF	45,000,000	EUR	143,697	Barclays Bank PLC		9/10/15		(1,414	)
HUF	367,000,000	EUR	1,180,634	BNP Paribas S.A.		9/10/15		(21,246	)
HUF	68,003,093	EUR	217,543	Credit Suisse International		9/10/15		(2,574	)
HUF	80,747,387	EUR	257,135	Credit Suisse International		9/10/15		(1,743	)
HUF	11,330,423	EUR	36,313	Goldman Sachs International		9/10/15		(504	)
HUF	56,666,485	EUR	181,577	UBS AG		9/10/15		(2,480	)
HUF	57,252,613	EUR	182,691	UBS AG		9/10/15		(1,653	)
HUF	102,000,000	USD	368,808	Barclays Bank PLC		9/10/15		(8,751	)
HUF	98,000,000	USD	354,168	BNP Paribas S.A.		9/10/15		(8,231	)
HUF	179,000,000	USD	633,348	BNP Paribas S.A.		9/10/15		(1,484	)
HUF	140,000,000	USD	502,693	BNP Paribas S.A.		9/10/15		(8,498	)
HUF	92,000,000	USD	331,766	BNP Paribas S.A.		9/10/15		(7,010	)
HUF	91,000,000	USD	328,209	BNP Paribas S.A.		9/10/15		(6,982	)
IDR	4,520,000,000	USD	333,634	Morgan Stanley & Co. International PLC		9/10/15		365
IDR	17,164,900,000	USD	1,269,969	Morgan Stanley & Co. International PLC		9/10/15		(1,595	)
IDR	4,530,000,000	USD	331,625	Morgan Stanley & Co. International PLC		9/10/15		3,112
ILS	4,735,884	USD	1,235,692	Credit Suisse International		9/10/15		20,030
ILS	1,842,983	USD	487,597	Credit Suisse International		9/10/15		1,071
ILS	6,340,000	USD	1,641,098	Credit Suisse International		9/10/15		39,956
ILS	4,621,340	USD	1,198,579	Credit Suisse International		9/10/15		26,771
ILS	14,573,097	USD	3,777,371	Deutsche Bank AG		9/10/15		86,693
ILS	78,660	USD	20,436	Goldman Sachs International		9/10/15		421
ILS	570,000	USD	148,441	Goldman Sachs International		9/10/15		2,694
ILS	7,017	USD	1,857	Morgan Stanley & Co. International PLC		9/10/15		3
ILS	64,116	USD	16,732	UBS AG		9/10/15		268
INR	22,505,975	USD	349,781	Barclays Bank PLC		9/10/15		(1,152	)
INR	60,350,000	USD	938,934	Citibank N.A.		9/10/15		(4,081	)
INR	10,850,000	USD	168,806	Citibank N.A.		9/10/15		(734	)
INR	64,400,000	USD	990,312	Credit Suisse International		9/10/15		7,277
INR	78,020,000	USD	1,213,375	Deutsche Bank AG		9/10/15		(4,804	)
INR	90,900,000	USD	1,396,635	Deutsche Bank AG		9/10/15		11,453
INR	2,250,772	USD	34,978	Goldman Sachs International		9/10/15		(112	)
INR	89,800,000	USD	1,389,878	HSBC Bank PLC		9/10/15		1,171
INR	77,790,000	USD	1,209,986	HSBC Bank PLC		9/10/15		(4,978	)
INR	31,300,000	USD	486,327	HSBC Bank PLC		9/10/15		(1,474	)
INR	64,183,363	USD	996,946	HSBC Bank PLC		9/10/15		(2,712	)
INR	111,300,000	USD	1,717,858	HSBC Bank PLC		9/10/15		6,237
INR	12,000,000	USD	185,214	HSBC Bank PLC		9/10/15		672
INR	52,400,000	USD	808,143	HSBC Bank PLC		9/10/15		3,560
INR	139,100,000	USD	2,136,385	HSBC Bank PLC		9/10/15		18,347
INR	12,300,000	USD	188,462	HSBC Bank PLC		9/10/15		2,071
INR	33,764,191	USD	524,941	JPMorgan Chase Bank N.A.		9/10/15		(1,916	)
INR	31,507,315	USD	489,694	JPMorgan Chase Bank N.A.		9/10/15		(1,629	)
INR	15,750,544	USD	244,847	Morgan Stanley & Co. International PLC		9/10/15		(863	)
INR	76,150,000	USD	1,183,188	Morgan Stanley & Co. International PLC		9/10/15		(3,585	)
INR	60,350,000	USD	939,446	Morgan Stanley & Co. International PLC		9/10/15		(4,593	)
INR	10,850,000	USD	168,898	Morgan Stanley & Co. International PLC		9/10/15		(826	)
INR	222,700,000	USD	3,420,366	Morgan Stanley & Co. International PLC		9/10/15		29,374

See Notes to Financial Statements.



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	33


Schedule of Investments (continued)		CoreAlpha Bond Master Portfolio

As of June 30, 2015, forward foreign currency contracts outstanding were as follows (continued):


Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
INR	77,790,000	USD	1,209,610	UBS AG		9/10/15	$	(4,602	)
INR	79,700,000	USD	1,239,117	UBS AG		9/10/15		(4,522	)
INR	58,487,839	USD	908,478	UBS AG		9/10/15		(2,471	)
INR	112,500,000	USD	1,738,929	UBS AG		9/10/15		3,755
INR	83,100,000	USD	1,284,489	UBS AG		9/10/15		2,774
JPY	50,000,000	USD	403,943	BNP Paribas S.A.		9/10/15		5,022
JPY	802,000,000	USD	6,448,708	Citibank N.A.		9/10/15		111,089
JPY	1,587,000,000	USD	12,821,217	Deutsche Bank AG		9/10/15		159,329
JPY	4,299,600,000	USD	34,736,046	Deutsche Bank AG		9/10/15		431,663
JPY	654,000,000	USD	5,283,602	Deutsche Bank AG		9/10/15		65,659
JPY	802,000,000	USD	6,439,362	Deutsche Bank AG		9/10/15		120,435
JPY	255,000,000	USD	2,033,039	Deutsche Bank AG		9/10/15		52,682
JPY	209,000,000	USD	1,693,734	Goldman Sachs International		9/10/15		15,739
JPY	10,000,000	USD	81,887	Goldman Sachs International		9/10/15		(94	)
JPY	67,000,000	USD	548,645	Goldman Sachs International		9/10/15		(632	)
JPY	384,000,000	USD	3,099,503	Goldman Sachs International		9/10/15		41,347
JPY	70,000,000	USD	565,014	Goldman Sachs International		9/10/15		7,537
JPY	578,000,000	USD	4,637,523	Goldman Sachs International		9/10/15		90,111
JPY	197,000,000	USD	1,607,229	HSBC Bank PLC		9/10/15		4,093
JPY	97,000,000	USD	783,090	JPMorgan Chase Bank N.A.		9/10/15		10,302
JPY	43,000,000	USD	346,513	UBS AG		9/10/15		5,197
JPY	50,000,000	USD	404,344	Westpac Banking Corp.		9/10/15		4,621
KRW	240,000,000	USD	215,522	Barclays Bank PLC		9/10/15		(707	)
KRW	1,010,000,000	USD	901,979	Barclays Bank PLC		9/10/15		2,037
KRW	745,000,000	USD	673,294	Credit Suisse International		9/10/15		(6,470	)
KRW	2,860,000,000	USD	2,556,996	Deutsche Bank AG		9/10/15		2,891
KRW	1,205,000,000	USD	1,089,019	Goldman Sachs International		9/10/15		(10,466	)
KRW	375,000,000	USD	338,906	Goldman Sachs International		9/10/15		(3,257	)
KRW	1,259,300,000	USD	1,126,790	HSBC Bank PLC		9/10/15		366
KRW	1,080,000,000	USD	968,046	HSBC Bank PLC		9/10/15		(1,375	)
KRW	390,000,000	USD	351,795	JPMorgan Chase Bank N.A.		9/10/15		(2,720	)
KRW	585,000,000	USD	530,035	JPMorgan Chase Bank N.A.		9/10/15		(6,422	)
KRW	700,000,000	USD	624,610	JPMorgan Chase Bank N.A.		9/10/15		1,936
KRW	475,000,000	USD	427,658	JPMorgan Chase Bank N.A.		9/10/15		(2,502	)
KRW	2,852,500,000	USD	2,580,514	Morgan Stanley & Co. International PLC		9/10/15		(27,339	)
KRW	1,480,000,000	USD	1,332,853	Morgan Stanley & Co. International PLC		9/10/15		(8,156	)
KRW	2,770,000,000	USD	2,462,441	Morgan Stanley & Co. International PLC		9/10/15		16,890
KRW	3,065,000,000	USD	2,755,056	Morgan Stanley & Co. International PLC		9/10/15		(11,680	)
KRW	385,000,000	USD	345,214	Morgan Stanley & Co. International PLC		9/10/15		(614	)
KRW	480,000,000	USD	431,034	Morgan Stanley & Co. International PLC		9/10/15		(1,403	)
KRW	530,000,000	USD	472,750	Morgan Stanley & Co. International PLC		9/10/15		1,635
KRW	2,852,500,000	USD	2,573,994	Standard Chartered Bank		9/10/15		(20,820	)
KRW	3,065,000,000	USD	2,757,535	Standard Chartered Bank		9/10/15		(14,159	)
KRW	2,940,000,000	USD	2,635,117	Standard Chartered Bank		9/10/15		(3,624	)
MXN	2,700,000	USD	170,655	Credit Suisse International		9/10/15		573
MXN	44,400,000	USD	2,887,317	Deutsche Bank AG		9/10/15		(71,560	)
MXN	4,200,000	USD	269,837	Deutsche Bank AG		9/10/15		(3,481	)
MXN	6,800,000	USD	431,897	Deutsche Bank AG		9/10/15		(655	)
MXN	8,400,000	USD	537,359	Deutsche Bank AG		9/10/15		(4,648	)
MXN	22,300,000	USD	1,414,257	Deutsche Bank AG		9/10/15		(36	)
MXN	3,600,000	USD	233,198	Goldman Sachs International		9/10/15		(4,894	)
MXN	5,800,000	USD	372,875	Goldman Sachs International		9/10/15		(5,051	)
MXN	37,996,305	USD	2,452,792	Goldman Sachs International		9/10/15		(43,145	)
MXN	15,000,000	USD	967,655	JPMorgan Chase Bank N.A.		9/10/15		(16,385	)
MXN	2,103,695	USD	135,740	JPMorgan Chase Bank N.A.		9/10/15		(2,328	)
MXN	3,800,000	USD	245,093	JPMorgan Chase Bank N.A.		9/10/15		(4,105	)
MXN	23,400,000	USD	1,507,324	Morgan Stanley & Co. International PLC		9/10/15		(23,344	)
MXN	40,300,000	USD	2,600,235	Morgan Stanley & Co. International PLC		9/10/15		(44,492	)
MXN	21,660,000	USD	1,384,061	Morgan Stanley & Co. International PLC		9/10/15		(10,428	)
MXN	8,400,000	USD	538,363	Morgan Stanley & Co. International PLC		9/10/15		(5,652	)
MYR	3,000,000	USD	791,787	Barclays Bank PLC		9/10/15		(862	)
MYR	3,725,000	USD	1,003,448	Barclays Bank PLC		9/10/15		(21,384	)
MYR	970,000	USD	261,069	Deutsche Bank AG		9/10/15		(5,336	)
MYR	2,200,000	USD	592,114	Deutsche Bank AG		9/10/15		(12,103	)

See Notes to Financial Statements.



34	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015


Schedule of Investments (continued)		CoreAlpha Bond Master Portfolio

As of June 30, 2015, forward foreign currency contracts outstanding were as follows (continued):


Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
MYR	216,276	USD	58,067	Deutsche Bank AG		9/10/15	$	(1,048	)
MYR	2,240,000	USD	603,140	Goldman Sachs International		9/10/15		(12,583	)
MYR	9,450,000	USD	2,535,551	HSBC Bank PLC		9/10/15		(44,140	)
MYR	11,470,000	USD	3,013,267	HSBC Bank PLC		9/10/15		10,701
MYR	3,290,000	USD	872,911	JPMorgan Chase Bank N.A.		9/10/15		(5,530	)
MYR	3,725,000	USD	1,004,314	JPMorgan Chase Bank N.A.		9/10/15		(22,249	)
MYR	192,440	USD	51,685	JPMorgan Chase Bank N.A.		9/10/15		(950	)
MYR	700,000	USD	184,711	Morgan Stanley & Co. International PLC		9/10/15		(162	)
MYR	4,450,000	USD	1,171,824	Morgan Stanley & Co. International PLC		9/10/15		1,381
MYR	1,690,000	USD	452,901	Morgan Stanley & Co. International PLC		9/10/15		(7,347	)
MYR	1,510,000	USD	400,212	Morgan Stanley & Co. International PLC		9/10/15		(2,113	)
MYR	625,000	USD	164,929	Morgan Stanley & Co. International PLC		9/10/15		(153	)
MYR	1,081,284	USD	290,335	Morgan Stanley & Co. International PLC		9/10/15		(5,264	)
MYR	9,450,000	USD	2,534,871	UBS AG		9/10/15		(43,459	)
MYR	2,590,000	USD	696,649	UBS AG		9/10/15		(13,817	)
MYR	5,880,000	USD	1,581,581	UBS AG		9/10/15		(31,369	)
MYR	1,335,000	USD	352,011	UBS AG		9/10/15		(49	)
MYR	1,335,000	USD	352,941	UBS AG		9/10/15		(980	)
MYR	9,640,000	USD	2,558,047	UBS AG		9/10/15		(16,543	)
MYR	1,510,000	USD	400,000	UBS AG		9/10/15		(1,901	)
MYR	9,580,000	USD	2,534,392	UBS AG		9/10/15		(8,706	)
MYR	625,000	USD	165,344	UBS AG		9/10/15		(568	)
NOK	5,458,003	USD	695,276	Barclays Bank PLC		9/10/15		(2,653	)
NOK	9,500,000	USD	1,206,956	Deutsche Bank AG		9/10/15		(1,403	)
NOK	25,800,000	USD	3,308,840	Goldman Sachs International		9/10/15		(34,812	)
NOK	30,200,000	USD	3,877,034	JPMorgan Chase Bank N.A.		9/10/15		(44,644	)
NOK	132,512,000	USD	16,714,219	JPMorgan Chase Bank N.A.		9/10/15		101,596
NOK	197,383,965	USD	24,896,755	JPMorgan Chase Bank N.A.		9/10/15		151,333
NOK	12,741,997	USD	1,621,018	UBS AG		9/10/15		(4,055	)
NZD	3,480,000	USD	2,466,394	Credit Suisse International		9/10/15		(126,854	)
NZD	8,050,000	USD	5,556,682	Credit Suisse International		9/10/15		(144,813	)
NZD	24,015,586	USD	16,986,224	Goldman Sachs International		9/10/15		(840,983	)
NZD	2,154,150	USD	1,537,494	Goldman Sachs International		9/10/15		(89,299	)
NZD	2,153,817	USD	1,541,448	Goldman Sachs International		9/10/15		(93,476	)
NZD	1,364,403	USD	946,227	Goldman Sachs International		9/10/15		(28,964	)
NZD	1,830,000	USD	1,291,887	HSBC Bank PLC		9/10/15		(61,611	)
NZD	530,000	USD	365,280	Morgan Stanley & Co. International PLC		9/10/15		(8,971	)
NZD	4,195,850	USD	2,991,503	UBS AG		9/10/15		(170,709	)
NZD	4,196,183	USD	3,005,264	UBS AG		9/10/15		(184,247	)
NZD	3,010,000	USD	2,131,200	UBS AG		9/10/15		(107,632	)
NZD	1,705,504	USD	1,182,127	UBS AG		9/10/15		(35,548	)
NZD	3,280,000	USD	2,266,578	Westpac Banking Corp.		9/10/15		(61,494	)
NZD	1,560,000	USD	1,075,378	Westpac Banking Corp.		9/10/15		(26,619	)
NZD	3,480,000	USD	2,461,195	Westpac Banking Corp.		9/10/15		(121,655	)
NZD	2,870,000	USD	1,986,471	Westpac Banking Corp.		9/10/15		(57,022	)
NZD	3,220,000	USD	2,228,723	Westpac Banking Corp.		9/10/15		(63,976	)
NZD	3,400,093	USD	2,354,292	Westpac Banking Corp.		9/10/15		(68,472	)
PHP	14,300,000	USD	315,882	Deutsche Bank AG		9/10/15		52
PHP	7,600,000	USD	168,627	Goldman Sachs International		9/10/15		(717	)
PHP	29,600,000	USD	653,855	Goldman Sachs International		9/10/15		108
PHP	39,300,000	USD	867,358	JPMorgan Chase Bank N.A.		9/10/15		910
PHP	21,000,000	USD	464,396	Morgan Stanley & Co. International PLC		9/10/15		(436	)
PHP	132,300,000	USD	2,920,530	Standard Chartered Bank		9/10/15		2,420
PHP	37,700,000	USD	833,333	UBS AG		9/10/15		(414	)
PHP	22,000,000	USD	481,875	UBS AG		9/10/15		4,179
PLN	153,422	EUR	36,727	Barclays Bank PLC		9/10/15		(244	)
PLN	8,574,668	EUR	2,053,591	Barclays Bank PLC		9/10/15		(14,712	)
PLN	2,000,000	EUR	478,711	BNP Paribas S.A.		9/10/15		(3,120	)
PLN	3,535,327	EUR	844,896	Credit Suisse International		9/10/15		(4,061	)
PLN	3,230,178	EUR	777,949	Credit Suisse International		9/10/15		(10,379	)
PLN	9,315,275	EUR	2,243,470	Credit Suisse International		9/10/15		(29,932	)
PLN	3,792,799	EUR	909,099	Credit Suisse International		9/10/15		(7,335	)
PLN	45,578	EUR	10,916	Goldman Sachs International		9/10/15		(79	)
PLN	4,930,000	EUR	1,190,052	JPMorgan Chase Bank N.A.		9/10/15		(18,877	)

See Notes to Financial Statements.



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	35


Schedule of Investments (continued)		CoreAlpha Bond Master Portfolio

As of June 30, 2015, forward foreign currency contracts outstanding were as follows (continued):


Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
PLN	767,027	EUR	183,641	JPMorgan Chase Bank N.A.		9/10/15	$	(1,251	)
PLN	1,535,226	EUR	367,261	Morgan Stanley & Co. International PLC		9/10/15		(2,168	)
PLN	2,270,000	EUR	546,251	Morgan Stanley & Co. International PLC		9/10/15		(6,791	)
PLN	773,551	EUR	186,317	Morgan Stanley & Co. International PLC		9/10/15		(2,504	)
PLN	2,230,787	EUR	537,306	Morgan Stanley & Co. International PLC		9/10/15		(7,222	)
PLN	7,582,533	EUR	1,818,113	Morgan Stanley & Co. International PLC		9/10/15		(15,390	)
PLN	2,270,000	EUR	545,732	Société Générale		9/10/15		(6,213	)
PLN	153,419	EUR	36,725	UBS AG		9/10/15		(243	)
PLN	1,113,938	EUR	268,653	UBS AG		9/10/15		(3,997	)
PLN	386,271	EUR	93,159	UBS AG		9/10/15		(1,386	)
PLN	150,000	USD	40,269	Barclays Bank PLC		9/10/15		(460	)
PLN	50,000	USD	13,375	BNP Paribas S.A.		9/10/15		(105	)
PLN	170,000	USD	45,591	Credit Suisse International		9/10/15		(475	)
PLN	10,210,000	USD	2,705,496	Deutsche Bank AG		9/10/15		4,134
PLN	1,250,000	USD	341,784	JPMorgan Chase Bank N.A.		9/10/15		(10,047	)
PLN	1,250,000	USD	338,900	UBS AG		9/10/15		(7,163	)
SEK	62,000,000	USD	7,384,117	BNP Paribas S.A.		9/10/15		98,830
SEK	124,600,000	USD	15,040,756	Credit Suisse International		9/10/15		(2,447	)
SEK	14,200,000	USD	1,686,530	Credit Suisse International		9/10/15		27,306
SEK	74,400,000	USD	9,095,628	Credit Suisse International		9/10/15		(116,092	)
SEK	58,500,000	USD	7,043,906	Goldman Sachs International		9/10/15		16,616
SEK	54,300,000	USD	6,688,459	JPMorgan Chase Bank N.A.		9/10/15		(134,846	)
SEK	4,500,000	USD	546,241	JPMorgan Chase Bank N.A.		9/10/15		(3,124	)
SEK	28,400,000	USD	3,483,263	JPMorgan Chase Bank N.A.		9/10/15		(55,590	)
SEK	9,200,000	USD	1,143,357	UBS AG		9/10/15		(32,984	)
SEK	11,300,000	USD	1,404,340	UBS AG		9/10/15		(40,513	)
SEK	173,131,000	USD	20,347,288	UBS AG		9/10/15		548,358
SGD	900,000	USD	671,592	Credit Suisse International		9/10/15		(3,870	)
SGD	870,000	USD	642,198	Credit Suisse International		9/10/15		3,266
SGD	1,180,000	USD	874,377	Credit Suisse International		9/10/15		1,081
SGD	630,000	USD	463,521	Deutsche Bank AG		9/10/15		3,884
SGD	1,150,000	USD	855,728	Goldman Sachs International		9/10/15		(2,528	)
SGD	740,000	USD	550,293	Goldman Sachs International		9/10/15		(1,278	)
SGD	520,000	USD	385,288	Goldman Sachs International		9/10/15		507
SGD	1,310,000	USD	970,628	Goldman Sachs International		9/10/15		1,277
SGD	840,000	USD	622,303	Goldman Sachs International		9/10/15		904
SGD	10,470,000	USD	7,735,958	HSBC Bank PLC		9/10/15		31,869
SGD	1,530,000	USD	1,133,078	HSBC Bank PLC		9/10/15		2,048
SGD	840,000	USD	623,327	HSBC Bank PLC		9/10/15		(120	)
SGD	670,000	USD	497,682	Morgan Stanley & Co. International PLC		9/10/15		(601	)
SGD	270,000	USD	200,300	UBS AG		9/10/15		17
SGD	1,320,000	USD	979,242	UBS AG		9/10/15		83
THB	12,600,000	USD	373,195	Barclays Bank PLC		9/10/15		(997	)
THB	3,043,853	USD	89,720	Barclays Bank PLC		9/10/15		194
THB	1,609,879	USD	47,468	Deutsche Bank AG		9/10/15		87
THB	376,197	USD	11,126	Deutsche Bank AG		9/10/15		(13	)
THB	8,220,278	USD	242,386	Deutsche Bank AG		9/10/15		437
THB	62,300,000	USD	1,830,872	Goldman Sachs International		9/10/15		9,439
THB	62,300,000	USD	1,829,931	HSBC Bank PLC		9/10/15		10,380
THB	16,098,793	USD	474,615	Morgan Stanley & Co. International PLC		9/10/15		935
THB	15,400,000	USD	454,371	Morgan Stanley & Co. International PLC		9/10/15		537
THB	15,823,803	USD	468,021	Morgan Stanley & Co. International PLC		9/10/15		(594	)
THB	21,079,722	USD	621,515	Morgan Stanley & Co. International PLC		9/10/15		1,170
THB	11,200,000	USD	330,023	Morgan Stanley & Co. International PLC		9/10/15		819
THB	24,147,474	USD	711,656	UBS AG		9/10/15		1,649
TRY	3,467,686	USD	1,247,945	Credit Suisse International		9/10/15		20,663
TRY	1,390,000	USD	507,603	Deutsche Bank AG		9/10/15		910
TRY	1,212,314	USD	436,368	Goldman Sachs International		9/10/15		7,141
TRY	1,730,000	USD	629,847	Morgan Stanley & Co. International PLC		9/10/15		3,051
TWD	47,625,000	USD	1,540,764	JPMorgan Chase Bank N.A.		9/10/15		3,454
TWD	95,250,000	USD	3,078,539	Morgan Stanley & Co. International PLC		9/10/15		9,896
TWD	93,800,000	USD	3,015,612	Morgan Stanley & Co. International PLC		9/10/15		25,807
TWD	16,200,000	USD	525,377	Morgan Stanley & Co. International PLC		9/10/15		(100	)
TWD	22,600,000	USD	736,938	UBS AG		9/10/15		(4,144	)

See Notes to Financial Statements.



36	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015


Schedule of Investments (continued)		CoreAlpha Bond Master Portfolio

As of June 30, 2015, forward foreign currency contracts outstanding were as follows (continued):


Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
TWD	47,625,000	USD	1,540,514	UBS AG		9/10/15	$	3,703
USD	8,407,926	AUD	10,961,522	Barclays Bank PLC		9/10/15		14,672
USD	1,139,901	AUD	1,486,103	Barclays Bank PLC		9/10/15		1,989
USD	385,689	AUD	502,828	Barclays Bank PLC		9/10/15		673
USD	1,569,029	AUD	2,037,092	Barclays Bank PLC		9/10/15		9,225
USD	365,942	AUD	470,000	Barclays Bank PLC		9/10/15		6,062
USD	169,118	AUD	220,000	Barclays Bank PLC		9/10/15		664
USD	1,112,836	AUD	1,450,000	BNP Paribas S.A.		9/10/15		2,569
USD	25,287,328	AUD	33,221,001	Credit Suisse International		9/10/15		(150,044	)
USD	805,008	AUD	1,048,305	Credit Suisse International		9/10/15		2,319
USD	5,937,750	AUD	7,732,311	Credit Suisse International		9/10/15		17,107
USD	810,636	AUD	1,039,212	Credit Suisse International		9/10/15		14,909
USD	8,438,543	AUD	11,130,000	Deutsche Bank AG		9/10/15		(83,715	)
USD	3,408,243	AUD	4,460,000	Deutsche Bank AG		9/10/15		(6,786	)
USD	2,497	AUD	3,242	Goldman Sachs International		9/10/15		15
USD	16,287	AUD	21,142	Goldman Sachs International		9/10/15		99
USD	2,151,240	AUD	2,800,000	Goldman Sachs International		9/10/15		7,276
USD	2,205,021	AUD	2,870,000	Goldman Sachs International		9/10/15		7,458
USD	653,055	AUD	850,000	Goldman Sachs International		9/10/15		2,209
USD	518,475	AUD	670,000	Goldman Sachs International		9/10/15		5,455
USD	7,421,154	AUD	9,590,000	Goldman Sachs International		9/10/15		78,077
USD	1,649,065	AUD	2,170,000	HSBC Bank PLC		9/10/15		(12,507	)
USD	492,749	AUD	640,000	HSBC Bank PLC		9/10/15		2,700
USD	513,107	AUD	670,437	JPMorgan Chase Bank N.A.		9/10/15		(248	)
USD	11,185,605	AUD	14,615,363	JPMorgan Chase Bank N.A.		9/10/15		(5,401	)
USD	1,516,483	AUD	1,981,471	JPMorgan Chase Bank N.A.		9/10/15		(732	)
USD	3,120,852	AUD	4,053,813	JPMorgan Chase Bank N.A.		9/10/15		16,841
USD	340,575	AUD	440,000	UBS AG		9/10/15		3,667
USD	3,551,154	AUD	4,600,000	UBS AG		9/10/15		28,927
USD	104,848	AUD	136,736	UBS AG		9/10/15		150
USD	2,285,665	AUD	2,980,803	UBS AG		9/10/15		3,259
USD	309,878	AUD	404,121	UBS AG		9/10/15		442
USD	3,140,454	AUD	4,074,184	UBS AG		9/10/15		20,845
USD	1,137,905	AUD	1,478,858	Westpac Banking Corp.		9/10/15		5,540
USD	174,479	AUD	226,758	Westpac Banking Corp.		9/10/15		850
USD	2,743,245	AUD	3,564,911	Westpac Banking Corp.		9/10/15		13,588
USD	3,853,859	AUD	4,940,788	Westpac Banking Corp.		9/10/15		70,690
USD	2,219,650	CAD	2,775,000	Bank of America N.A.		9/10/15		(1,028	)
USD	1,623,744	CAD	2,030,000	Bank of America N.A.		9/10/15		(752	)
USD	699,126	CAD	860,000	Barclays Bank PLC		9/10/15		10,915
USD	2,218,094	CAD	2,775,000	Credit Suisse International		9/10/15		(2,584	)
USD	1,622,606	CAD	2,030,000	Credit Suisse International		9/10/15		(1,891	)
USD	15,584,536	CAD	19,540,000	Credit Suisse International		9/10/15		(52,243	)
USD	13,731,643	CAD	16,980,000	Goldman Sachs International		9/10/15		143,490
USD	13,359,853	CAD	16,490,000	Goldman Sachs International		9/10/15		163,820
USD	6,831,453	CAD	8,330,000	Goldman Sachs International		9/10/15		165,415
USD	443,654	CAD	550,000	Goldman Sachs International		9/10/15		3,519
USD	26,832,709	CAD	33,570,000	Royal Bank of Canada		9/10/15		(31,500	)
USD	3,320,797	CAD	4,150,000	Westpac Banking Corp.		9/10/15		(218	)
USD	488,510	CLP	312,500,000	Credit Suisse International		9/10/15		3,029
USD	1,941,083	CLP	1,219,000,000	Deutsche Bank AG		9/10/15		47,319
USD	475,374	CLP	302,100,000	Morgan Stanley & Co. International PLC		9/10/15		6,050
USD	1,488,245	CLP	955,900,000	Standard Chartered Bank		9/10/15		3,218
USD	2,747,551	COP	7,040,600,000	Citibank N.A.		9/10/15		59,983
USD	10,751,231	EUR	9,790,000	Bank of America N.A.		9/10/15		(167,418	)
USD	5,129,968	EUR	4,560,000	Barclays Bank PLC		9/10/15		44,264
USD	970,716	EUR	860,000	Barclays Bank PLC		9/10/15		11,571
USD	5,417,229	EUR	4,805,000	Barclays Bank PLC		9/10/15		58,280
USD	3,753,119	EUR	3,365,000	BNP Paribas S.A.		9/10/15		182
USD	7,329,121	EUR	6,500,000	Citibank N.A.		9/10/15		79,762
USD	9,071,153	EUR	8,300,000	Credit Suisse International		9/10/15		(185,720	)
USD	3,751,383	EUR	3,365,000	Credit Suisse International		9/10/15		(1,554	)
USD	3,393,865	EUR	3,010,000	Credit Suisse International		9/10/15		36,855
USD	7,322,343	EUR	6,490,000	Credit Suisse International		9/10/15		84,137
USD	7,843,023	EUR	6,910,000	Deutsche Bank AG		9/10/15		136,397

See Notes to Financial Statements.



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	37


Schedule of Investments (continued)		CoreAlpha Bond Master Portfolio

As of June 30, 2015, forward foreign currency contracts outstanding were as follows (continued):


Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
USD	5,131,824	EUR	4,560,000	Goldman Sachs International		9/10/15	$	46,120
USD	1,756,092	EUR	1,570,000	Goldman Sachs International		9/10/15		5,093
USD	2,131,153	EUR	1,880,000	Goldman Sachs International		9/10/15		34,416
USD	5,468,521	EUR	4,850,000	Goldman Sachs International		9/10/15		59,384
USD	3,320,815	EUR	2,950,000	Goldman Sachs International		9/10/15		30,722
USD	21,924,623	EUR	19,960,000	HSBC Bank PLC		9/10/15		(336,483	)
USD	17,010,144	EUR	15,485,898	HSBC Bank PLC		9/10/15		(261,059	)
USD	2,614,259	EUR	2,380,000	HSBC Bank PLC		9/10/15		(40,122	)
USD	3,778,592	EUR	3,440,000	HSBC Bank PLC		9/10/15		(57,991	)
USD	4,212,678	EUR	3,760,000	HSBC Bank PLC		9/10/15		19,203
USD	17,756,454	EUR	15,930,000	JPMorgan Chase Bank N.A.		9/10/15		(10,050	)
USD	17,742,117	EUR	15,930,000	JPMorgan Chase Bank N.A.		9/10/15		(24,387	)
USD	14,929,182	EUR	13,230,000	JPMorgan Chase Bank N.A.		9/10/15		173,950
USD	5,534,704	EUR	4,905,000	JPMorgan Chase Bank N.A.		9/10/15		64,227
USD	3,765,546	EUR	3,340,000	JPMorgan Chase Bank N.A.		9/10/15		40,491
USD	10,763,723	EUR	9,790,000	UBS AG		9/10/15		(154,926	)
USD	646,682	GBP	420,000	Barclays Bank PLC		9/10/15		(13,523	)
USD	1,493,255	GBP	980,000	Barclays Bank PLC		9/10/15		(47,223	)
USD	6,714,591	GBP	4,347,691	Barclays Bank PLC		9/10/15		(119,618	)
USD	35,883,631	GBP	23,523,000	Goldman Sachs International		9/10/15		(1,092,575	)
USD	518,660	GBP	340,000	Goldman Sachs International		9/10/15		(15,792	)
USD	11,248,793	GBP	7,350,000	Goldman Sachs International		9/10/15		(304,798	)
USD	963,555	GBP	624,618	Goldman Sachs International		9/10/15		(18,293	)
USD	900,814	GBP	590,000	HSBC Bank PLC		9/10/15		(26,617	)
USD	3,175,750	GBP	2,080,000	HSBC Bank PLC		9/10/15		(93,837	)
USD	18,994,127	GBP	12,250,000	HSBC Bank PLC		9/10/15		(261,857	)
USD	1,224,973	GBP	780,000	HSBC Bank PLC		9/10/15		(1,122	)
USD	1,742,901	GBP	1,100,000	HSBC Bank PLC		9/10/15		13,792
USD	2,832,179	GBP	1,860,000	JPMorgan Chase Bank N.A.		9/10/15		(91,587	)
USD	1,324,729	GBP	870,000	JPMorgan Chase Bank N.A.		9/10/15		(42,839	)
USD	642,368	GBP	420,000	JPMorgan Chase Bank N.A.		9/10/15		(17,837	)
USD	1,379,598	GBP	890,000	Morgan Stanley & Co. International PLC		9/10/15		(19,408	)
USD	1,218,750	GBP	780,000	State Street Bank and Trust Co.		9/10/15		(7,345	)
USD	6,716,204	GBP	4,347,691	UBS AG		9/10/15		(118,005	)
USD	339,974	HUF	93,000,000	Bank of America N.A.		9/10/15		11,687
USD	46,204	HUF	13,000,000	BNP Paribas S.A.		9/10/15		315
USD	53,178	HUF	15,000,000	BNP Paribas S.A.		9/10/15		229
USD	2,708,017	HUF	767,100,000	Morgan Stanley & Co. International PLC		9/10/15		179
USD	352,468	HUF	97,000,000	UBS AG		9/10/15		10,061
USD	484,226	IDR	6,600,000,000	HSBC Bank PLC		9/10/15		(3,471	)
USD	155,194	IDR	2,090,000,000	HSBC Bank PLC		9/10/15		757
USD	176,449	IDR	2,390,000,000	HSBC Bank PLC		9/10/15		(156	)
USD	42,849	IDR	580,000,000	Morgan Stanley & Co. International PLC		9/10/15		(9	)
USD	1,227,602	IDR	16,584,900,000	Morgan Stanley & Co. International PLC		9/10/15		2,086
USD	1,288,148	IDR	17,390,000,000	UBS AG		9/10/15		3,141
USD	225,935	IDR	3,110,000,000	UBS AG		9/10/15		(3,873	)
USD	23,725	ILS	89,591	Barclays Bank PLC		9/10/15		(30	)
USD	35,047	ILS	134,809	Credit Suisse International		9/10/15		(698	)
USD	365,144	ILS	1,402,427	Credit Suisse International		9/10/15		(6,710	)
USD	2,462,450	ILS	9,445,900	Credit Suisse International		9/10/15		(42,135	)
USD	79,113	ILS	302,232	Credit Suisse International		9/10/15		(1,024	)
USD	932,748	ILS	3,514,751	Credit Suisse International		9/10/15		810
USD	826,909	ILS	3,134,331	Credit Suisse International		9/10/15		(4,161	)
USD	192,539	ILS	735,000	Deutsche Bank AG		9/10/15		(2,346	)
USD	192,706	ILS	735,000	Deutsche Bank AG		9/10/15		(2,180	)
USD	192,403	ILS	735,000	Deutsche Bank AG		9/10/15		(2,482	)
USD	189,513	ILS	725,000	Deutsche Bank AG		9/10/15		(2,721	)
USD	538,520	ILS	2,060,000	Deutsche Bank AG		9/10/15		(7,690	)
USD	754,459	ILS	2,887,768	Deutsche Bank AG		9/10/15		(11,234	)
USD	612,378	ILS	2,350,000	Deutsche Bank AG		9/10/15		(10,726	)
USD	498,994	ILS	1,910,000	Deutsche Bank AG		9/10/15		(7,443	)
USD	625,675	ILS	2,400,000	Deutsche Bank AG		9/10/15		(10,687	)
USD	116,826	ILS	451,409	Goldman Sachs International		9/10/15		(2,866	)
USD	112,248	ILS	433,782	Morgan Stanley & Co. International PLC		9/10/15		(2,770	)

See Notes to Financial Statements.



38	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015


Schedule of Investments (continued)		CoreAlpha Bond Master Portfolio

As of June 30, 2015, forward foreign currency contracts outstanding were as follows (continued):


Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
USD	9,778	ILS	37,573	UBS AG		9/10/15	$	(185	)
USD	355,364	ILS	1,364,100	UBS AG		9/10/15		(6,328	)
USD	51,815	ILS	195,657	UBS AG		9/10/15		(64	)
USD	280,538	ILS	1,065,669	UBS AG		9/10/15		(2,025	)
USD	495,575	INR	32,200,000	Goldman Sachs International		9/10/15		(3,220	)
USD	958,135	INR	62,250,000	HSBC Bank PLC		9/10/15		(6,150	)
USD	1,288,589	INR	83,900,000	HSBC Bank PLC		9/10/15		(11,066	)
USD	1,273,173	INR	83,100,000	HSBC Bank PLC		9/10/15		(14,089	)
USD	372,300	INR	24,300,000	HSBC Bank PLC		9/10/15		(4,120	)
USD	3,417,741	INR	222,700,000	HSBC Bank PLC		9/10/15		(31,998	)
USD	681,009	INR	44,000,000	HSBC Bank PLC		9/10/15		(574	)
USD	1,243,431	INR	80,450,000	HSBC Bank PLC		9/10/15		(2,781	)
USD	1,243,431	INR	80,450,000	JPMorgan Chase Bank N.A.		9/10/15		(2,781	)
USD	343,510	INR	22,200,000	Morgan Stanley & Co. International PLC		9/10/15		(380	)
USD	5,748,512	INR	371,900,000	UBS AG		9/10/15		(12,413	)
USD	957,840	INR	62,250,000	UBS AG		9/10/15		(6,445	)
USD	390,950	INR	25,400,000	UBS AG		9/10/15		(2,510	)
USD	2,488,016	INR	160,900,000	UBS AG		9/10/15		(4,409	)
USD	274,946	JPY	34,220,955	Barclays Bank PLC		9/10/15		(4,957	)
USD	2,229,171	JPY	273,196,064	Barclays Bank PLC		9/10/15		(5,381	)
USD	5,534,021	JPY	685,000,000	BNP Paribas S.A.		9/10/15		(68,798	)
USD	2,249,653	JPY	276,521,049	BNP Paribas S.A.		9/10/15		(12,095	)
USD	1,672,795	JPY	207,000,000	Credit Suisse International		9/10/15		(20,320	)
USD	783,653	JPY	97,000,000	Deutsche Bank AG		9/10/15		(9,738	)
USD	1,444,415	JPY	179,779,045	Deutsche Bank AG		9/10/15		(26,051	)
USD	2,064,192	JPY	255,000,000	Deutsche Bank AG		9/10/15		(21,529	)
USD	8,264,450	JPY	1,034,000,000	Goldman Sachs International		9/10/15		(192,944	)
USD	4,499,387	JPY	553,001,643	Goldman Sachs International		9/10/15		(23,778	)
USD	14,717	JPY	1,803,936	HSBC Bank PLC		9/10/15		(38	)
USD	5,152,042	JPY	634,000,000	HSBC Bank PLC		9/10/15		(33,633	)
USD	582,029	JPY	72,000,000	HSBC Bank PLC		9/10/15		(6,880	)
USD	8,287,901	JPY	1,024,000,000	JPMorgan Chase Bank N.A.		9/10/15		(87,700	)
USD	16,942,879	JPY	2,092,000,000	JPMorgan Chase Bank N.A.		9/10/15		(168,212	)
USD	2,195,950	JPY	271,000,000	JPMorgan Chase Bank N.A.		9/10/15		(20,640	)
USD	2,627,053	JPY	326,000,000	UBS AG		9/10/15		(39,398	)
USD	6,260,766	JPY	770,077,308	UBS AG		9/10/15		(37,926	)
USD	5,539,517	JPY	685,000,000	Westpac Banking Corp.		9/10/15		(63,302	)
USD	503,371	KRW	560,000,000	Barclays Bank PLC		9/10/15		2,134
USD	264,242	KRW	295,000,000	Credit Suisse International		9/10/15		198
USD	902,990	KRW	1,002,500,000	Deutsche Bank AG		9/10/15		5,687
USD	2,546,523	KRW	2,860,000,000	Deutsche Bank AG		9/10/15		(13,364	)
USD	4,988,124	KRW	5,565,000,000	HSBC Bank PLC		9/10/15		7,084
USD	2,448,528	KRW	2,731,700,000	HSBC Bank PLC		9/10/15		3,477
USD	3,418,904	KRW	3,814,300,000	HSBC Bank PLC		9/10/15		4,855
USD	2,505,828	KRW	2,795,000,000	HSBC Bank PLC		9/10/15		4,119
USD	528,933	KRW	585,000,000	HSBC Bank PLC		9/10/15		5,320
USD	200,606	KRW	225,000,000	HSBC Bank PLC		9/10/15		(783	)
USD	205,798	KRW	230,000,000	HSBC Bank PLC		9/10/15		(67	)
USD	2,204,689	KRW	2,445,000,000	JPMorgan Chase Bank N.A.		9/10/15		16,254
USD	1,821,147	KRW	2,010,000,000	JPMorgan Chase Bank N.A.		9/10/15		22,065
USD	1,097,769	KRW	1,225,000,000	Morgan Stanley & Co. International PLC		9/10/15		1,313
USD	394,301	KRW	440,000,000	Morgan Stanley & Co. International PLC		9/10/15		472
USD	311,408	KRW	347,500,000	Morgan Stanley & Co. International PLC		9/10/15		373
USD	429,876	KRW	480,000,000	Morgan Stanley & Co. International PLC		9/10/15		245
USD	903,886	KRW	1,002,500,000	Morgan Stanley & Co. International PLC		9/10/15		6,583
USD	368,175	KRW	410,000,000	Morgan Stanley & Co. International PLC		9/10/15		1,198
USD	969,828	KRW	1,080,000,000	Morgan Stanley & Co. International PLC		9/10/15		3,157
USD	1,926,523	KRW	2,150,000,000	Morgan Stanley & Co. International PLC		9/10/15		2,132
USD	232,101	KRW	260,000,000	Morgan Stanley & Co. International PLC		9/10/15		(616	)
USD	1,824,536	KRW	2,010,000,000	Morgan Stanley & Co. International PLC		9/10/15		25,454
USD	311,575	KRW	347,500,000	UBS AG		9/10/15		540
USD	394,513	KRW	440,000,000	UBS AG		9/10/15		684
USD	1,098,359	KRW	1,225,000,000	UBS AG		9/10/15		1,904
USD	2,504,593	KRW	2,795,000,000	UBS AG		9/10/15		2,884

See Notes to Financial Statements.



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	39


Schedule of Investments (continued)		CoreAlpha Bond Master Portfolio

As of June 30, 2015, forward foreign currency contracts outstanding were as follows (continued):


Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
USD	358,631	MXN	5,600,000	Citibank N.A.		9/10/15	$	3,491
USD	230,266	MXN	3,600,000	Deutsche Bank AG		9/10/15		1,961
USD	958,821	MXN	15,000,000	Goldman Sachs International		9/10/15		7,552
USD	2,527,621	MXN	40,100,000	Goldman Sachs International		9/10/15		(15,439	)
USD	1,160,695	MXN	18,000,000	Goldman Sachs International		9/10/15		19,171
USD	3,622,899	MXN	56,160,000	JPMorgan Chase Bank N.A.		9/10/15		61,347
USD	471,010	MXN	7,300,000	Morgan Stanley & Co. International PLC		9/10/15		8,059
USD	837,082	MXN	13,100,000	Morgan Stanley & Co. International PLC		9/10/15		6,307
USD	1,237,322	MXN	19,300,000	UBS AG		9/10/15		13,356
USD	3,169,156	MYR	11,775,000	Deutsche Bank AG		9/10/15		64,778
USD	21,044	MYR	78,382	Deutsche Bank AG		9/10/15		380
USD	834,884	MYR	3,140,000	Deutsche Bank AG		9/10/15		7,050
USD	535,825	MYR	1,990,000	Goldman Sachs International		9/10/15		11,178
USD	834,330	MYR	3,140,000	Goldman Sachs International		9/10/15		6,496
USD	831,894	MYR	3,130,000	HSBC Bank PLC		9/10/15		6,696
USD	1,479,456	MYR	5,545,000	HSBC Bank PLC		9/10/15		17,564
USD	172,689	MYR	650,000	HSBC Bank PLC		9/10/15		1,322
USD	18,732	MYR	69,743	JPMorgan Chase Bank N.A.		9/10/15		344
USD	825,405	MYR	3,080,000	Morgan Stanley & Co. International PLC		9/10/15		13,390
USD	105,222	MYR	391,875	Morgan Stanley & Co. International PLC		9/10/15		1,908
USD	2,533,721	MYR	9,580,000	Morgan Stanley & Co. International PLC		9/10/15		8,036
USD	648,663	MYR	2,450,000	Morgan Stanley & Co. International PLC		9/10/15		2,741
USD	837,892	MYR	3,140,000	Morgan Stanley & Co. International PLC		9/10/15		10,058
USD	1,478,864	MYR	5,545,000	Morgan Stanley & Co. International PLC		9/10/15		16,972
USD	943,146	MYR	3,550,000	Morgan Stanley & Co. International PLC		9/10/15		7,218
USD	2,490,066	MYR	9,400,000	Standard Chartered Bank		9/10/15		11,836
USD	1,482,469	MYR	5,560,000	Standard Chartered Bank		9/10/15		16,622
USD	8,457,959	MYR	31,445,000	UBS AG		9/10/15		167,753
USD	826,513	MYR	3,080,000	UBS AG		9/10/15		14,497
USD	956,347	MYR	3,560,000	UBS AG		9/10/15		17,783
USD	3,727,335	NOK	28,980,538	Citibank N.A.		9/10/15		49,696
USD	8,996,922	NOK	70,100,000	Credit Suisse International		9/10/15		101,209
USD	7,012,087	NOK	55,600,000	Credit Suisse International		9/10/15		(43,571	)
USD	4,327,109	NOK	34,000,000	Goldman Sachs International		9/10/15		12,498
USD	2,986,048	NOK	23,800,000	Goldman Sachs International		9/10/15		(34,179	)
USD	4,626,651	NOK	35,950,000	JPMorgan Chase Bank N.A.		9/10/15		64,584
USD	897,347	NOK	6,969,462	UBS AG		9/10/15		12,920
USD	4,543,157	NOK	35,200,000	UBS AG		9/10/15		76,266
USD	7,253,549	NZD	10,310,000	Barclays Bank PLC		9/10/15		322,324
USD	4,856,124	NZD	6,970,000	Credit Suisse International		9/10/15		170,321
USD	342,641	NZD	500,000	Deutsche Bank AG		9/10/15		6,500
USD	16,832,325	NZD	23,798,000	Goldman Sachs International		9/10/15		833,364
USD	1,135,965	NZD	1,660,000	HSBC Bank PLC		9/10/15		19,977
USD	570,051	NZD	830,000	HSBC Bank PLC		9/10/15		12,057
USD	465,297	NZD	690,000	JPMorgan Chase Bank N.A.		9/10/15		1,423
USD	1,139,641	NZD	1,690,000	JPMorgan Chase Bank N.A.		9/10/15		3,485
USD	876,647	NZD	1,300,000	JPMorgan Chase Bank N.A.		9/10/15		2,681
USD	4,854,117	NZD	6,970,000	Westpac Banking Corp.		9/10/15		168,313
USD	8,707,247	NZD	12,580,000	Westpac Banking Corp.		9/10/15		249,942
USD	2,019,780	PHP	91,900,000	Citibank N.A.		9/10/15		(10,598	)
USD	322,015	PHP	14,700,000	Deutsche Bank AG		9/10/15		(2,757	)
USD	798,764	PHP	36,200,000	HSBC Bank PLC		9/10/15		(1,015	)
USD	2,895,660	PHP	132,100,000	JPMorgan Chase Bank N.A.		9/10/15		(22,871	)
USD	2,897,565	PHP	132,100,000	Standard Chartered Bank		9/10/15		(20,966	)
USD	1,089,758	PHP	49,900,000	Standard Chartered Bank		9/10/15		(12,700	)
USD	610,586	PHP	27,800,000	UBS AG		9/10/15		(3,609	)
USD	513,389	PLN	1,900,000	BNP Paribas S.A.		9/10/15		9,148
USD	171,872	PLN	635,000	BNP Paribas S.A.		9/10/15		3,350
USD	97,461	PLN	360,000	BNP Paribas S.A.		9/10/15		1,920
USD	351,817	PLN	1,300,000	BNP Paribas S.A.		9/10/15		6,811
USD	637,471	PLN	2,400,000	BNP Paribas S.A.		9/10/15		536
USD	358,501	PLN	1,320,000	Goldman Sachs International		9/10/15		8,186
USD	158,311	PLN	585,000	Société Générale		9/10/15		3,058
USD	227,273	PLN	840,000	Société Générale		9/10/15		4,345

See Notes to Financial Statements.



40	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015


Schedule of Investments (continued)		CoreAlpha Bond Master Portfolio

As of June 30, 2015, forward foreign currency contracts outstanding were as follows (concluded):


Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
USD	2,266,052	SEK	18,500,000	Barclays Bank PLC		9/10/15	$	33,237
USD	10,861,798	SEK	91,200,000	BNP Paribas S.A.		9/10/15		(145,375	)
USD	7,447,018	SEK	62,900,000	Credit Suisse International		9/10/15		(144,552	)
USD	2,297,276	SEK	19,031,000	Credit Suisse International		9/10/15		374
USD	5,855,346	SEK	49,300,000	Credit Suisse International		9/10/15		(94,803	)
USD	7,921,484	SEK	65,600,000	Credit Suisse International		9/10/15		4,043
USD	126,792	SEK	1,050,000	Credit Suisse International		9/10/15		65
USD	7,924,141	SEK	65,600,000	Credit Suisse International		9/10/15		6,700
USD	126,835	SEK	1,050,000	Credit Suisse International		9/10/15		107
USD	837,885	SEK	6,900,000	Goldman Sachs International		9/10/15		5,106
USD	582,313	SEK	4,800,000	Goldman Sachs International		9/10/15		2,988
USD	5,629,025	SEK	46,400,000	Goldman Sachs International		9/10/15		28,885
USD	1,289,824	SEK	10,500,000	HSBC Bank PLC		9/10/15		22,551
USD	2,808,414	SEK	22,800,000	JPMorgan Chase Bank N.A.		9/10/15		56,620
USD	3,852,561	SEK	31,500,000	JPMorgan Chase Bank N.A.		9/10/15		50,741
USD	2,293,724	SEK	18,800,000	JPMorgan Chase Bank N.A.		9/10/15		24,702
USD	26,861,240	SEK	228,556,923	UBS AG		9/10/15		(723,909	)
USD	73,214	SGD	100,000	Barclays Bank PLC		9/10/15		(977	)
USD	134,318	SGD	180,000	Credit Suisse International		9/10/15		774
USD	187,963	SGD	253,973	Deutsche Bank AG		9/10/15		(463	)
USD	1,193,373	SGD	1,611,745	Deutsche Bank AG		9/10/15		(2,402	)
USD	739,150	SGD	990,000	Goldman Sachs International		9/10/15		4,657
USD	870,059	SGD	1,170,000	Goldman Sachs International		9/10/15		2,021
USD	1,927,602	SGD	2,605,000	Goldman Sachs International		9/10/15		(5,081	)
USD	2,364,381	SGD	3,200,000	HSBC Bank PLC		9/10/15		(9,740	)
USD	371,003	SGD	500,000	HSBC Bank PLC		9/10/15		47
USD	230,037	SGD	310,000	HSBC Bank PLC		9/10/15		44
USD	1,688,266	SGD	2,280,000	HSBC Bank PLC		9/10/15		(3,295	)
USD	182,040	SGD	246,027	JPMorgan Chase Bank N.A.		9/10/15		(491	)
USD	375,451	SGD	500,000	JPMorgan Chase Bank N.A.		9/10/15		4,495
USD	2,332,038	SGD	3,180,000	UBS AG		9/10/15		(27,244	)
USD	9,811	SGD	13,255	UBS AG		9/10/15		(23	)
USD	1,432,088	THB	48,524,885	Barclays Bank PLC		9/10/15		(1,312	)
USD	121,119	THB	4,102,554	Deutsche Bank AG		9/10/15		(68	)
USD	258,465	THB	8,773,612	Deutsche Bank AG		9/10/15		(703	)
USD	274,257	THB	9,312,520	Deutsche Bank AG		9/10/15		(830	)
USD	28,887	THB	980,700	Goldman Sachs International		9/10/15		(83	)
USD	314,772	THB	10,700,000	Goldman Sachs International		9/10/15		(1,301	)
USD	663,384	THB	22,500,000	HSBC Bank PLC		9/10/15		(1,255	)
USD	477,558	THB	16,172,561	Morgan Stanley & Co. International PLC		9/10/15		(171	)
USD	144,823	THB	4,900,000	Morgan Stanley & Co. International PLC		9/10/15		79
USD	231,062	THB	7,845,688	UBS AG		9/10/15		(696	)
USD	46,750	THB	1,587,480	UBS AG		9/10/15		(143	)
USD	16,262	TRY	45,193	Barclays Bank PLC		9/10/15		(271	)
USD	623,996	TRY	1,730,000	Credit Suisse International		9/10/15		(8,902	)
USD	1,630,749	TRY	4,492,958	Deutsche Bank AG		9/10/15		(12,941	)
USD	358,063	TRY	994,807	Deutsche Bank AG		9/10/15		(5,874	)
USD	67,843	TRY	187,042	UBS AG		9/10/15		(584	)
USD	1,366,750	TWD	42,100,000	Citibank N.A.		9/10/15		1,678
USD	10,236,384	TWD	314,820,000	HSBC Bank PLC		9/10/15		28,500
USD	585,271	TWD	18,000,000	HSBC Bank PLC		9/10/15		1,630
USD	1,053,826	TWD	32,500,000	HSBC Bank PLC		9/10/15		30
USD	718,679	TWD	22,200,000	JPMorgan Chase Bank N.A.		9/10/15		(1,145	)
USD	1,214,877	TWD	37,400,000	Morgan Stanley & Co. International PLC		9/10/15		2,201
USD	340,717	TWD	10,500,000	UBS AG		9/10/15		259
USD	653,340	TWD	20,100,000	UBS AG		9/10/15		1,607
Total							$	(4,402,697	)

•

As of June 30, 2015, centrally cleared credit default swaps — buy protection outstanding were as follows:

Index

Pay
Fixed Rate

Clearinghouse

Expiration
Date

Notional
Amount
(000)

Unrealized
Appreciation

Markit ITraxx XO, Series 23, Version 4

5.00

InterContinental Exchange

6/20/20

EUR 8,301

121,547

See Notes to Financial Statements.



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	41


Schedule of Investments (continued)		CoreAlpha Bond Master Portfolio

•

As of June 30, 2015, centrally cleared credit default swaps — sold protection outstanding were as follows:

Index

Receive
Fixed Rate

Clearinghouse

Expiration
Date

Credit

Rating¹

Notional
Amount
(000)²

Unrealized
Appreciation

Dow Jones CDX North America High Yield Series 23, Version 1

5.00

Chicago Mercantile

12/20/19

BB-

USD 7,275

199,842

¹ Using S&P’s rating of the underlying securities of the index.

² The maximum potential amount the Master Portfolio may pay should a negative credit event take place as defined under the terms of the agreement.

•

As of June 30, 2015, centrally cleared interest rate swaps outstanding were as follows:

Fixed
Rate

Floating
Rate

Clearinghouse

Effective
Date

Expiration
Date

Notional
Amount
(000)

Unrealized
Appreciation
(Depreciation)

1.63%³

3-Month LIBOR

Chicago Mercantile

N/A

5/12/20

USD 33,049

(165,038

)

0.28%⁴

3-Month LIBOR

Chicago Mercantile

N/A

5/19/20

USD 30,392

(205,498

)

2.32%⁴

3-Month LIBOR

Chicago Mercantile

9/30/15⁵

5/31/22

USD 53,120

(458,343

)

2.19%⁴

3-Month LIBOR

Chicago Mercantile

9/30/15⁵

5/31/22

USD 16,280

(15,637

)

0.98%⁴

6-Month EURIBOR

Chicago Mercantile

9/10/15⁵

5/15/24

EUR 61,930

370,446

3.31%⁴

3-Month LIBOR

Chicago Mercantile

6/29/20⁵

6/29/25

USD 178,934

(730,083

)

3.46%⁴

3-Month LIBOR

Chicago Mercantile

N/A

5/14/44

USD 7,035

(779,731

)

2.66%⁴

3-Month LIBOR

Chicago Mercantile

N/A

5/12/45

USD 8,113

449,025

2.68%⁴

3-Month LIBOR

Chicago Mercantile

N/A

5/19/45

USD 6,711

332,868

Total

(1,201,991

)

³ The Master Portfolio pays a floating rate and receives fixed rate.

⁴ The Master Portfolio pays a fixed rate and receives floating rate.

⁵ Forward swap.

•

As of June 30, 2015, OTC credit default swaps — sold protection outstanding were as follows:


Index	Receive Fixed Rate			Counterparty	Expiration Date	Credit Rating¹		Notional Amount (000)²		Value			Premiums (Received)			Unrealized Appreciation
Markit CMBX North America AM Index, Series 3		0.08	%	Goldman Sachs International	12/13/49		AA+	$	13,615	$	(51,095	)	$	(89,263	)	$	38,168

•

As of June 30, 2015, OTC total return swaps outstanding were as follows:


Reference Entity	Fixed Rate⁶			Counterparty	Effective Date	Expiration Date		Notional Amount (000)		Value			Premiums Paid (Received)		Unrealized Appreciation (Depreciation)
Change in Return of the Consumer Price Index for All Urban Consumers		1.72	%	Deutsche Bank AG	N/A		2/05/20	$	50,404	$	(171,639	)		—	$	(171,639	)
Change in Return of the Consumer Price Index for All Urban Consumers		1.75	%	Deutsche Bank AG	N/A		3/11/20	$	50,404		66,745			—		66,745
Total										$	(104,894	)		—	$	(104,894	)

⁶ The Master Portfolio pays the fixed rate and receives the total return of the reference entity.

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investments and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that Master Portfolio has the ability to access

•

See Notes to Financial Statements.



42	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015


Schedule of Investments (concluded)		CoreAlpha Bond Master Portfolio

As of June 30, 2015, the following tables summarize the Master Portfolio’s investments and derivative financial instruments categorized in the disclosure hierarchy:


	Level 1			Level 2			Level 3		Total
Assets:
Investments:
Long-Term Investments:
Asset-Backed Securities		—		$	345,736,511			—	$	345,736,511
Corporate Bonds		—			1,151,739,523			—		1,151,739,523
Foreign Agency Obligations		—			41,114,872			—		41,114,872
Municipal Bonds		—			20,261,853			—		20,261,853
Non-Agency Mortgage-Backed Securities		—			415,495,045		$	1,855,723		417,350,768
U.S. Government Sponsored Agency Securities		—			1,486,891,770			—		1,486,891,770
U.S. Treasury Obligations		—			322,297,593			—		322,297,593
Investment Companies	$	21,273,852			—			—		21,273,852
Preferred Securities		5,082,280			8,433,500			—		13,515,780
Short-Term Securities		36,014,720			—			—		36,014,720
Liabilities:
Investments:
TBA Sale Commitments		—			(267,083,712	)		—		(267,083,712	)

Total	$	62,370,852		$	3,524,886,955		$	1,855,723	$	3,589,113,530


	Level 1			Level 2			Level 3		Total
Derivative Financial Instruments¹
Assets:
Credit contracts		—		$	359,557			—	$	359,557
Foreign currency exchange contracts		—			9,127,809			—		9,127,809
Interest rate contracts	$	4,129,994			1,152,339			—		5,282,333
Other contracts		—			66,745			—		66,745
Liabilities:
Foreign currency exchange contracts		—			(13,530,506	)		—		(13,530,506	)
Interest rate contracts		(2,305,094	)		(2,354,330	)		—		(4,659,424	)
Other contracts		—			(171,639	)				(171,639	)

Total	$	1,824,900		$	(5,350,025	)		—	$	(3,525,125	)

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


	Level 1		Level 2			Level 3	Total
Assets:
Cash	$	461,765		—		—	$	461,765
Cash pledged as collateral for OTC derivatives		1,400,000		—		—		1,400,000
Cash pledged for centrally cleared swaps		9,235,450		—		—		9,235,450
Cash pledged for financial futures contracts		9,338,080		—		—		9,338,080
Foreign currency at value		2,178,937		—		—		2,178,937
Liabilities:
Cash received as collateral for TBA commitments		—	$	(92,000	)	—		(92,000	)

Total	$	22,614,232	$	(92,000	)	—	$	22,522,232

Duringthe six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	43


Statement of Assets and Liabilities		CoreAlpha Bond Master Portfolio


June 30, 2015 (Unaudited)

Assets
Investments at value — unaffiliated (cost — $3,784,674,750)	$	3,798,908,670
Investments at value — affiliated (cost — $57,941,197)		57,288,572
Cash		461,765
Foreign currency at value (cost — $2,270,204)		2,178,937
Cash pledged:
Financial futures contracts		9,338,080
Centrally cleared swaps		9,235,450
Collateral — OTC derivatives		1,400,000
Receivables:
TBA sale commitments		266,228,892
Interest		16,669,159
Contributions from investors		6,399,300
Investments sold		1,226,384
Swaps		4,033
Unrealized appreciation on forward foreign currency exchange contracts		9,127,809
Variation margin receivable on centrally cleared swaps		220,424
Variation margin receivable on financial futures contracts		138,578
Unrealized appreciation on OTC swaps		104,913

Total assets		4,178,930,966


Liabilities
Cash received as collateral for TBA commitments		92,000
TBA sale commitments at value (proceeds — $266,228,893)		267,083,712
Payables:
Investments purchased		889,882,286
Withdrawals to investors		4,028,645
Investment advisory fees		586,233
Professional fees		27,376
Trustees’ fees		21,352
Principle paydowns		12,663
Swaps		5,425
Unrealized depreciation on forward foreign currency exchange contracts		13,530,506
Variation margin payable on financial futures contracts		251,625
Variation margin payable on centrally cleared swaps		183,408
Unrealized depreciation on OTC derivatives		171,639
Swap premiums received		89,263

Total liabilities		1,175,966,133

Net Assets	$	3,002,964,833


Net Assets Consist of
Investors’ capital	$	2,993,854,749
Net unrealized appreciation (depreciation)		9,110,084

Net Assets	$	3,002,964,833


Statement of Operations		CoreAlpha Bond Master Portfolio


Six Months Ended June 30, 2015 (Unaudited)

Investment Income
Interest	$	40,783,730
Income — affiliated		278,787
Dividends		180,620

Total income		41,243,137


Expenses
Investment advisory		3,577,797
Independent Trustees		44,453
Professional		26,078

Total expenses		3,648,328
Less fees waived by the Manager		(85,580	)

Total expenses after fees waived		3,562,748

Net investment income		37,680,389


Realized and Unrealized Gain (Loss)
Net realized gain (loss) from:
Investments		5,141,136
Financial futures contracts		2,824,168
Foreign currency transactions		(1,464,502	)
Options written		1,148,566
Swaps		2,278,269

		9,927,637

Net change in unrealized appreciation (depreciation) on:
Investments		(44,071,936	)
Financial futures contracts		890,143
Foreign currency translations		(5,170,648	)
Options written		(200,129	)
Swaps		(207,291	)

		(48,759,861	)

Net realized and unrealized loss		(38,832,224	)

Net Decrease in Net Assets Resulting from Operations	$	(1,151,835	)


Statements of Changes in Net Assets		CoreAlpha Bond Master Portfolio


Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	37,680,389		$	86,655,251
Net realized gain		9,927,637			56,120,150
Net change in unrealized appreciation (depreciation)		(48,759,861	)		76,655,028

Net increase (decrease) in net assets resulting from operations		(1,151,835	)		219,430,429


Capital Transactions
Proceeds from contributions		312,136,527			1,468,046,895
Value of withdrawals		(195,400,553	)		(2,173,243,591	)

Net increase (decrease) in net assets derived from capital transactions		116,735,974			(705,196,696	)


Net Assets
Total increase (decrease) in net assets		115,584,139			(485,766,267	)
Beginning of period		2,887,380,694			3,373,146,961

End of period	$	3,002,964,833		$	2,887,380,694


Financial Highlights		CoreAlpha Bond Master Portfolio


	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014		2013		2012		2011		2010

Total Return
Total return		0.00%	¹		6.64%		(2.39)%		4.95%		8.38%		6.56%


Ratios to Average Net Assets
Total expenses		0.25%	²		0.25%		0.25%		0.25%		0.27%		0.36%

Total expenses after fees waived		0.24%	²		0.24%		0.24%		0.24%		0.26%		0.35%

Net investment income		2.56%	²		2.52%		2.23%		2.36%		3.22%		3.19%


Supplemental Data
Net assets, end of period (000)	$	3,002,965		$	2,887,381	$	3,373,147	$	2,789,640	$	2,362,453	$	2,150,563

Portfolio turnover rate^3,4		275%			686%		986%		2,128%		1,646%		621%	⁵

Aggregate total return.

Annualized.

Portfolio turnover rates include TBA transactions, if any.

⁴

Includes mortgage dollar roll transactions (“MDRs”). Additional information regarding portfolio turnover rate is as follows:

Six Months Ended
June 30,
2015

(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Portfolio turnover rate (excluding MDRs)

215%

470%

736%

1,774%

1,510%

⁵

Excluding TBA transactions, the portfolio turnover rate would have been 170%.


Notes to Financial Statements (Unaudited)		CoreAlpha Bond Master Portfolio

1. Organization:

CoreAlpha Bond Master Portfolio (the “Master Portfolio”), a series of Master Investment Portfolio (“MIP”), is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a diversified, open-end management investment company. MIP is organized as a Delaware statutory trust.

The Master Portfolio, together with certain other registered investment companies advised by BlackRock Advisors, LLC (the “Manager”) or its affiliates, is included in a complex of open-end funds referred to as the Equity-Liquidity Complex.

2. Significant Accounting Policies:

Bond investments are valued on the basis of last available bid prices or current market quotations provided by dealers or pricing services. Floating rate loan interests are valued at the mean of the bid prices from one or more brokers or dealers as obtained from a pricing service. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments, various relationships observed in the market between investments and calculated yield measures. Asset-backed and mortgage-backed securities are valued by independent pricing services using models that consider estimated cash flows of each tranche of the security, establish a benchmark yield and develop an estimated tranche-specific spread to the benchmark yield based on the unique attributes of the tranche. Financial futures contracts traded on exchanges are valued at their last sale price. To-be-announced (“TBA”) commitments are valued on the basis of last available bid prices or current market quotations provided by pricing services. Swap agreements are valued utilizing quotes received daily by the Master Portfolio’s pricing service or through brokers, which are derived using daily swap curves and models that incorporate a number of market data factors, such as discounted cash flows, trades and values of the underlying reference instruments. Certain centrally cleared swaps are valued at the price determined by the relevant exchange or clearinghouse. Investments in open-end registered investment companies are valued at NAV each business day.

Exchange-traded options are valued at the mean between the last bid and ask prices at the close of the options market in which the options trade. An exchange-traded option for which there is no mean price is valued at the last bid (long positions) or ask (short positions) price. If no bid or ask price is available, the prior day’s price will be used, unless it is determined that the prior day’s price no longer reflects the fair value of the option. Over-the-counter (“OTC”) options are valued by an independent pricing service using a mathematical model, which incorporates a number of market data factors, such as the trades and prices of the underlying instruments.



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	47


Notes to Financial Statements (continued)		CoreAlpha Bond Master Portfolio

market transactions. The income approach generally is used to discount future cash flows to present value and is adjusted for liquidity as appropriate. These factors include but are not limited to: (i) attributes specific to the investment or asset; (ii) the principal market for the investment or asset; (iii) the customary participants in the principal market for the investment or asset; (iv) data assumptions by market participants for the investment or asset, if reasonably available; (v) quoted prices for similar investments or assets in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, recovery rates, liquidation amounts and/or default rates. Due to the inherent uncertainty of valuations of such investments, the fair values may differ from the values that would have been used had an active market existed. The Global Valuation Committee, or its delegate, employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Master Portfolio’s pricing vendors, regular reviews of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices and large movements in market values and reviews of any market related activity. The pricing of all Fair Value Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.

Segregation and Collateralization: In cases where the Master Portfolio enters into certain investments (e.g., dollar rolls, TBA sale commitments, financial futures contracts, forward foreign currency exchange contracts, options written and swaps) that would be “senior securities” for 1940 Act purposes, the Master Portfolio may segregate or designate on its books and records cash or liquid securities having a market value at least equal to the amount of the Master Portfolio’s future obligations under such investments. Doing so allows the investment to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Master Portfolio may be required to deliver/deposit cash and/or securities to/with an exchange or broker-dealer or custodian as collateral for certain investments or obligations.

3. Securities and Other Investments:



48	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015


Notes to Financial Statements (continued)		CoreAlpha Bond Master Portfolio

Inflation-Indexed Bonds: The Master Portfolio may invest in inflation-indexed bonds. Inflation-indexed bonds are fixed income securities whose principal value is periodically adjusted according to the rate of inflation. If the index measuring inflation rises or falls, the principal value of inflation-indexed bonds will be adjusted upward or downward, and consequently the interest payable on these securities (calculated with respect to a larger or smaller principal amount) will be increased or reduced, respectively. Any upward or downward adjustment in the principal amount of an inflation-indexed bond will be included as interest income in the Statement of Operations, even though investors do not receive their principal until maturity. Repayment of the original bond principal upon maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds. For bonds that do not provide a similar guarantee, the adjusted principal value of the bond repaid at maturity may be less than the original principal.

Stripped Mortgage-Backed Securities: The Master Portfolio may invest in stripped mortgage-backed securities issued by the U.S. Government, its agencies and instrumentalities. Stripped mortgage-backed securities are usually structured with two classes that receive different proportions of the interest (IOs) and principal (POs) distributions on a pool of Mortgage Assets. The Master Portfolio also may invest in stripped mortgage-backed securities that are privately issued.

Zero-Coupon Bonds: The Master Portfolio may invest in zero-coupon bonds, which are normally issued at a significant discount from face value and do not provide for periodic interest payments. Zero-coupon bonds may experience greater volatility in market value than other debt obligations of similar maturity which provide for regular interest payments.



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	49


Notes to Financial Statements (continued)		CoreAlpha Bond Master Portfolio

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.

In order to better define contractual rights and to secure rights that will help the Master Portfolio mitigate its counterparty risk, TBA commitments may be entered into by the Master Portfolio under Master Securities Forward Transaction Agreements (each, an “MSFTA”). An MSFTA typically contains, among other things, collateral posting terms and netting provisions in the event of default and/or termination event. The collateral requirements are typically calculated by netting the mark-to-market amount for each transaction under such agreement and comparing that amount to the value of the collateral currently pledged by the Master Portfolio and the counterparty. Cash collateral that has been pledged to cover the obligations of the Master Portfolio and cash collateral received from the counterparty, if any, is reported separately on the Statement of Assets and Liabilities as cash pledged as collateral for TBA commitments or cash received as collateral for TBA commitments, respectively. Non-cash collateral pledged by the Master Portfolio, if any, is noted in the Schedule of Investments. Typically, the Master Portfolio is permitted to sell, repledge or use the collateral it receives; however, the counterparty is not permitted to do so. To the extent amounts due to the Master Portfolio are not fully collateralized, contractually or otherwise, the Master Portfolio bears the risk of loss from counterparty non-performance.

Mortgage Dollar Roll Transactions: The Master Portfolio may sell TBA mortgage-backed securities and simultaneously contract to repurchase substantially similar (i.e., same type, coupon and maturity) securities on a specific future date at an agreed upon price. During the period between the sale and repurchase, the Master Portfolio will not be entitled to receive interest and principal payments on the securities sold. The Master Portfolio accounts for mortgage dollar roll transactions as purchases and sales and realizes gains and losses on these transactions. These transactions may increase the Master Portfolio’s portfolio turnover rate. Mortgage dollar rolls involve the risk that the market value of the securities that the Master Portfolio is required to purchase may decline below the agreed upon repurchase price of those securities.

4. Derivative Financial Instruments:

The Master Portfolio engages in various portfolio investment strategies using derivative contracts both to increase the returns of the Master Portfolio and/or to manage economically its exposure to certain risks such as credit risk, interest rate risk, foreign currency exchange rate risk or other risk (e.g. inflation risk). These contracts may be transacted on an exchange or OTC.

Financial Futures Contracts: The Master Portfolio invests in long and/or short positions in financial futures contracts and options on financial futures contracts to gain exposure to, or economically hedge against, changes in interest rates (interest rate risk). Financial futures contracts are agreements between the Master Portfolio and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and at a specified date. Depending on the terms of the particular contract, financial futures contracts are settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date.



50	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015


Notes to Financial Statements (continued)		CoreAlpha Bond Master Portfolio

some of the investments held by the Master Portfolio are denominated. Non-deliverable forward foreign currency exchange contracts are settled with the counterparty in cash without the delivery of foreign currency. The contract is marked-to-market daily and the change in market value is recorded by the Master Portfolio as an unrealized gain or loss. When the contract is closed, the Master Portfolio records a realized gain or loss equal to the difference between the value at the time it was opened and the value at the time it was closed. The use of forward foreign currency exchange contracts involves the risk that the value of a forward foreign currency exchange contract changes unfavorably due to movements in the value of the referenced foreign currencies.

Options: The Master Portfolio purchases and writes call and put options to increase or decrease its exposure to underlying instruments including interest rate risk and/or, in the case of options written, to generate gains from options premiums. A call option gives the purchaser (holder) of the option the right (but not the obligation) to buy, and obligates the seller (writer) to sell (when the option is exercised) the underlying instrument at the exercise or strike price at any time or at a specified time during the option period. A put option gives the holder the right to sell and obligates the writer to buy the underlying instrument at the exercise or strike price at any time or at a specified time during the option period. When the Master Portfolio purchases (writes) an option, an amount equal to the premium paid (received) by the Master Portfolio is reflected as an asset (liability). The amount of the asset (liability) is subsequently marked-to-market to reflect the current market value of the option purchased (written). When an instrument is purchased or sold through an exercise of an option, the related premium paid (or received) is added to (or deducted from) the basis of the instrument acquired or deducted from (or added to) the proceeds of the instrument sold. When an option expires (or the Master Portfolio enters into a closing transaction), the Master Portfolio realizes a gain or loss on the option to the extent of the premiums received or paid (or gain or loss to the extent the cost of the closing transaction exceeds the premiums received or paid). When the Master Portfolio writes a call option, such option is “covered,” meaning that the Master Portfolio holds the underlying instrument subject to being called by the option counterparty. When the Master Portfolio writes a put option, such option is covered by cash in an amount sufficient to cover the obligation.

In purchasing and writing options, the Master Portfolio bears the risk of an unfavorable change in the value of the underlying instrument or the risk that the Master Portfolio may not be able to enter into a closing transaction due to an illiquid market. Exercise of a written option could result in the Master Portfolio purchasing or selling a security when it otherwise would not, or at a price different from the current market value.

For the six months ended June 30, 2015, transactions in options written were as follows:


	Puts
	Contracts			Notional (000)			Premiums Received
Outstanding options, beginning of period		4,780			—		$	1,156,129
Options written		—		$	8,000,000			26,160
Options expired		(2,390	)		(8,000,000	)		(590,081	)
Options closed		(2,390	)		—			(592,208	)

Outstanding options, end of period		—			—			—

Swaps: The Master Portfolio enters into swap agreements in which the Master Portfolio and a counterparty agree either to make periodic net payments on a specified notional amount or a net payment upon termination. Swap agreements are privately negotiated in the OTC market and may be entered into as a bilateral contract (“OTC swaps”) or centrally cleared (“centrally cleared swaps”). Swaps are marked-to-market daily and changes in value are recorded as unrealized appreciation (depreciation).

For OTC swaps, any upfront premiums paid are recorded as assets and any upfront fees received are recorded as liabilities and are shown as swap premiums paid and swap premiums received, respectively, in the Statement of Assets and Liabilities and amortized over the term of the OTC swap. Payments received or made by the Master Portfolio for OTC swaps are recorded in the Statement of Operations as realized gains or losses, respectively. When an OTC swap is terminated, the Master Portfolio will record a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Master Portfolio’s basis in the contract, if any. Generally, the basis of the contract is the premium received or paid.

In a centrally cleared swap, immediately following execution of the swap agreement, the swap agreement is novated to a central counterparty (the “CCP”) and the Master Portfolio’s counterparty on the swap agreement becomes the CCP. The Master Portfolio is required to interface with the CCP through a broker. Upon entering into a centrally cleared swap, the Master Portfolio is required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on the size and risk profile of the particular swap. Securities deposited as initial margin are designated on the Schedule of Investments and cash deposited is recorded on the Statement of Assets and Liabilities as cash pledged for centrally cleared swaps. The daily change in valuation of centrally cleared swaps is recorded as a receivable or payable for variation margin in the Statement of Assets and Liabilities. Payments received from (paid to) the counterparty, including at termination, are recorded as realized gain (loss) in the Statement of Operations.

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



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	51


Notes to Financial Statements (continued)		CoreAlpha Bond Master Portfolio

•

Credit default swaps — The Master Portfolio enters into credit default swaps to manage its exposure to the market or certain sectors of the market, to reduce its risk exposure to defaults of corporate and/or sovereign issuers or to create exposure to corporate and/or sovereign issuers to which they are not otherwise exposed (credit risk). The Master Portfolio may either buy or sell (write) credit default swaps on single-name issuers (corporate or sovereign), a combination or basket of single-name issuers or traded indexes. Credit default swaps on single-name issuers are agreements in which the protection buyer pays fixed periodic payments to the seller in consideration for a guarantee from the protection seller to make a specific payment should a negative credit event take place with respect to the referenced entity (e.g., bankruptcy, failure to pay, obligation accelerators, repudiation, moratorium or restructuring). Credit default swaps on traded indexes are agreements in which the buyer pays fixed periodic payments to the seller in consideration for a guarantee from the seller to make a specific payment should a write-down, principal or interest shortfall or default of all or individual underlying securities included in the index occur. As a buyer, if an underlying credit event occurs, the Master Portfolio will either (i) receive from the seller an amount equal to the notional amount of the swap and deliver the referenced security or underlying securities comprising the index, or (ii) receive a net settlement of cash equal to the notional amount of the swap less the recovery value of the security or underlying securities comprising the index. As a seller (writer), if an underlying credit event occurs, the Master Portfolio will either pay the buyer an amount equal to the notional amount of the swap and take delivery of the referenced security or underlying securities comprising the index or pay a net settlement of cash equal to the notional amount of the swap less the recovery value of the security or underlying securities comprising the index.

•

Total return swaps — The Master Portfolio enters into total return swaps to obtain exposure to a security or market without owning such security or investing directly in that market or to transfer the risk/return of one market (e.g., fixed income) to another market (e.g., equity or commodity prices) (equity risk, commodity price risk and/or interest rate risk). Total return swaps are agreements in which there is an exchange of cash flows whereby one party commits to make payments based on the total return (coupons plus capital gains/losses) of an underlying instrument in exchange for fixed or floating rate interest payments. To the extent the total return of the instrument or index underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the Master Portfolio will receive a payment from or make a payment to the counterparty.

•

Interest rate swaps — The Master Portfolio enters into interest rate swaps to gain or reduce exposure to interest rates or to manage duration, the yield curve or interest rate risk by economically hedging the value of the fixed rate bonds, which may decrease when interest rates rise (interest rate risk). Interest rate swaps are agreements in which one party pays a stream of interest payments, either fixed or floating, for another party’s stream of interest payments, either fixed or floating, on the same notional amount for a specified period of time. In more complex swaps, the notional principal amount may decline (or amortize) over time.

•

Forward interest rate swaps — The Master Portfolio enters into forward interest rate swaps and forward total return swaps. In a forward swap, the Master Portfolio and the counterparty agree to make either periodic net payments beginning on a specified future effective date or a net payment at termination, unless terminated earlier.

The following is a summary of the Master Portfolio’s derivative financial instruments categorized by risk exposure:


Fair Values of Derivative Financial Instruments as of June 30, 2015
		Value
	Statement of Assets and Liabilities Location	Derivative Assets		Derivative Liabilities
Credit contracts	Net unrealized appreciation (depreciation)¹; Unrealized appreciation (depreciation) on OTC swaps; Swap premiums paid/received	$	359,557	$	(89,263	)
Foreign currency exchange contracts	Unrealized appreciation (depreciation) on forward foreign currency exchange contracts		9,127,809		(13,530,506	)
Interest rate contracts	Net unrealized appreciation (depreciation)¹; Unrealized appreciation (depreciation) on OTC swaps; Swap premiums paid/received		5,282,333		(4,659,424	)
Other contracts	Unrealized appreciation (depreciation) on OTC swaps; Swap premiums paid/received		66,745		(171,639	)

Total		$	14,836,444	$	(18,450,832	)

Includes cumulative appreciation (depreciation) on financial futures contracts and centrally cleared swaps, if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.


The Effect of Derivative Financial Instruments in the Statement of Operations Six Months Ended June 30, 2015
	Net Realized Gain (Loss) From			Net Change in Unrealized Appreciation (Depreciation) on
Credit contracts:
Swaps	$	598,948		$	216,273
Foreign currency exchange contracts:
Foreign currency transactions/translations		(1,641,065	)		(5,069,275	)
Options³		(100,256	)		—
Interest rate contracts:
Financial futures contracts		2,824,168			890,143
Swaps		2,284,571			(318,670	)
Options²		(559,488	)		58,855
Other contracts:
Swaps		(605,250	)		(104,894	)

Total	$	2,801,628		$	(4,327,568	)

Options purchased are included in the net realized gain (loss) from investments and net change in unrealized appreciation (depreciation) on investments.



52	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015


Notes to Financial Statements (continued)		CoreAlpha Bond Master Portfolio

For the six months ended June 30, 2015, the average quarterly balances of outstanding derivative financial instruments were as follows:


Financial futures contracts:
Average notional value of contracts — long	$	819,575,274
Average notional value of contracts — short	$	312,289,330
Forward foreign currency exchange contracts:
Average amounts purchased — in USD	$	965,438,917
Average amounts sold — in USD	$	958,078,493
Options:
Average value of option contracts purchased	$	41,078
Average value of option contracts written	$	7,469
Credit default swaps:
Average notional value — buy protection	$	4,627,183
Average notional value — sell protection	$	49,095,120
Interest rate swaps:
Average notional value — pays fixed rate	$	251,783,591
Average notional value — receives fixed rate	$	31,720,500
Total return swaps:
Average notional value	$	100,808,000

The Master Portfolio’s risk of loss from counterparty credit risk on OTC derivatives is generally limited to the aggregate unrealized gain less the value of any collateral held by the Master Portfolio. For OTC options purchased, the Master Portfolio bears the risk of loss of the amount of the premiums paid plus the positive change in market values net of any collateral held by the Master Portfolio should the counterparty fail to perform under the contracts. Options written by the Master Portfolio do not typically give rise to counterparty credit risk, as options written generally obligate the Master Portfolio, and not the counterparty, to perform.

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



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	53


Notes to Financial Statements (continued)		CoreAlpha Bond Master Portfolio

its counterparties are not fully collateralized, the Master Portfolio bears the risk of loss from counterparty non-performance. Likewise, to the extent the Master Portfolio has delivered collateral to a counterparty and stands ready to perform under the terms of its agreement with such counterparty, the Master Portfolio bears the risk of loss from a counterparty in the amount of the value of the collateral in the event the counterparty fails to return such collateral.

As of June 30, 2015, the Master Portfolio’s derivative assets and liabilities (by type) are as follows:


	Assets			Liabilities
Derivative Financial Instruments:
Financial futures contracts	$	138,578		$	251,625
Forward foreign currency exchange contracts		9,127,809			13,530,506
Swaps — Centrally cleared		220,424			183,408
Swaps — OTC¹		104,913			260,902

Total derivative assets and liabilities in the Statement of Assets and Liabilities	$	9,591,724		$	14,226,441

Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)		(359,002	)		(435,033	)

Total derivative assets and liabilities subject to an MNA	$	9,232,722		$	13,791,408

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

As of June 30, 2015, the following table presents the Master Portfolio’s derivative assets and liabilities by counterparty net of amounts available for offset under an MNA and net of the related collateral received and pledged by the Master Portfolio:


Counterparty	Derivative Assets Subject to an MNA by Counterparty		Derivatives Available for Offset²			Non-cash Collateral Received		Cash Collateral Received			Net Amount of Derivative Assets³
Bank of America NA	$	54,268	$	(54,268	)		—		—			—
Barclays Bank PLC		546,213		(441,406	)		—		—		$	104,807
BNP Paribas S.A		171,721		(171,721	)		—		—			—
Citibank N.A.		311,941		(311,941	)		—		—			—
Credit Suisse International		739,880		(739,880	)		—		—			—
Deutsche Bank AG		1,333,354		(711,651	)		—		—			621,703
Goldman Sachs International		2,560,781		(2,560,781	)		—		—			—
HSBC Bank PLC		534,162		(534,162	)		—		—			—
JPMorgan Chase Bank N.A.		1,092,128		(1,092,128	)		—		—			—
Morgan Stanley & Co. International PLC		242,243		(242,243	)		—		—			—
Royal Bank of Canada		22,755		(22,755	)		—		—			—
Société Générale		11,009		(6,213	)		—		—			4,796
Standard Chartered Bank		34,096		(34,096	)		—		—			—
State Street Bank and Trust Co.		54,242		(7,345	)		—		—			46,897
UBS AG		1,010,385		(1,010,385	)		—		—			—
Westpac Banking Corp		513,544		(513,544	)		—		—			—

Total	$	9,232,722	$	(8,454,519	)		—		—		$	778,203

Counterparty	Derivative Liabilities Subject to an MNA by Counterparty		Derivatives Available for Offset³			Non-cash Collateral Pledged		Cash Collateral Pledged⁴			Net Amount of Derivative Liabilities⁵
Bank of America NA	$	169,198	$	(54,268	)		—		—		$	114,930
Barclays Bank PLC		441,406		(441,406	)		—		—			—
BNP Paribas S.A		410,763		(171,721	)		—		—			239,042
Citibank N.A.		519,644		(311,941	)		—		—			207,703
Credit Suisse International		1,784,009		(739,880	)		—		—			1,044,129
Deutsche Bank AG		711,651		(711,651	)		—		—			—
Goldman Sachs International		3,687,972		(2,560,781	)		—	$	(1,127,191	)		—
HSBC Bank PLC		1,424,289		(534,162	)		—		—			890,127
JPMorgan Chase Bank N.A.		1,492,984		(1,092,128	)		—		—			400,856
Morgan Stanley & Co. International PLC		257,672		(242,243	)		—		—			15,429
Royal Bank of Canada		31,500		(22,755	)		—		—			8,745
Société Générale		6,213		(6,213	)		—		—			—
Standard Chartered Bank		72,269		(34,096	)		—		—			38,173
State Street Bank and Trust Co.		7,345		(7,345	)		—		—			—
UBS AG		2,168,874		(1,010,385	)		—		—			1,158,489
Westpac Banking Corp.		605,619		(513,544	)		—		—			92,075

Total	$	13,791,408	$	(8,454,519	)		—	$	(1,127,191	)		4,209,698

The amount of derivatives available for offset is limited to the amount of derivative assets and/or liabilities that are subject to an MNA.

Net amount represents the net amount receivable from the counterparty in the event of default.

⁴

Excess of collateral pledged to the individual counterparty is not shown for financial reporting purposes.

⁵

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



54	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015


Notes to Financial Statements (continued)		CoreAlpha Bond Master Portfolio

5. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock, Inc. (“BlackRock”) for 1940 Act purposes.

MIP, on behalf of the Master Portfolio, entered into an Investment Advisory Agreement with the Manager, the Master Portfolio’s investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory services. The Manager is responsible for the management of the Master Portfolio’s portfolio and provides the necessary personnel, facilities, equipment and certain other services to the operations of the Master Portfolio. For such services, the Master Portfolio pays the Manager a monthly fee based on a percentage of the Master Portfolio’s average daily net assets at the following annual rates:


Average Daily Net Assets	Investment Advisory Fee
First $1 Billion		0.25%
$1 Billion — $3 Billion		0.24%
$3 Billion — $5 Billion		0.23%
$5 Billion — $10 Billion		0.22%
Greater than $10 Billion		0.21%

The Manager entered into separate sub-advisory agreements with BlackRock International Limited (“BIL”) and BlackRock Fund Advisors (“BFA”), both affiliates of the Manager. The Manager pays BIL and BFA, for services they provide, a monthly fee that is a percentage of the investment advisory fees paid by the Master Portfolio to the Manager.

The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the Master Portfolio pays to the Manager indirectly through its investment in affiliated money market funds. This amount is included in fees waived by the Manager in the Statement of Operations. However, the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid in connection with the Master Portfolio’s investments in other affiliated investment companies, if any. For the six months ended June 30, 2015, the amount waived was $15,049.

The fees and expenses of MIP’s trustees who are not “interested persons” of MIP, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and MIP’s independent registered public accounting firm (together, the “independent expenses”) are paid directly by the Master Portfolio. The Manager has contractually agreed to provide an offsetting credit against the administration fees paid by the Master Portfolio in an amount equal to the independent expenses through April 30, 2016. The amount is included in fees waived by Manager in the Statement of Operations. For the six months ended June 30, 2015, the Manager waived $70,531 pursuant to this agreement.

The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of the Manager, to serve as securities lending agent for the Master Portfolio, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending. The Master Portfolio is responsible for fees in connection with the investment of cash collateral received for securities on loan in a money market fund managed by the Manager or its affiliates, however, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees the Master Portfolio bears to an annual rate of 0.04% (the “collateral investment fees”).

Certain officers and/or trustees of MIP are officers and/or directors of BlackRock or its affiliates.

6. Purchases and Sales:

For the six months ended June 30, 2015, purchases and sales of investments, including paydowns and mortgage dollar rolls and excluding short-term securities, were as follows:


	Non-U.S. Government Securities		U.S. Government Securities
Purchases	$	9,573,018,055	$	249,408,321
Sales	$	9,448,373,368	$	175,842,266

For the six months ended June 30, 2015, purchases and sales related to mortgage dollar rolls were $2,082,018,862 and $2,084,257,174, respectively.



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	55


Notes to Financial Statements (continued)		CoreAlpha Bond Master Portfolio

7. Income Tax Information:

The statutes of limitations on the Master Portfolio’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.

As of June 30, 2015, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:


Tax cost	$	3,842,810,967

Gross unrealized appreciation	$	47,488,549
Gross unrealized depreciation		(34,102,274	)

Net unrealized appreciation	$	13,386,275

8. Bank Borrowings:

MIP, on behalf of the Master Portfolio, along with certain other funds managed by the Manager and its affiliates (“Participating Funds”), is a party to a 364-day, $2.1 billion credit agreement with a group of lenders, under which the Master Portfolio may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Master Portfolio, can borrow up to an aggregate commitment amount of $1.6 billion, subject to asset coverage and other limitations as specified in the agreement. The credit agreement has the following terms: a fee of 0.06% 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 2016 unless extended or renewed. Participating Funds paid administration, legal and arrangement fees, which are included in miscellaneous expenses in the Statement of Operations, and along with commitment 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 June 30, 2015, the Master Portfolio did not borrow under the credit agreement.

9. Principal Risks:

In the normal course of business, the Master Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations, including to pay principal and interest when due (issuer credit risk). The value of securities held by the Master Portfolio may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Master Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency, interest rate and price fluctuations. Similar to issuer credit risk, the Master Portfolio may be exposed to counterparty credit risk, or the risk that an entity with which the Master Portfolio has unsettled or open transactions may fail to or be unable to perform on its commitments. The Master Portfolio 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 Master Portfolio to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Master Portfolio’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Statement of Assets and Liabilities, less any collateral held by the Master Portfolio.

The Master Portfolio invests a significant portion of its assets in securities backed by commercial or residential mortgage loans or in issuers that hold mortgage and other asset-backed securities. Investment percentages in these securities are presented in the Schedules of Investments. Changes in economic conditions, including delinquencies and/or defaults on assets underlying these securities, can affect the value, income and/or liquidity of such positions.



56	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015


Notes to Financial Statements (concluded)		CoreAlpha Bond Master Portfolio

10. Subsequent Events:



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	57


Disclosure of Investment Advisory Agreement and Sub-Advisory Agreements

The Board of Trustees of Master Investment Portfolio (the “Master Fund”) met in person on April 21, 2015 (the “April Meeting”) and May 18-20, 2015 (the “May Meeting”) to consider the approval of the investment advisory agreement (the “Advisory Agreement”) between the Master Fund, on behalf of CoreAlpha Bond Master Portfolio (the “Master Portfolio”), a series of the Master Fund, and BlackRock Advisors, LLC (the “Manager”), the Master Fund’s investment advisor. The Board of Trustees of the Master Fund also considered the approval of the sub-advisory agreement between the Manager and BlackRock Fund Advisors (“BFA”) with respect to the Master Portfolio (the “BFA Sub-Advisory Agreement”) and the sub-advisory agreement between the Manager and BlackRock International Limited (“BIL,” and together with BFA, the “Sub-Advisors”) with respect to the Master Portfolio (the “BIL Sub-Advisory Agreement,” and together with the BFA Sub-Advisory Agreement, the “Sub-Advisory Agreements”). BlackRock CoreAlpha Bond Fund (the “Portfolio”), a series of BlackRock Funds III (the “Fund”), is a “feeder” fund that invests all of its investable assets in the Master Portfolio. Accordingly, the Board of Trustees of the Fund also considered the approval of the Advisory Agreement and the Sub-Advisory Agreements with respect to the Master Portfolio. The Manager and the Sub-Advisors are referred to herein as “BlackRock.” The Advisory Agreement and the Sub-Advisory Agreements are referred to herein as the “Agreements.” For simplicity: (a) the Board of Trustees of the Master Fund and the Board of Trustees of the Fund are referred to herein collectively as the “Board,” and the members are referred to as “Board Members;” and (b) the shareholders of the Portfolio and the interest holders of the Master Portfolio are referred to as “shareholders.”

Activities and Composition of the Board

The Agreements

Pursuant to the 1940 Act, the Board is required to consider the continuation of the Agreements on an annual basis. The Board has four quarterly meetings per year, each extending over two days, a fifth one-day meeting to consider specific information surrounding the consideration of renewing the Agreements, and additional in-person and telephonic meetings as needed. In connection with this year-long deliberative process, the Board assessed, among other things, the nature, extent and quality of the services provided to the Master Portfolio and the Portfolio by BlackRock, BlackRock’s personnel and affiliates, including (as applicable) investment management services; administrative and shareholder services; the oversight of fund service providers; marketing services; risk oversight; compliance; and ability to meet applicable legal and regulatory requirements.

The Board, acting directly and through its committees, considers at each of its meetings, and from time to time as appropriate, factors that are relevant to its annual consideration of the renewal of the Agreements, including the services and support provided by BlackRock to the Master Portfolio, the Portfolio and their shareholders. Among the matters the Board considered were: (a) investment performance for one-year, three-year, five-year and/or since inception periods, as applicable, against peer funds, applicable benchmark, and performance metrics, as applicable, as well as senior management’s and portfolio managers’ analysis of the reasons for any over performance or underperformance relative to its peers, benchmark, and other performance metrics, as applicable; (b) fees, including advisory, administration, if applicable, and other amounts paid to BlackRock and its affiliates by the Master Portfolio and/or the Portfolio for services, such as marketing and distribution, call center and fund accounting; (c) the Master Portfolio’s and /or the Portfolio’s operating expenses and how BlackRock allocates expenses to the Master Portfolio and the Portfolio; (d) the resources devoted to, risk oversight of, and compliance reports relating to, implementation of the Master Portfolio’s and the Portfolio’s investment objective(s), policies and restrictions, and meeting new regulatory requirements; (e) the Master Fund’s and the Fund’s compliance with its respective compliance policies and procedures; (f) the nature, cost and character of non-investment management services provided by BlackRock and its affiliates; (g) BlackRock’s and other service providers’ internal controls and risk and compliance oversight mechanisms; (h) BlackRock’s implementation of the proxy voting policies approved by the Board; (i) execution quality of portfolio transactions; (j) BlackRock’s implementation of the Master Fund’s and/or the Fund’s valuation and liquidity procedures; (k) an analysis of management fees for products with similar investment mandates across the open-end fund, exchange-traded fund (“ETF”), closed-end fund and institutional account product channels, as applicable, and the similarities and differences between these products and the services provided as compared to the Master Portfolio and/or the Portfolio; (l) BlackRock’s compensation methodology for its investment professionals and the incentives it creates, along with investment professionals’ investments in the fund(s) they manage; and (m) periodic updates on BlackRock’s business.



58	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015


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

portfolio turnover, execution quality and use of soft dollars; BlackRock’s portfolio manager compensation and performance accountability; marketing support for the funds; services provided to the funds by BlackRock affiliates; and BlackRock’s oversight of relationships with third party service providers.

Board Considerations in Approving the Agreements

The Approval Process: Prior to the April Meeting, the Board requested and received materials specifically relating to the Agreements. The Board is continuously engaged in a process with its independent legal counsel and BlackRock to review the nature and scope of the information provided to better assist its deliberations. The materials provided in connection with the April Meeting included (a) information independently compiled and prepared by Lipper, Inc. (“Lipper”) on fees and expenses of the Master Portfolio and the Portfolio, as applicable, as compared with a peer group of funds as determined by Lipper (“Expense Peers”) and the investment performance of the Portfolio as compared with a peer group of funds as determined by Lipper¹; (b) information on the profits realized by BlackRock and its affiliates pursuant to the Agreements and a discussion of fall-out benefits to BlackRock and its affiliates; (c) a general analysis provided by BlackRock concerning investment management fees charged to other clients, such as institutional clients, sub-advised mutual funds, ETFs and closed-end funds, under similar investment mandates, as well as the performance of such other clients, as applicable; (d) review of non-management fees; (e) the existence, impact and sharing of potential economies of scale; (f) a summary of aggregate amounts paid by the Master Portfolio and/or the Portfolio to BlackRock; (g) sales and redemption data regarding the Portfolio’s shares; and (h) if applicable, a comparison of management fees to similar BlackRock open-end funds, as classified by Lipper.

At the April Meeting, the Board reviewed materials relating to its consideration of the Agreements. As a result of the discussions that occurred during the April Meeting, and as a culmination of the Board’s year-long deliberative process, the Board presented BlackRock with questions and requests for additional information. BlackRock responded to these requests with additional written information in advance of the May Meeting.

At the May Meeting, the Board of the Master Fund, including the Independent Board Members, approved the continuation of (i) the Advisory Agreement between the Manager and the Master Fund with respect to the Master Portfolio, (ii) the BFA Sub-Advisory Agreement between the Manager and BFA with respect to the Master Portfolio and (iii) the BIL Sub-Advisory Agreement between the Manager and BIL with respect to the Master Portfolio, each for a one-year term ending June 30, 2016. The Board of the Fund, including the Independent Board Members, also considered the continuation of the Agreements with respect to the Master Portfolio and found the Agreements to be satisfactory. In approving the continuation of the Agreements, the Board of the Master Fund considered: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of the Master Portfolio, the Portfolio and BlackRock; (c) the advisory fee and the cost of the services and profits to be realized by BlackRock and its affiliates from their relationship with the Master Portfolio and the Portfolio; (d) the Portfolio’s costs to investors compared to the costs of Expense Peers and performance compared to the relevant performance comparison as previously discussed; (e) the sharing of potential economies of scale; (f) fall-out benefits to BlackRock and its affiliates as a result of its relationship with the Master Portfolio and the Portfolio; and (g) other factors deemed relevant by the Board Members.

Funds are ranked by Lipper in quartiles, ranging from first to fourth, where first is the most desirable quartile position and fourth is the least desirable.



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	59


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

necessary for the operations of the Master Portfolio and the Portfolio. In particular, BlackRock and its affiliates provide the Master Portfolio and the Portfolio with the following administrative services, including, among others: (i) preparing disclosure documents, such as the prospectus, the summary prospectus (as applicable), the statement of additional information and periodic shareholder reports; (ii) oversight of daily accounting and pricing; (iii) overseeing and coordinating the activities of other service providers; (iv) organizing Board meetings and preparing the materials for such Board meetings; (v) providing legal and compliance support; (vi) furnishing analytical and other support to assist the Board in its consideration of strategic issues such as the merger, consolidation or repurposing of certain open-end funds; and (vii) performing other administrative functions necessary for the operation of the Master Portfolio and the Portfolio, such as tax reporting, fulfilling regulatory filing requirements and call center services. The Board reviewed the structure and duties of BlackRock’s fund administration, shareholder services, legal and compliance departments and considered BlackRock’s policies and procedures for assuring compliance with applicable laws and regulations.

B. The Investment Performance of the Master Portfolio, the Portfolio and BlackRock: The Board, including the Independent Board Members, also reviewed and considered the performance history of the Master Portfolio and the Portfolio, as applicable. The Board noted that the Portfolio’s investment results correspond directly to the investment results of the Master Portfolio. In preparation for the April Meeting, the Board worked with its independent legal counsel, BlackRock and Lipper to develop a template for, and was provided with, reports independently prepared by Lipper, which included a comprehensive analysis of the Portfolio’s performance. The Board also reviewed a narrative and statistical analysis of the Lipper data that was prepared by BlackRock. In connection with its review, the Board received and reviewed information regarding the investment performance of the Portfolio as compared to other funds in its applicable Lipper category. The Board was provided with a description of the methodology used by Lipper to select peer funds and periodically meets with Lipper representatives to review its methodology. The Board and its Performance Oversight and Contract Committee regularly review, and meet with Master Portfolio management to discuss, the performance of the Master Portfolio and the Portfolio, as applicable, throughout the year.

The Board noted that for the one-, three- and five-year periods reported, the Portfolio ranked in the first, third and third quartiles, respectively, against its Lipper Performance Universe. The Board noted the Portfolio’s improved performance during the one-year period. The Board and BlackRock reviewed and discussed the reasons for the Portfolio’s underperformance during the three- and five-year periods. The Board was informed that, among other things, the Portfolio underperformed over the three- and five-year periods primarily because of the diversified nature of the strategies it employs, as opposed to utilizing concentrated sector bets.

The Board and BlackRock also discussed BlackRock’s strategy for improving the Master Portfolio’s/Portfolio’s performance and BlackRock’s commitment to providing the resources necessary to assist the Master Portfolio’s portfolio managers in seeking to do so.

C. Consideration of the Advisory/Management Fees and the Cost of the Services and Profits to be Realized by BlackRock and its Affiliates from their Relationship with the Master Portfolio and the Portfolio: The Board, including the Independent Board Members, reviewed the Master Portfolio’s contractual advisory fee rate compared with the other funds in the Portfolio’s Lipper category. The contractual advisory fee rate is shown before taking into account any reimbursements or fee waivers. The Board also compared the Portfolio’s total expense ratio, as well as the Master Portfolio’s actual advisory fee rate, to those of other funds in the Portfolio’s Lipper category. The total expense ratio represents a fund’s total net operating expenses, including any 12b-1 or non-12b-1 service fees. The total expense ratio gives effect to any expense reimbursements or fee waivers that benefit a fund, and the actual advisory fee rate gives effect to any advisory fee reimbursements or waivers that benefit a fund. The Board considered the services provided and the fees charged by BlackRock and its affiliates to other types of clients with similar investment mandates, as applicable, including institutional accounts and sub-advised mutual funds.

The Board received and reviewed statements relating to BlackRock’s financial condition. The Board reviewed BlackRock’s profitability methodology and was also provided with a profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to the Master Portfolio and the Portfolio. The Board reviewed BlackRock’s profitability with respect to the Master Portfolio and the Portfolio, as applicable, and other funds the Board currently oversees for the year ended December 31, 2014 compared to available aggregate profitability data provided for the two prior years. The Board reviewed BlackRock’s profitability with respect to certain other U.S. fund complexes managed by the Manager and/or its affiliates. The Board reviewed BlackRock’s assumptions and methodology of allocating expenses in the profitability analysis, noting the inherent limitations in allocating costs among various advisory products. The Board recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, precision of expense allocations and business mix. As a result, calculating and comparing profitability at individual fund levels is difficult.



60	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015


Disclosure of Investment Advisory Agreement and Sub-Advisory Agreements (concluded)

between BlackRock and these other firms, including the contribution of technology at BlackRock, BlackRock’s expense management, and the relative product mix.

In addition, the Board considered the cost of the services provided to the Master Portfolio and the Portfolio by BlackRock, and BlackRock’s and its affiliates’ profits relating to the management and distribution of the Master Portfolio and the Portfolio and the other funds advised by BlackRock and its affiliates. As part of its analysis, the Board reviewed BlackRock’s methodology in allocating its costs to the management of the Master Portfolio and the Portfolio. The Board also considered whether BlackRock has the financial resources necessary to attract and retain high quality investment management personnel to perform its obligations under the Agreements and to continue to provide the high quality of services that is expected by the Board. The Board further considered factors including but not limited to BlackRock’s commitment of time, assumption of risk and liability profile in servicing the Master Portfolio and the Portfolio in contrast to what is required of BlackRock with respect to other products with similar investment mandates across the open-end fund, ETF, closed-end fund, sub-advised mutual fund and institutional account product channels, as applicable.

The Board noted that the Master Portfolio’s contractual advisory fee rate ranked in the first quartile, and that the actual advisory fee rate and the Portfolio’s total expense ratio ranked in the second and first quartiles, respectively, relative to the Portfolio’s Expense Peers. The Board also noted that the Master Portfolio has an advisory fee arrangement that includes breakpoints that adjust the fee rate downward as the size of the Master Portfolio increases above certain contractually specified levels. The Board further noted that BlackRock and its affiliates have contractually agreed to reimburse or otherwise compensate the Master Portfolio/Portfolio for the fees and expenses of the Independent Board Members, counsel to the Independent Board Members and the Master Portfolio’s/Portfolio’s independent registered public accounting firm.

D. Economies of Scale: The Board, including the Independent Board Members, considered the extent to which economies of scale might be realized as the assets of the Master Portfolio and the Portfolio increase, as well as the existence of expense caps, as applicable. The Board also considered the extent to which the Master Portfolio and the Portfolio benefit from such economies and whether there should be changes in the advisory fee rate or breakpoint structure in order to enable the Master Portfolio and the Portfolio to participate in these economies of scale, for example through the use of revised breakpoints in the advisory fee based upon the asset level of the Master Portfolio. In their consideration, the Board Members took into account the existence of any expense caps and further considered the continuation and/or implementation, as applicable, of such caps.

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

Conclusion

The Board of the Master Fund, including the Independent Board Members, approved the continuation of (i) the Advisory Agreement between the Manager and the Master Fund, with respect to the Master Portfolio, (ii) the BFA Sub-Advisory Agreement between the Manager and BFA with respect to the Master Portfolio and (iii) the BIL Sub-Advisory Agreement between the Manager and BIL with respect to the Master Portfolio, each for a one-year term ending June 30, 2016. Based upon its evaluation of all of the aforementioned factors in their totality, the Board of the Master Fund, including the Independent Board Members, was satisfied that the terms of the Agreements were fair and reasonable and in the best interest of the Master Portfolio and its shareholders. The Board of the Fund, including the Independent Board Members, also considered the continuation of the Agreements with respect to the Master Portfolio and found the Agreements to be satisfactory. In arriving at its decision to approve the Agreements, the Board of the Master Fund did not identify any single factor or group of factors as all-important or controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were also assisted by the advice of independent legal counsel in making this determination. The contractual fee arrangements for the Master Portfolio reflect the results of several years of review by the Board Members and predecessor Board Members, and discussions between such Board Members (and predecessor Board Members) and BlackRock. As a result, the Board Members’ conclusions may be based in part on their consideration of these arrangements in prior years.



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	61


Officers and Trustees

Rodney D. Johnson, Chair of the Board and Trustee

David O. Beim, Trustee

Collette Chilton, Trustee

Frank J. Fabozzi, Trustee

Dr. Matina S. Horner, Trustee

Herbert I. London, Trustee

Cynthia A. Montgomery, Trustee

Barbara G. Novick, Trustee

Joseph P. Platt, Trustee

Robert C. Robb, Jr., Trustee

Toby Rosenblatt, Trustee

Mark Stalnecker, Trustee

Kenneth L. Urish, Trustee

Frederick W. Winter, Trustee

John M. Perlowski, President and Chief Executive Officer

Richard Hoerner, CFA, Vice President

Jennifer McGovern, Vice President

Neal Andrews, Chief Financial Officer

Jay Fife, Treasurer

Charles Park, Chief Compliance Officer

Fernanda Piedra, Anti-Money Laundering Compliance Officer

Benjamin Archibald, Secretary

Effective March 1, 2015, Charles Park resigned as Anti-Money Laundering Compliance Officer of the Trust/MIP and Fernanda Piedra became Anti-Money Laundering Compliance Officer of the Trust/MIP.

Effective May 18, 2015, Ian MacKinnon resigned as a Trustee of the Trust/MIP.



62	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015


Additional Information

General Information

Householding

Availability of Quarterly Schedule of Investments

The Fund/Master Portfolio files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s/Master Portfolio’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The Fund’s/Master Portfolio’s Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762.

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the Fund/Master Portfolio uses to determine how to vote proxies relating to portfolio securities is available upon request and without charge (1) by calling (800) 441-7762; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.

Availability of Proxy Voting Record

Information about how the Fund/Master Portfolio voted proxies relating to securities held in the Fund’s/Master Portfolio’s portfolio during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com or by calling (800) 441-7762 and (2) on the SEC’s website at http://www.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 http://www.blackrock.com for more information.

Shareholder Privileges

Account Information

Automatic Investment Plans

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

Systematic Withdrawal Plans

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

Retirement Plans

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



BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015	63


Additional Information (concluded)

BlackRock Privacy Principles



64	BLACKROCK COREALPHA BOND FUND	JUNE 30, 2015

LOGO


CAB-6/15-SAR

JUNE 30, 2015

SEMI-ANNUAL REPORT (UNAUDITED)

BlackRock Funds III

^Ø	BlackRock LifePath^® 2025 Fund

^Ø	BlackRock LifePath^® 2035 Fund

^Ø	BlackRock LifePath^® 2045 Fund

^Ø	BlackRock LifePath^® 2055 Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee


Table of Contents


	Page
The Markets in Review		3
Semi-Annual Report:
Fund Summaries		4
About Fund Performance		14
Disclosure of Expenses		15
Fund Financial Statements:
Statements of Assets and Liabilities		16
Statements of Operations		17
Statements of Changes in Net Assets		18
Fund Financial Highlights		20
Fund Notes to Financial Statements		40
Master Portfolio Information		45
Master Portfolio Financial Statements:
Schedules of Investments		47
Statements of Assets and Liabilities		55
Statements of Operations		56
Statements of Changes in Net Assets		57
Master Portfolio Financial Highlights		58
Master Portfolio Notes to Financial Statements		62
Disclosure of Investment Advisory Agreement		66
Officers and Trustees		71
Additional Information		72

LOGO



2	BLACKROCK FUNDS III	JUNE 30, 2015

The Markets in Review

Dear Shareholder,

Sincerely,

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

LOGO

Rob Kapito

President, BlackRock Advisors, LLC


Total Returns as of June 30, 2015
	6-month			12-month
U.S. large cap equities (S&P 500^® Index)		1.23	%		7.42	%
U.S. small cap equities (Russell 2000^® Index)		4.75			6.49
International equities (MSCI Europe, Australasia, Far East Index)		5.52			(4.22	)
Emerging market equities (MSCI Emerging Markets Index)		2.95			(5.12	)
3-month Treasury bills (BofA Merrill Lynch 3-Month U.S. Treasury Bill Index)		0.01			0.02
U.S. Treasury securities (BofA Merrill Lynch 10-Year U.S. Treasury Index)		(0.51	)		3.79
U.S. investment-grade bonds (Barclays U.S. Aggregate Bond Index)		(0.10	)		1.86
Tax-exempt municipal bonds (S&P Municipal Bond Index)		0.01			3.00
U.S. high yield bonds (Barclays U.S. Corporate High Yield 2% Issuer Capped Index)		2.53			(0.39	)
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.



		THIS PAGE NOT PART OF YOUR FUND REPORT				3


Fund Summary as of June 30, 2015				BlackRock LifePath Funds

Fund Management Commentary

How did each Fund perform?

•

The LifePath Funds with target dates of 2025, 2035, 2045 and 2055 (together, the “LifePath Funds”) invest in their respective LifePath Master Portfolio.

•

For the six-month period ended June 30, 2015, the LifePath Funds underperformed the custom benchmark across various LifePath Fund target dates, with the exception of LifePath 2025 Class K Shares and LifePath 2055 Investor A, which performed in line with the custom benchmark, and LifePath 2045 and LifePath 2055 Funds’ Institutional and Class K Shares and LifePath 2035 Class K, which outperformed the custom benchmark. The returns for the LifePath Funds include Fund expenses. The custom benchmarks have no expenses associated with performance.

What factors influenced performance?

•

Equity markets outperformed fixed income markets during the period. As a result, the LifePath Funds with longer time horizons (2045 and 2055) generated higher returns on an absolute basis given their larger allocations to equity investments.

•

In addition, many of the underlying active strategies held within the LifePath Funds provided strong performance. One of the largest contributors to positive performance was the LifePath Funds’ investment in the International Tilts Master Portfolio, which outperformed in the first half of 2015 due to strong regional stock selection in Japan and Europe. In addition, a long position in Japan was a strong contributor to outperformance. A focus within Europe on companies with strong value and quality charac teristics was also rewarded with strong performance.

•

Conversely, the LifePath Funds’ investment in the Commodity Strategies Fund detracted from performance, as did its investment in the Emerging Markets Fund. Energy equities and exposure to mining stocks were the largest detractors from Commodity Strategies Fund’s performance as the mining sector was the worst-performing equity sector. Mining stocks were negatively impacted by weaker economic data from China. The Emerging Markets Fund’s underperformance was driven by overweights in markets and sectors with higher correlations to developed markets that generated slower growth during the first half of 2015. Stock selection in China also detracted as the Chinese stock market sold off in June, with the largest negative impact on the high quality, high risk/return, and domestic cyclical stocks preferred by the manager.

Describe recent Fund activity.

•

Each LifePath Fund has its own time horizon, which affects its acceptable level of risk and, in turn, the strategic allocation of its holdings across asset classes. On a quarterly basis, the strategic allocation of each LifePath Fund is systematically adjusted to reflect the shareholders’ remaining investment time horizon. During the period, the LifePath Funds were rebalanced in accordance with their updated strategic allocations, and daily cash flows were allocated to the underlying funds and instruments as appropriate.

Describe Fund positioning at period end.

•

At period end, each of the LifePath Funds was invested according to its respective strategic allocation benchmark within tolerance limits.



4	BLACKROCK FUNDS III	JUNE 30, 2015


		BlackRock LifePath Funds

Glide Path Evolution

Under normal circumstances, the asset allocation of each LifePath Fund will change over time according to a “glide path” as each LifePath Fund approaches its respective target date. The glide path represents the shifting of asset classes over time. Each LifePath Fund’s asset mix becomes more conservative prior to retirement as time elapses. This reflects the need for reduced investment risks as retirement approaches and the need for lower volatility of each LifePath Fund, which may be a primary source of income after retirement. As each LifePath Fund approaches its target date, its asset allocation will shift so that each LifePath Fund invests a greater percentage of its assets in fixed income funds. The asset allocation targets are established by a committee of BlackRock investment professionals that includes the portfolio managers. The investment team, including the portfolio managers and this investment committee, meets regularly to assess market conditions, review the asset allocation targets of each LifePath Fund, and determine whether any changes are required to enable each LifePath Fund to achieve its investment objective.

Although the asset allocation targets listed for the glide path are general, long-term targets, BlackRock investment professionals may periodically adjust the proportion of equity and fixed income funds in each LifePath Fund, based on an assessment of the current market conditions, the potential contribution of each asset class to the expected risk and return characteristics of each LifePath Fund, reallocations of each LifePath Fund’s composition to reflect intra-year movement along the glide path and other factors. In general, such adjustments will be limited, however, BlackRock investment professionals may determine that a greater degree of variation is warranted to protect each LifePath Fund or achieve each LifePath Fund’s investment objective.



BLACKROCK FUNDS III	JUNE 30, 2015	5


				BlackRock LifePath 2025 Fund

Investment Objective

The investment objective of BlackRock LifePath^® 2025 Fund (“LifePath 2025 Fund” or the “LifePath Fund”) is to seek to provide for retirement outcomes based on quantitatively measured risk. In pursuit of this objective, LifePath 2025 Fund will be broadly diversified across global asset classes, with asset allocations becoming more conservative over time.

Effective March 31, 2015, the LifePath^® 2025 Portfolio changed its name to the BlackRock LifePath^® 2025 Fund.

Total Return Based on a $10,000 Investment

LOGO

Assuming maximum sales charges, transaction costs and other operating expenses, including advisory fees, if any. Institutional Shares do not have a sales charge.

The LifePath Fund compares its performance to that of a customized weighted index (the “LifePath 2025 Fund Custom Benchmark”), comprised of the indexes indicated below, which reflects the investment advisor’s changes to the benchmark’s weightings over time. The investment advisor adjusts the weightings of these indexes periodically based upon its evaluation and adjustment of the LifePath Fund’s asset allocation strategy. The weightings are presented annually but they are adjusted quarterly.

Commencement of operations.

LifePath Fund’s custom benchmark consists of the following:


Period	Barclays U.S. Aggregate Bond Index			Barclays U.S. Treasury Inflation Protected Securities (TIPS) Index			Bloomberg Commodity Index⁴			FTSE EPRA/NAREIT Developed Real Estate Index			MSCI ACWI ex- USA IMI Index			Russell 1000^® Index			Russell 2000^® Index			S&P MidCap 400^® Index			S&P 500^® Index			S&P SmallCap 600^® Index
7/01/10 to 6/30/11		28.9	%		4.5	%		N/A			4.9	%		18.8	%		N/A			N/A			5.9	%		34.4	%		2.6	%
7/01/11 to 6/30/12		30.8			4.8			N/A			4.8			18.7			34.3	%		3.1	%		0.5			2.8			0.2
7/01/12 to 6/30/13		32.9			5.1			2.9	%		4.5			17.4			34.0			3.2			N/A			N/A			N/A
7/01/13 to 6/30/14		34.6			5.4			3.8			4.3			16.9			31.6			3.4			N/A			N/A			N/A
7/01/14 to 6/30/15		32.5			5.1			3.8			4.9			18.1			32.5			3.0			N/A			N/A			N/A

⁴

Prior to July 1, 2014, the Bloomberg Commodity Index was known as the Dow Jones-UBS Commodity Index.

See “About Fund Performance” on page 14 for descriptions of the indexes.



6	BLACKROCK FUNDS III	JUNE 30, 2015


		BlackRock LifePath 2025 Fund

Performance Summary for the Period Ended June 30, 2015


				Average Annual Total Returns
				1 Year						5 Year						Since Inception¹
	6-Month Total Returns			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge
Institutional		1.30	%		1.21	%		N/A			9.53	%		N/A			9.52	%		N/A
Investor A		1.20			0.94			(4.36	)%		9.25			8.07	%		9.24			8.07	%
Investor C		0.80			0.17			(0.77	)		8.42			8.42			8.42			8.42
Class K		1.43			1.48			N/A			9.73			N/A			9.73			N/A
Class R		1.10			0.71			N/A			8.98			N/A			8.98			N/A
LifePath 2025 Fund Custom Benchmark		1.43			1.24			N/A			9.74			N/A			9.74			N/A
Barclays U.S. Aggregate Bond Index		(0.10	)		1.86			N/A			3.35			N/A			3.35			N/A
Barclays U.S. TIPS Index		0.34			(1.73	)		N/A			3.29			N/A			3.29			N/A
Bloomberg Commodity Index		(1.56	)		(23.71	)		N/A			(3.91	)		N/A			(3.91	)		N/A
FTSE EPRA/NAREIT Developed Real Estate Index		(3.20	)		(0.36	)		N/A			11.58			N/A			11.58			N/A
MSCI ACWI ex-USA IMI Index		4.59			(4.97	)		N/A			8.00			N/A			8.00			N/A
Russell 1000^® Index		1.71			7.37			N/A			17.58			N/A			17.58			N/A
Russell 2000^® Index		4.75			6.49			N/A			17.08			N/A			17.08			N/A

The LifePath Fund commenced operations on June 30, 2010.

Past performance is not indicative of future results.

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



BLACKROCK FUNDS III	JUNE 30, 2015	7


				BlackRock LifePath 2035 Fund

Investment Objective

The investment objective of BlackRock LifePath^® 2035 Fund (“LifePath 2035 Fund” or the “LifePath Fund”) is to seek to provide for retirement outcomes based on quantitatively measured risk. In pursuit of this objective, LifePath 2035 Fund will be broadly diversified across global asset classes, with asset allocations becoming more conservative over time.

Effective March 31, 2015, the LifePath^® 2035 Portfolio changed its name to the BlackRock LifePath^® 2035 Fund.

Total Return Based on a $10,000 Investment

LOGO

Assuming maximum sales charges, transaction costs and other operating expenses, including advisory fees, if any. Institutional Shares do not have a sales charge.

The LifePath Fund compares its performance to that of a customized weighted index (the “LifePath 2035 Fund Custom Benchmark”), comprised of the indexes indicated below, which reflects the investment advisor’s changes to the benchmark’s weightings over time. The investment advisor adjusts the weightings of these indexes periodically based upon its evaluation and adjustment of the LifePath Fund’s asset allocation strategy. The weightings are presented annually but they are adjusted quarterly.

Commencement of operations.

The LifePath Fund’s custom benchmark consists of the following:


Period	Barclays U.S. Aggregate Bond Index			Barclays U.S. Treasury Inflation Protected Securities (TIPS) Index			Bloomberg Commodity Index⁴			FTSE EPRA/NAREIT Developed Real Estate Index			MSCI ACWI ex- USA IMI Index			Russell 1000^® Index			Russell 2000^® Index			S&P MidCap 400^® Index			S&P 500^® Index			S&P SmallCap 600^® Index
7/01/10 to 6/30/11		17.0	%		2.2	%		N/A			6.9	%		22.7	%		N/A			N/A			6.4	%		42.0	%		2.8	%
7/01/11 to 6/30/12		18.9			2.5			N/A			7.1			22.6			42.1	%		2.7	%		0.5			3.4			0.2
7/01/12 to 6/30/13		21.3			2.8			2.9	%		7.0			21.5			41.9			2.6			N/A			N/A			N/A
7/01/13 to 6/30/14		23.0			3.0			3.9			7.0			21.3			39.2			2.6			N/A			N/A			N/A
7/01/14 to 6/30/15		17.2			2.3			3.9			8.7			23.8			41.8			2.3			N/A			N/A			N/A

⁴

Prior to July 1, 2014, the Bloomberg Commodity Index was known as the Dow Jones-UBS Commodity Index.

See “About Fund Performance” on page 14 for descriptions of the indexes.



8	BLACKROCK FUNDS III	JUNE 30, 2015


		BlackRock LifePath 2035 Fund

Performance Summary for the Period Ended June 30, 2015


				Average Annual Total Returns
				1 Year						5 Year						Since Inception¹
	6-Month Total Returns			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge
Institutional		1.65	%		1.47	%		N/A			10.95	%		N/A			10.94	%		N/A
Investor A		1.55			1.20			(4.12	)%		10.67			9.48	%		10.66			9.48	%
Investor C		1.12			0.40			(0.53	)		9.83			9.83			9.82			9.82
Class K		1.89			1.73			N/A			11.45			N/A			11.44			N/A
Class R		1.45			0.96			N/A			10.41			N/A			10.40			N/A
LifePath 2035 Fund Custom Benchmark		1.71			1.33			N/A			11.14			N/A			11.14			N/A
Barclays U.S. Aggregate Bond Index		(0.10	)		1.86			N/A			3.35			N/A			3.35			N/A
Barclays U.S. TIPS Index		0.34			(1.73	)		N/A			3.29			N/A			3.29			N/A
Bloomberg Commodity Index		(1.56	)		(23.71	)		N/A			(3.91	)		N/A			(3.91	)		N/A
FTSE EPRA/NAREIT Developed Real Estate Index		(3.20	)		(0.36	)		N/A			11.58			N/A			11.58			N/A
MSCI ACWI ex-USA IMI Index		4.59			(4.97	)		N/A			8.00			N/A			8.00			N/A
Russell 1000^® Index		1.71			7.37			N/A			17.58			N/A			17.58			N/A
Russell 2000^® Index		4.75			6.49			N/A			17.08			N/A			17.08			N/A

The LifePath Fund commenced operations on June 30, 2010.

Past performance is not indicative of future results.

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



BLACKROCK FUNDS III	JUNE 30, 2015	9


				BlackRock LifePath 2045 Fund

Investment Objective

The investment objective of BlackRock LifePath^® 2045 Fund (“LifePath 2045 Fund” or the “LifePath Fund”) is to seek to provide for retirement outcomes based on quantitatively measured risk. In pursuit of this objective, LifePath 2045 Fund will be broadly diversified across global asset classes, with asset allocations becoming more conservative over time.

Effective March 31, 2015, the LifePath^® 2045 Portfolio changed its name to the BlackRock LifePath^® 2045 Fund.

Total Return Based on a $10,000 Investment

LOGO

Assuming maximum sales charges, transaction costs and other operating expenses, including advisory fees, if any. Institutional Shares do not have a sales charge.

The LifePath Fund compares its performance to that of a customized weighted index (the “LifePath 2045 Fund Custom Benchmark”), comprised of the indexes indicated below, which reflects the investment advisor’s changes to the benchmark’s weightings over time. The investment advisor adjusts the weightings of these indexes periodically based upon its evaluation and adjustment of the LifePath Fund’s asset allocation strategy. The weightings are presented annually but they are adjusted quarterly.

Commencement of operations.

The LifePath Fund’s custom benchmark consists of the following:


Period	Barclays U.S. Aggregate Bond Index			Bloomberg Commodity Index⁴			FTSE EPRA/NAREIT Developed Real Estate Index			MSCI ACWI ex- USA IMI Index			Russell 1000^® Index			Russell 2000^® Index			S&P MidCap 400^® Index			S&P 500^® Index			S&P SmallCap 600^® Index
7/01/10 to 6/30/11		7.3	%		N/A			8.5	%		26.0	%		N/A			N/A			6.8	%		48.4	%		3.0	%
7/01/11 to 6/30/12		9.5			N/A			9.1			25.8			48.6	%		2.3	%		0.6			3.9			0.2
7/01/12 to 6/30/13		12.4			3.0	%		9.1			24.9			48.5			2.1			N/A			N/A			N/A
7/01/13 to 6/30/14		14.5			3.9			9.3			24.9			45.4			2.0			N/A			N/A			N/A
7/01/14 to 6/30/15		7.2			4.1			11.6			27.7			47.3			2.1			N/A			N/A			N/A

⁴

Prior to July 1, 2014, the Bloomberg Commodity Index was known as the Dow Jones-UBS Commodity Index.

See “About Fund Performance” on page 14 for descriptions of the indexes.



10	BLACKROCK FUNDS III	JUNE 30, 2015


		BlackRock LifePath 2045 Fund

Performance Summary for the Period Ended June 30, 2015


				Average Annual Total Returns
				1 Year						5 Year						Since Inception¹
	6-Month Total Returns			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge
Institutional		1.89	%		1.54	%		N/A			12.22	%		N/A			12.21	%		N/A
Investor A		1.78			1.26			(4.06	)%		11.95			10.75	%		11.94			10.74	%
Investor C		1.32			0.46			(0.48	)		11.09			11.09			11.08			11.08
Class K		2.06			1.70			N/A			12.60			N/A			12.60			N/A
Class R		1.69			1.03			N/A			11.66			N/A			11.66			N/A
LifePath 2045 Fund Custom Benchmark		1.86			1.40			N/A			12.30			N/A			12.30			N/A
Barclays U.S. Aggregate Bond Index		(0.10	)		1.86			N/A			3.35			N/A			3.35			N/A
Bloomberg Commodity Index		(1.56	)		(23.71	)		N/A			(3.91	)		N/A			(3.91	)		N/A
FTSE EPRA/NAREIT Developed Real Estate Index		(3.20	)		(0.36	)		N/A			11.58			N/A			11.58			N/A
MSCI ACWI ex-USA IMI Index		4.59			(4.97	)		N/A			8.00			N/A			8.00			N/A
Russell 1000^® Index		1.71			7.37			N/A			17.58			N/A			17.58			N/A
Russell 2000^® Index		4.75			6.49			N/A			17.08			N/A			17.08			N/A

The LifePath Fund commenced operations on June 30, 2010.

Past performance is not indicative of future results.

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



BLACKROCK FUNDS III	JUNE 30, 2015	11


				BlackRock LifePath 2055 Fund

Investment Objective

The investment objective of BlackRock LifePath^® 2055 Fund (“LifePath 2055 Fund” or the “LifePath Fund”) is to seek to provide for retirement outcomes based on quantitatively measured risk. In pursuit of this objective, LifePath 2055 Fund will be broadly diversified across global asset classes, with asset allocations becoming more conservative over time.

Effective March 31, 2015, the LifePath^® 2055 Portfolio changed its name to the BlackRock LifePath^® 2055 Fund.

Total Return Based on a $10,000 Investment

LOGO

Assuming maximum sales charges, transaction costs and other operating expenses, including advisory fees, if any. Institutional Shares do not have a sales charge.

The LifePath Fund compares its performance to that of a customized weighted index (the “LifePath 2055 Fund Custom Benchmark”), comprised of the indexes indicated below, which reflects the investment advisor’s changes to the benchmark’s weightings over time. The investment advisor adjusts the weightings of these indexes periodically based upon its evaluation and adjustment of the LifePath Fund’s asset allocation strategy. The weightings are presented annually but they are adjusted quarterly.

Commencement of operations.

The LifePath Fund’s custom benchmark consists of the following:


Period	Barclays U.S. Aggregate Bond Index			Bloomberg Commodity Index⁴			FTSE EPRA/NAREIT Developed Real Estate Index			MSCI ACWI ex- USA IMI Index			Russell 1000^® Index			Russell 2000^® Index			S&P MidCap 400^® Index			S&P 500^® Index			S&P SmallCap 600^® Index
7/01/10 to 6/30/11		1.0	%		N/A			9.2	%		28.4	%		N/A			N/A			8.3	%		49.5	%		3.6	%
7/01/11 to 6/30/12		1.0			N/A			10.6			29.0			50.1	%		4.2	%		0.7			4.1			0.3
7/01/12 to 6/30/13		2.0			3.1	%		11.3			27.9			53.8			1.9			N/A			N/A			N/A
7/01/13 to 6/30/14		4.1			4.0			11.8			28.1			50.3			1.7			N/A			N/A			N/A
7/01/14 to 6/30/15		2.6			4.1			12.8			29.2			49.3			2.0			N/A			N/A			N/A

⁴

Prior to July 1, 2014, the Bloomberg Commodity Index was known as the Dow Jones-UBS Commodity Index.

See “About Fund Performance” on page 14 for descriptions of the indexes.



12	BLACKROCK FUNDS III	JUNE 30, 2015


		BlackRock LifePath 2055 Fund

Performance Summary for the Period Ended June 30, 2015


				Average Annual Total Returns
				1 Year						5 Year						Since Inception¹
	6-Month Total Returns			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge
Institutional		1.91	%		1.50	%		N/A			12.88	%		N/A			12.88	%		N/A
Investor A		1.82			1.28			(4.03	)%		12.58			11.37	%		12.57			11.37	%
Investor C		1.34			0.44			(0.50	)		11.74			11.74			11.74			11.74
Class K		2.07			1.81			N/A			13.33			N/A			13.32			N/A
Class R		1.60			0.99			N/A			12.29			N/A			12.29			N/A
LifePath 2055 Fund Custom Benchmark		1.87			1.32			N/A			13.07			N/A			13.07			N/A
Barclays U.S. Aggregate Bond Index		(0.10	)		1.86			N/A			3.35			N/A			3.35			N/A
Bloomberg Commodity Index		(1.56	)		(23.71	)		N/A			(3.91	)		N/A			(3.91	)		N/A
FTSE EPRA/NAREIT Developed Real Estate Index		(3.20	)		(0.36	)		N/A			11.58			N/A			11.58			N/A
MSCI ACWI ex-USA IMI Index		4.59			(4.97	)		N/A			8.00			N/A			8.00			N/A
Russell 1000^® Index		1.71			7.37			N/A			17.58			N/A			17.58			N/A
Russell 2000^® Index		4.75			6.49			N/A			17.08			N/A			17.08			N/A

The LifePath Fund commenced operations on June 30, 2010.

Past performance is not indicative of future results.

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



BLACKROCK FUNDS III	JUNE 30, 2015	13


About Fund Performance		LifePath Funds

•

Institutional 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.

•

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.

•

BlackRock Advisors, LLC (“BAL” or the “Administrator”), each LifePath Funds’ administrator, waived and/or reimbursed a portion of each LifePath Fund’s expenses. Without such waiver, each LifePath Fund’s performance would have been lower.

The LifePath Funds’ custom benchmarks are hypothetical representations of the performance of the respective LifePath Fund’s asset classes according to their weightings as of the most recent quarter-end. The weightings of the various indexes that are included in the LifePath Funds’ custom benchmarks are adjusted quarterly to reflect the LifePath Funds’ changing asset allocations over time. As of June 30, 2015, the following indexes are used to calculate the LifePath Funds’ custom benchmarks: Barclays U.S. Aggregate Bond Index, Barclays U.S. TIPS Index, Bloomberg Commodity Index, FTSE EPRA/NAREIT Developed Real Estate Index, MSCI ACWI ex-USA IMI Index, Russell 1000^® Index and Russell 2000^® Index.

The Barclays U.S. Aggregate Bond Index is a widely recognized unmanaged market-weighted index, comprised of investment-grade corporate bonds rated BBB or better, mortgages and U.S. Treasury and U.S. Government agency issues with at least one year to maturity. The Barclays U.S. TIPS Index is an unmanaged index that measures the performance of the inflation-protected public obligations of the U.S. Treasury. The Bloomberg Commodity Index is a broadly diversified index that allows investors to track commodity futures through a single, simple measure. The FTSE EPRA/NAREIT Developed Real Estate Index is a global market capitalization weighted index composed of listed real estate securities from developed market countries in North America, Europe and Asia. The MSCI ACWI ex-USA IMI Index is a free float-adjusted market capitalization weighted index that measures the equity market performance of the developed (excluding the U.S.) and emerging investable market universe. The Russell 1000^® Index is an index that measures the performance of the large cap segment of the U.S. equity universe. It is a subset of the Russell 3000^® Index and includes approximately 1,000 of the largest securities based on a combination of their market capitalization and current index membership. The index represents approximately 92% of the total market capitalization of the Russell 3000^® Index. The Russell 2000^® Index is an unmanaged index that is a subset of the Russell 3000^® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.



14	BLACKROCK FUNDS III	JUNE 30, 2015


Disclosure of Expenses

Shareholders of each LifePath Fund may incur the following charges: (a) transactional expenses, such as sales charges; and (b) operating expenses, including administration fees, service and distribution fees, including 12b-1 fees, and other fund expenses. The expense examples shown below (which are based on a hypothetical investment of $1,000 invested on January 1, 2015 and held through June 30, 2015) are intended to assist shareholders both in calculating expenses based on an investment in a LifePath Fund and in comparing these expenses with similar costs of investing in other mutual funds.

The expense examples provide information about actual account values and actual expenses. 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 LifePath Fund and their share class under the heading entitled “Expenses Paid During the Period.”

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

Expense Examples


	Actual						Hypothetical²
	Beginning Account Value January 1, 2015		Ending Account Value June 30, 2015		Expenses Paid During the Period¹		Beginning Account Value January 1, 2015		Ending Account Value June 30, 2015		Expenses Paid During the Period¹		Annualized Expense Ratio
LifePath 2025 Fund
Institutional	$	1,000.00	$	1,013.00	$	3.59	$	1,000.00	$	1,021.22	$	3.61		0.72	%
Investor A	$	1,000.00	$	1,012.00	$	4.89	$	1,000.00	$	1,019.93	$	4.91		0.98	%
Investor C	$	1,000.00	$	1,008.00	$	8.61	$	1,000.00	$	1,016.22	$	8.65		1.73	%
Class K	$	1,000.00	$	1,014.30	$	1.85	$	1,000.00	$	1,022.96	$	1.86		0.37	%
Class R	$	1,000.00	$	1,011.00	$	6.08	$	1,000.00	$	1,018.74	$	6.11		1.22	%
LifePath 2035 Fund
Institutional	$	1,000.00	$	1,016.50	$	3.45	$	1,000.00	$	1,021.37	$	3.46		0.69	%
Investor A	$	1,000.00	$	1,015.50	$	4.70	$	1,000.00	$	1,020.13	$	4.71		0.94	%
Investor C	$	1,000.00	$	1,011.20	$	8.43	$	1,000.00	$	1,016.41	$	8.45		1.69	%
Class K	$	1,000.00	$	1,018.90	$	1.70	$	1,000.00	$	1,023.11	$	1.71		0.34	%
Class R	$	1,000.00	$	1,014.50	$	5.94	$	1,000.00	$	1,018.89	$	5.96		1.19	%
LifePath 2045 Fund
Institutional	$	1,000.00	$	1,018.90	$	3.35	$	1,000.00	$	1,021.47	$	3.36		0.67	%
Investor A	$	1,000.00	$	1,017.80	$	4.60	$	1,000.00	$	1,020.23	$	4.61		0.92	%
Investor C	$	1,000.00	$	1,013.20	$	8.34	$	1,000.00	$	1,016.51	$	8.35		1.67	%
Class K	$	1,000.00	$	1,020.60	$	1.60	$	1,000.00	$	1,023.21	$	1.61		0.32	%
Class R	$	1,000.00	$	1,016.90	$	5.85	$	1,000.00	$	1,018.99	$	5.86		1.17	%
LifePath 2055 Fund
Institutional	$	1,000.00	$	1,019.10	$	3.35	$	1,000.00	$	1,021.47	$	3.36		0.67	%
Investor A	$	1,000.00	$	1,018.20	$	4.60	$	1,000.00	$	1,020.23	$	4.61		0.92	%
Investor C	$	1,000.00	$	1,013.40	$	8.34	$	1,000.00	$	1,016.51	$	8.35		1.67	%
Class K	$	1,000.00	$	1,020.70	$	1.60	$	1,000.00	$	1,023.21	$	1.61		0.32	%
Class R	$	1,000.00	$	1,016.00	$	5.85	$	1,000.00	$	1,018.99	$	5.86		1.17	%

For each class of the LifePath Fund, expenses are equal to the annualized net expense ratio for the class, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period shown). Because each LifePath Fund invests significantly in a LifePath Master Portfolio, the expense examples reflect the net expenses of both the LifePath Fund and the LifePath Master Portfolio in which it invests.

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



BLACKROCK FUNDS III	JUNE 30, 2015	15


Statements of Assets and Liabilities		BlackRock Funds III


June 30, 2015 (Unaudited)	BlackRock LifePath 2025 Fund			BlackRock LifePath 2035 Fund			BlackRock LifePath 2045 Fund		BlackRock LifePath 2055 Fund

Assets
Investments at value — from the applicable LifePath Master Portfolio¹	$	73,701,435		$	60,894,052		$	36,136,539	$	14,845,313
Receivables:
Capital shares sold		189,272			57,694			126,862		57,261
From the administrator		—			—			—		4,464
Withdrawals from the LifePath Master Portfolio		—			141,568			—		—

Total assets		73,890,707			61,093,314			36,263,401		14,907,038


Liabilities
Payables:
Capital shares redeemed		123,491			199,262			23,421		10,836
Administration fees		19,745			14,742			4,303		—
Professional fees		8,352			8,354			8,358		8,338
Service and distribution fees		11,326			8,969			5,283		1,989
Contributions to the LifePath Master Portfolio		65,781			—			103,441		46,425
Income dividends		12,784			8,584			7,426		3,633
Capital gains distributions		29,199			15,703			16,836		5,663

Total liabilities		270,678			255,614			169,068		76,884

Net Assets	$	73,620,029		$	60,837,700		$	36,094,333	$	14,830,154


Net Assets Consist of
Paid-in capital	$	71,147,431		$	58,248,500		$	34,353,363	$	14,149,980
Undistributed (distributions in excess of) net investment income		(43,367	)		(6,695	)		8,912		5,916
Accumulated net realized gain allocated from the LifePath Master Portfolio		1,077,302			1,045,187			663,468		272,033
Net unrealized appreciation (depreciation) allocated from the LifePath Master Portfolio		1,438,663			1,550,708			1,068,590		402,225

Net Assets	$	73,620,029		$	60,837,700		$	36,094,333	$	14,830,154


Net Asset Value
Institutional:
Net assets	$	31,573,059		$	24,366,061		$	15,926,895	$	7,019,404

Shares outstanding²		2,467,469			1,809,234			1,128,934		486,908

Net asset value	$	12.80		$	13.47		$	14.11	$	14.42

Investor A:
Net assets	$	35,696,309		$	33,526,202		$	17,845,862	$	7,014,194

Shares outstanding²		2,793,379			2,492,600			1,265,807		487,567

Net asset value	$	12.78		$	13.45		$	14.10	$	14.39

Maximum offering price per share (100/94.75 of net assets)	$	13.49		$	14.20		$	14.88	$	15.19

Investor C:
Net assets	$	3,849,213		$	2,053,482		$	1,647,601	$	579,854

Shares outstanding²		302,783			153,767			118,162		40,678

Net asset value	$	12.71		$	13.35		$	13.94	$	14.25

Class K:
Net assets	$	636,769		$	166,982		$	33,531	$	31,880

Shares outstanding²		49,847			12,237			2,355		2,186

Net asset value	$	12.77		$	13.65		$	14.24	$	14.58

Class R:
Net assets	$	1,864,679		$	724,973		$	640,444	$	184,822

Shares outstanding²		145,826			53,796			45,437		12,841

Net asset value	$	12.79		$	13.48		$	14.10	$	14.39

¹Investments at cost — from the applicable LifePath Master Portfolio	$	72,262,772		$	59,343,344		$	35,067,949	$	14,443,088
² No par value, unlimited number of shares authorized.


Statements of Operations		BlackRock Funds III


Six Months Ended June 30, 2015 (Unaudited)	BlackRock LifePath 2025 Fund			BlackRock LifePath 2035 Fund			BlackRock LifePath 2045 Fund			BlackRock LifePath 2055 Fund

Investment Income
Net investment income allocated from the applicable LifePath Master Portfolio:
Dividends — affiliated	$	480,726		$	559,557		$	391,608		$	158,072
Interest — affiliated		298,309			118,662			14,210			3,969
Securities lending — affiliated — net		1,441			1,626			748			1,049
Income — affiliated		—			—			119			—
Interest — affiliated		—			84			—			33
Expenses		(212,393	)		(181,435	)		(114,369	)		(55,533	)
Fees waived		135,982			125,471			85,288			43,897

Total income		704,065			623,965			377,604			151,487


Fund Expenses
Administration — Institutional		66,627			57,230			38,303			16,843
Administration — Class A		89,887			81,990			44,124			16,085
Administration — Class C		8,779			4,642			3,831			1,301
Administration — Class K		360			98			24			24
Administration — Class R		4,623			1,612			1,415			398
Service — Investor A		44,999			41,054			22,091			8,070
Service and distribution — Investor C		17,651			9,295			7,680			2,604
Service and distribution — Class R		4,613			1,614			1,418			400
Professional		9,231			9,231			9,231			9,231
Miscellaneous		325			325			325			326

Total expenses		247,095			207,091			128,442			55,282
Less fees waived by the administrator		(9,231	)		(9,231	)		(9,231	)		(9,231	)

Total expenses after fees waived		237,864			197,860			119,211			46,051

Net investment income		466,201			426,105			258,393			105,436


Realized and Unrealized Gain (Loss) Allocated from the LifePath Master Portfolios
Net realized gain from investments, financial futures contracts, swaps and foreign currency transactions		1,454,919			1,487,334			1,002,882			421,073
Net change in unrealized appreciation (depreciation) on investments, financial futures contracts, swaps and foreign currency translations		(1,194,268	)		(1,006,046	)		(578,973	)		(277,452	)

Net realized and unrealized gain		260,651			481,288			423,909			143,621

Net Increase in Net Assets Resulting from Operations	$	726,852		$	907,393		$	682,302		$	249,057


Statements of Changes in Net Assets


	BlackRock LifePath 2025 Fund						BlackRock LifePath 2035 Fund
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014			Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	466,201		$	919,845		$	426,105		$	791,822
Net realized gain		1,454,919			3,053,636			1,487,334			2,767,003
Net change in unrealized appreciation (depreciation)		(1,194,268	)		(942,332	)		(1,006,046	)		(906,421	)

Net increase in net assets resulting from operations		726,852			3,031,149			907,393			2,652,404


Distributions to Shareholders From¹
Net investment income:
Institutional		(190,355	)		(420,027	)		(166,684	)		(381,547	)
Investor A		(232,379	)		(467,797	)		(214,424	)		(401,365	)
Investor C		(12,270	)		(16,080	)		(5,661	)		(10,392	)
Class K		(5,761	)		(11,572	)		(1,372	)		(4,870	)
Class R		(10,888	)		(19,809	)		(3,750	)		(6,233	)
Net realized gain:
Institutional		(170,644	)		(1,420,337	)		(144,980	)		(1,405,216	)
Investor A		(193,454	)		(2,069,079	)		(201,012	)		(1,927,115	)
Investor C		(20,799	)		(166,033	)		(12,318	)		(110,090	)
Class K		(3,446	)		(26,416	)		(982	)		(12,538	)
Class R		(10,091	)		(97,886	)		(4,310	)		(36,835	)

Decrease in net assets resulting from distributions to shareholders		(850,087	)		(4,715,036	)		(755,493	)		(4,296,201	)


Capital Share Transactions
Net increase in net assets derived from capital share transactions		9,947,047			6,965,153			5,100,331			11,943,495


Net Assets
Total increase in net assets		9,823,812			5,281,266			5,252,231			10,299,698
Beginning of period		63,796,217			58,514,951			55,585,469			45,285,771

End of period	$	73,620,029		$	63,796,217		$	60,837,700		$	55,585,469

Distributions in excess of net investment income, end of period	$	(43,367	)	$	(57,915	)	$	(6,695	)	$	(40,909	)

¹Distributions for annual periods determined in accordance with federal income tax regulations.


Statements of Changes in Net Assets


	BlackRock LifePath 2045 Fund						BlackRock LifePath 2055 Fund
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014			Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	258,393		$	467,866		$	105,436		$	170,531
Net realized gain		1,002,882			1,650,581			421,073			592,753
Net change in unrealized appreciation (depreciation)		(578,973	)		(522,584	)		(277,452	)		(124,640	)

Net increase in net assets resulting from operations		682,302			1,595,863			249,057			638,644


Distributions to Shareholders From¹
Net investment income:
Institutional		(109,557	)		(250,163	)		(47,074	)		(100,701	)
Investor A		(110,908	)		(207,777	)		(41,782	)		(68,668	)
Investor C		(4,885	)		(8,768	)		(1,520	)		(3,091	)
Class K		(306	)		(2,386	)		(288	)		(1,462	)
Class R		(3,341	)		(5,926	)		(953	)		(1,505	)
Net realized gain:
Institutional		(113,005	)		(982,819	)		(39,448	)		(417,600	)
Investor A		(126,230	)		(1,031,608	)		(39,514	)		(341,066	)
Investor C		(11,788	)		(94,176	)		(3,254	)		(32,641	)
Class K		(238	)		(5,442	)		(179	)		(3,653	)
Class R		(4,549	)		(33,305	)		(1,045	)		(8,089	)

Decrease in net assets resulting from distributions to shareholders		(484,807	)		(2,622,370	)		(175,057	)		(978,476	)


Capital Share Transactions
Net increase in net assets derived from capital share transactions		1,307,584			10,215,915			1,765,515			4,383,495


Net Assets
Total increase in net assets		1,505,079			9,189,408			1,839,515			4,043,663
Beginning of period		34,589,254			25,399,846			12,990,639			8,946,976

End of period	$	36,094,333		$	34,589,254		$	14,830,154		$	12,990,639

Undistributed (distributions in excess of) net investment income, end of period	$	8,912		$	(20,484	)	$	5,916		$	(7,903	)

¹ Distributions for annual periods determined in accordance with federal income tax regulations.


Financial Highlights		BlackRock LifePath 2025 Fund


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	12.80		$	13.11		$	12.19		$	11.07		$	11.21		$	10.00

Net investment income²		0.10			0.21			0.21			0.22			0.25			0.11
Net realized and unrealized gain (loss)		0.07			0.48			1.22			1.11			(0.19	)		1.63

Net increase from investment operations		0.17			0.69			1.43			1.33			0.06			1.74

Distributions from:³
Net investment income		(0.10	)		(0.21	)		(0.19	)		(0.21	)		(0.20	)		(0.11	)
Net realized gain		(0.07	)		(0.79	)		(0.32	)		(0.00	)⁴		(0.00	)⁴		(0.42	)

Total distributions		(0.17	)		(1.00	)		(0.51	)		(0.21	)		(0.20	)		(0.53	)

Net asset value, end of period	$	12.80		$	12.80		$	13.11		$	12.19		$	11.07		$	11.21


Total Return⁵
Based on net asset value		1.30%	⁶		5.23%			11.84%			12.07%			0.49%			17.40%	⁶


Ratios to Average Net Assets⁷
Total expenses		0.75%	^8,9,10		0.75%	^9,10		0.79%	^9,10		0.86%	^9,10		1.06%	^9,10		24.41%	⁸

Total expenses after fees waived and/or reimbursed		0.72%	^8,9,10		0.73%	^9,10		0.75%	^9,10		0.76%	^9,10		0.74%	^9,10		0.73%	⁸

Net investment income		1.55%	^8,9,10		1.53%	^9,10		1.60%	^9,10		1.85%	^9,10		2.25%	^9,10		1.93%	⁸


Supplemental Data
Net assets, end of period (000)	$	31,573		$	23,625		$	25,882		$	15,816		$	3,233		$	22

Portfolio turnover rate of the LifePath Master Portfolio		24%	¹¹		50%	¹¹		30%	¹¹		4%	¹²		24%	¹²		2%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the LifePath Fund’s share of its corresponding LifePath Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the period ended December 31, 2010, which include gross expenses.

⁸

Annualized.

⁹

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.40%, 0.40%, 0.40%, 0.48% and 0.82% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

¹⁰

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated expenses and/or net investment income. Excludes expenses incurred indirectly as a result of the LifePath Master Portfolio’s investments in underlying funds as follows:

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.13%

0.10%

0.12%

¹¹

Includes the LifePath Master Portfolio’s purchases and sales of the underlying funds and Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio.

¹²

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 17% and 58% for the years ended December 31, 2012 and December 31, 2011, respectively.


Financial Highlights (continued)		BlackRock LifePath 2025 Fund


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	12.78		$	13.10		$	12.19		$	11.06		$	11.21		$	10.00

Net investment income²		0.08			0.17			0.18			0.18			0.21			0.09
Net realized and unrealized gain (loss)		0.07			0.48			1.22			1.12			(0.19	)		1.63

Net increase from investment operations		0.15			0.65			1.40			1.30			0.02			1.72

Distributions from:³
Net investment income		(0.08	)		(0.18	)		(0.17	)		(0.17	)		(0.17	)		(0.09	)
Net realized gain		(0.07	)		(0.79	)		(0.32	)		(0.00	)⁴		(0.00	)⁴		(0.42	)

Total distributions		(0.15	)		(0.97	)		(0.49	)		(0.17	)		(0.17	)		(0.51	)

Net asset value, end of period	$	12.78		$	12.78		$	13.10		$	12.19		$	11.06		$	11.21


Total Return⁵
Based on net asset value		1.20%	⁶		4.95%			11.52%			11.84%			0.18%			17.26%	⁶


Ratios to Average Net Assets⁷
Total expenses		1.00%	^8,9,10		1.00%	^9,10		1.05%	^9,10		1.11%	^9,10		1.32%	^9,10		24.68%	⁸

Total expenses after fees waived and/or reimbursed		0.98%	^8,9,10		0.98%	^9,10		1.00%	^9,10		1.01%	^9,10		0.99%	^9,10		0.98%	⁸

Net investment income		1.31%	^8,9,10		1.31%	^9,10		1.37%	^9,10		1.54%	^9,10		1.87%	^9,10		1.67%	⁸


Supplemental Data
Net assets, end of period (000)	$	35,696		$	35,324		$	29,049		$	13,981		$	7,076		$	22

Portfolio turnover rate of the LifePath Master Portfolio		24%	¹¹		50%	¹¹		30%	¹¹		4%	¹²		24%	¹²		2%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

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

⁶

Aggregate total return.

⁷

⁸

Annualized.

⁹

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.40%, 0.40%, 0.40%, 0.48% and 0.86% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

¹⁰

Six Months Ended
June 30,
2015

Year Ended December 31,

(Unaudited)

2014

2013

2012

2011

Investments in underlying funds

0.13%

0.10%

0.12%

¹¹

¹²


Financial Highlights (continued)		BlackRock LifePath 2025 Fund


	Investor C
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	12.72		$	13.06		$	12.15		$	11.05		$	11.21		$	10.00

Net investment income²		0.04			0.07			0.07			0.10			0.14			0.05
Net realized and unrealized gain (loss)		0.06			0.47			1.23			1.11			(0.20	)		1.63

Net increase (decrease) from investment operations		0.10			0.54			1.30			1.21			(0.06	)		1.68

Distributions from:³
Net investment income		(0.04	)		(0.09	)		(0.07	)		(0.11	)		(0.10	)		(0.05	)
Net realized gain		(0.07	)		(0.79	)		(0.32	)		(0.00	)⁴		(0.00	)⁴		(0.42	)

Total distributions		(0.11	)		(0.88	)		(0.39	)		(0.11	)		(0.10	)		(0.47	)

Net asset value, end of period	$	12.71		$	12.72		$	13.06		$	12.15		$	11.05		$	11.21


Total Return⁵
Based on net asset value		0.80%	⁶		4.08%			10.73%			10.99%			(0.54)%			16.84%	⁶


Ratios to Average Net Assets⁷
Total expenses		1.76%	^8,9,10		1.75%	^9,10		1.80%	^9,10		1.85%	^9,10		2.10%	^9,10		25.46%	⁸

Total expenses after fees waived and/or reimbursed		1.73%	^8,9,10		1.73%	^9,10		1.76%	^9,10		1.76%	^9,10		1.75%	^9,10		1.72%	⁸

Net investment income		0.57%	^8,9,10		0.56%	^9,10		0.57%	^9,10		0.87%	^9,10		1.25%	^9,10		0.95%	⁸


Supplemental Data
Net assets, end of period (000)	$	3,849		$	2,849		$	1,997		$	992		$	245		$	22

Portfolio turnover rate of the LifePath Master Portfolio		24%	¹¹		50%	¹¹		30%	¹¹		4%	¹²		24%	¹²		2%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

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

⁶

Aggregate total return.

⁷

⁸

Annualized.

⁹

¹⁰

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.13%

0.10%

0.12%

¹¹

¹²


Financial Highlights (continued)		BlackRock LifePath 2025 Fund


	Class K
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹ to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹ to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	12.78		$	13.10		$	12.22		$	11.09		$	11.21		$	10.00

Net investment income²		0.13			0.26			0.20			0.26			0.26			0.13
Net realized and unrealized gain (loss)		0.05			0.46			1.20			1.11			(0.16	)		1.63

Net increase from investment operations		0.18			0.72			1.40			1.37			0.10			1.76

Distributions from:³
Net investment income		(0.12	)		(0.25	)		(0.20	)		(0.24	)		(0.22	)		(0.13	)
Net realized gain		(0.07	)		(0.79	)		(0.32	)		(0.00	)⁴		(0.00	)⁴		(0.42	)

Total distributions		(0.19	)		(1.04	)		(0.52	)		(0.24	)		(0.22	)		(0.55	)

Net asset value, end of period	$	12.77		$	12.78		$	13.10		$	12.22		$	11.09		$	11.21


Total Return⁵
Based on net asset value		1.43%	⁶		5.51%			11.47%			12.44%			0.87%			17.60%	⁶


Ratios to Average Net Assets⁷
Total expenses		0.40%	^8,9,10		0.40%	^9,10		0.44%	^9,10		0.51%	^9,10		0.71%	^9,10		24.05%	⁸

Total expenses after fees waived and/or reimbursed		0.37%	^8,9,10		0.37%	^9,10		0.40%	^9,10		0.41%	^9,10		0.38%	^9,10		0.38%	⁸

Net investment income		1.95%	^8,9,10		1.91%	^9,10		1.57%	^9,10		2.20%	^9,10		2.31%	^9,10		2.29%	⁸


Supplemental Data
Net assets, end of period (000)	$	637		$	317		$	102		$	1,941		$	1,590		$	22

Portfolio turnover rate of the LifePath Master Portfolio		24%	¹¹		50%	¹¹		30%	¹¹		4%	¹²		24%	¹²		2%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

⁸

Annualized.

⁹

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.40%, 0.40%, 0.40%, 0.49% and 0.89% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

¹⁰

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.13%

0.10%

0.12%

¹¹

¹²


Financial Highlights (concluded)		BlackRock LifePath 2025 Fund


	Class R
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	12.79		$	13.11		$	12.19		$	11.09		$	11.21		$	10.00

Net investment income²		0.07			0.14			0.13			0.18			0.17			0.08
Net realized and unrealized gain (loss)		0.07			0.48			1.24			1.08			(0.17	)		1.63

Net increase (decrease) from investment operations		0.14			0.62			1.37			1.26			—			1.71

Distributions from:³
Net investment income		(0.07	)		(0.15	)		(0.13	)		(0.16	)		(0.12	)		(0.08	)
Net realized gain		(0.07	)		(0.79	)		(0.32	)		(0.00	)⁴		(0.00	)⁴		(0.42	)

Total distributions		(0.14	)		(0.94	)		(0.45	)		(0.16	)		(0.12	)		(0.50	)

Net asset value, end of period	$	12.79		$	12.79		$	13.11		$	12.19		$	11.09		$	11.21


Total Return⁵
Based on net asset value		1.10%	⁶		4.69%			11.26%			11.45%			0.02%			17.12%	⁶


Ratios to Average Net Assets⁷
Total expenses		1.25%	^8,9,10		1.26%	^9,10		1.30%	^9,10		1.35%	^9,10		1.57%	^9,10		24.94%	⁸

Total expenses after fees waived and/or reimbursed		1.22%	^8,9,10		1.23%	^9,10		1.25%	^9,10		1.26%	^9,10		1.23%	^9,10		1.23%	⁸

Net investment income		1.08%	^8,9,10		1.04%	^9,10		1.05%	^9,10		1.54%	^9,10		1.46%	^9,10		1.43%	⁸


Supplemental Data
Net assets, end of period (000)	$	1,865		$	1,682		$	1,484		$	1,282		$	22		$	22

Portfolio turnover rate of the LifePath Master Portfolio		24%	¹¹		50%	¹¹		30%	¹¹		4%	¹²		24%	¹²		2%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

⁸

Annualized.

⁹

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.40%, 0.40%, 0.40%, 0.48% and 0.91% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

¹⁰

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.13%

0.10%

0.12%

¹¹

¹²


Financial Highlights		BlackRock LifePath 2035 Fund


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	13.43		$	13.77		$	12.51		$	11.18		$	11.52		$	10.00

Net investment income²		0.11			0.22			0.24			0.24			0.24			0.11
Net realized and unrealized gain (loss)		0.11			0.54			1.67			1.30			(0.39	)		1.99

Net increase (decrease) from investment operations		0.22			0.76			1.91			1.54			(0.15	)		2.10

Distributions from:³
Net investment income		(0.10	)		(0.22	)		(0.23	)		(0.21	)		(0.19	)		(0.10	)
Net realized gain		(0.08	)		(0.88	)		(0.42	)		—			(0.00	)⁴		(0.48	)
Return of capital		—			—			—			(0.00	)⁴		—			—

Total distributions		(0.18	)		(1.10	)		(0.65	)		(0.21	)		(0.19	)		(0.58	)

Net asset value, end of period	$	13.47		$	13.43		$	13.77		$	12.51		$	11.18		$	11.52


Total Return⁵
Based on net asset value		1.65%	⁶		5.51%			15.33%			13.85%			(1.32)%			20.96%	⁶


Ratios to Average Net Assets⁷
Total expenses		0.72%	^8,9,10		0.74%	^9,10		0.80%	^9,10		0.89%	^9,10		1.22%	^9,10		24.07%	⁸

Total expenses after fees waived and/or reimbursed		0.69%	^8,9,10		0.71%	^9,10		0.75%	^9,10		0.75%	^9,10		0.72%	^9,10		0.71%	⁸

Net investment income		1.63%	^8,9,10		1.55%	^9,10		1.78%	^9,10		1.98%	^9,10		2.13%	^9,10		1.88%	⁸


Supplemental Data
Net assets, end of period (000)	$	24,366		$	22,004		$	22,266		$	12,853		$	2,033		$	23

Portfolio turnover rate of the LifePath Master Portfolio		18%	¹¹		54%	¹¹		39%	¹¹		4%	¹²		21%	¹²		1%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

⁸

Annualized.

⁹

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.43%, 0.43%, 0.43%, 0.56% and 1.10% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

¹⁰


	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011

Investments in underlying funds		0.16	%		0.15	%		0.11	%		0.11	%		0.14	%

¹¹

¹²

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 13% and 47% for the years ended December 31, 2012 and December 31, 2011, respectively.


Financial Highlights (continued)		BlackRock LifePath 2035 Fund


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹ to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹ to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	13.41		$	13.77		$	12.51		$	11.17		$	11.51		$	10.00

Net investment income²		0.10			0.19			0.21			0.20			0.20			0.10
Net realized and unrealized gain (loss)		0.11			0.52			1.67			1.32			(0.37	)		1.98

Net increase (decrease) from investment operations		0.21			0.71			1.88			1.52			(0.17	)		2.08

Distributions from:³
Net investment income		(0.09	)		(0.19	)		(0.20	)		(0.18	)		(0.17	)		(0.09	)
Net realized gain		(0.08	)		(0.88	)		(0.42	)		—			(0.00	)⁴		(0.48	)
Return of capital		—			—			—			(0.00	)⁴		—			—

Total distributions		(0.17	)		(1.07	)		(0.62	)		(0.18	)		(0.17	)		(0.57	)

Net asset value, end of period	$	13.45		$	13.41		$	13.77		$	12.51		$	11.17		$	11.51


Total Return⁵
Based on net asset value		1.55%	⁶		5.17%			15.08%			13.63%			(1.55)%			20.74%	⁶


Ratios to Average Net Assets⁷
Total expenses		0.98%	^8,9,10		0.99%	^9,10		1.05%	^9,10		1.14%	^9,10		1.48%	^9,10		22.59%	⁸

Total expenses after fees waived and/or reimbursed		0.94%	^8,9,10		0.96%	^9,10		1.00%	^9,10		1.00%	^9,10		0.97%	^9,10		0.96%	⁸

Net investment income		1.39%	^8,9,10		1.65%	^9,10		1.55%	^9,10		1.63%	^9,10		1.77%	^9,10		1.71%	⁸


Supplemental Data
Net assets, end of period (000)	$	33,526		$	31,048		$	21,423		$	9,966		$	4,121		$	27

Portfolio turnover rate of the LifePath Master Portfolio		18%	¹¹		54%	¹¹		39%	¹¹		4%	¹²		21%	¹²		1%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

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

⁶

Aggregate total return.

⁷

⁸

Annualized.

⁹

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.43%, 0.43%, 0.43%, 0.56% and 1.15% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

¹⁰

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.16%

0.15%

0.11%

0.14%

¹¹

¹²

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 13% and 47% for the years ended December 31, 2012 and December 31, 2011, respectively.


Financial Highlights (continued)		BlackRock LifePath 2035 Fund


	Investor C
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹ to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹ to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	13.32		$	13.69		$	12.45		$	11.14		$	11.49		$	10.00

Net investment income²		0.04			0.08			0.11			0.11			0.09			0.05
Net realized and unrealized gain (loss)		0.11			0.53			1.66			1.30			(0.35	)		1.98

Net increase (decrease) from investment operations		0.15			0.61			1.77			1.41			(0.26	)		2.03

Distributions from:³
Net investment income		(0.04	)		(0.10	)		(0.11	)		(0.10	)		(0.09	)		(0.06	)
Net realized gain		(0.08	)		(0.88	)		(0.42	)		—			(0.00	)⁴		(0.48	)
Return of capital		—			—			—			(0.00	)⁴		—			—

Total distributions		(0.12	)		(0.98	)		(0.53	)		(0.10	)		(0.09	)		(0.54	)

Net asset value, end of period	$	13.35		$	13.32		$	13.69		$	12.45		$	11.14		$	11.49


Total Return⁵
Based on net asset value		1.12%	⁶		4.43%			14.22%			12.70%			(2.28)%			20.30%	⁶


Ratios to Average Net Assets⁷
Total expenses		1.73%	^8,9,10		1.74%	^9,10		1.81%	^9,10		1.89%	^9,10		2.24%	^9,10		25.11%	⁸

Total expenses after fees waived and/or reimbursed		1.69%	^8,9,10		1.71%	^9,10		1.75%	^9,10		1.75%	^9,10		1.72%	^9,10		1.70%	⁸

Net investment income		0.65%	^8,9,10		0.58%	^9,10		0.81%	^9,10		0.92%	^9,10		0.80%	^9,10		0.89%	⁸


Supplemental Data
Net assets, end of period (000)	$	2,053		$	1,816		$	1,028		$	533		$	190		$	30

Portfolio turnover rate of the LifePath Master Portfolio		18%	¹¹		54%	¹¹		39%	¹¹		4%	¹²		21%	¹²		1%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

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

⁶

Aggregate total return.

⁷

⁸

Annualized.

⁹

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.43%, 0.43%, 0.43%, 0.56% and 1.09% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

¹⁰

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.16%

0.15%

0.11%

0.14%

¹¹

¹²

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 13% and 47% for the years ended December 31, 2012 and December 31, 2011, respectively.


Financial Highlights (continued)		BlackRock LifePath 2035 Fund


	Class K
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹ to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹ to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	13.60		$	13.94		$	12.55		$	11.20		$	11.52		$	10.00

Net investment income²		0.14			0.23			0.22			0.27			0.25			0.13
Net realized and unrealized gain (loss)		0.12			0.57			1.82			1.32			(0.35	)		1.99

Net increase (decrease) from investment operations		0.26			0.80			2.04			1.59			(0.10	)		2.12

Distributions from:³
Net investment income		(0.13	)		(0.26	)		(0.23	)		(0.24	)		(0.22	)		(0.12	)
Net realized gain		(0.08	)		(0.88	)		(0.42	)		—			(0.00	)⁴		(0.48	)
Return of capital		—			—			—			(0.00	)⁴		—			—

Total distributions		(0.21	)		(1.14	)		(0.65	)		(0.24	)		(0.22	)		(0.60	)

Net asset value, end of period	$	13.65		$	13.60		$	13.94		$	12.55		$	11.20		$	11.52


Total Return⁵
Based on net asset value		1.89%	⁶		5.73%			16.32%			14.30%			(0.94)%			21.16%	⁶


Ratios to Average Net Assets⁷
Total expenses		0.38%	^8,9,10		0.38%	^9,10		0.45%	^9,10		0.55%	^9,10		0.87%	^9,10		23.70%	⁸

Total expenses after fees waived and/or reimbursed		0.34%	^8,9,10		0.35%	^9,10		0.38%	^9,10		0.40%	^9,10		0.36%	^9,10		0.36%	⁸

Net investment income		2.07%	^8,9,10		1.91%	^9,10		1.65%	^9,10		2.26%	^9,10		2.17%	^9,10		2.23%	⁸


Supplemental Data
Net assets, end of period (000)	$	167		$	138		$	95		$	1,999		$	1,050		$	23

Portfolio turnover rate of the LifePath Master Portfolio		18%	¹¹		54%	¹¹		39%	¹¹		4%	¹²		21%	¹²		1%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

⁸

Annualized.

⁹

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.43%, 0.43%, 0.43%, 0.57% and 1.20% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

¹⁰

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.16%

0.15%

0.11%

0.14%

¹¹

¹²

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 13% and 47% for the years ended December 31, 2012 and December 31, 2011, respectively.


Financial Highlights (concluded)		BlackRock LifePath 2035 Fund


	Class R
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	13.44		$	13.78		$	12.52		$	11.19		$	11.52		$	10.00

Net investment income²		0.08			0.14			0.17			0.21			0.15			0.08
Net realized and unrealized gain (loss)		0.11			0.54			1.67			1.28			(0.36	)		1.99

Net increase (decrease) from investment operations		0.19			0.68			1.84			1.49			(0.21	)		2.07

Distributions from:³
Net investment income		(0.07	)		(0.14	)		(0.16	)		(0.16	)		(0.12	)		(0.07	)
Net realized gain		(0.08	)		(0.88	)		(0.42	)		—			(0.00	)⁴		(0.48	)
Return of capital		—			—			—			(0.00	)⁴		—			—

Total distributions		(0.15	)		(1.02	)		(0.58	)		(0.16	)		(0.12	)		(0.55	)

Net asset value, end of period	$	13.48		$	13.44		$	13.78		$	12.52		$	11.19		$	11.52


Total Return⁵
Based on net asset value		1.45%	⁶		4.96%			14.74%			13.37%			(1.85)%			20.67%	⁶


Ratios to Average Net Assets⁷
Total expenses		1.23%	^8,9,10		1.24%	^9,10		1.30%	^9,10		1.38%	^9,10		1.72%	^9,10		24.60%	⁸

Total expenses after fees waived and/or reimbursed		1.19%	^8,9,10		1.21%	^9,10		1.25%	^9,10		1.25%	^9,10		1.21%	^9,10		1.22%	⁸

Net investment income		1.17%	^8,9,10		1.03%	^9,10		1.25%	^9,10		1.71%	^9,10		1.31%	^9,10		1.39%	⁸


Supplemental Data
Net assets, end of period (000)	$	725		$	579		$	474		$	359		$	22		$	23

Portfolio turnover rate of the LifePath Master Portfolio		18%	¹¹		54%	¹¹		39%	¹¹		4%	¹²		21%	¹²		1%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

⁸

Annualized.

⁹

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.43%, 0.43%, 0.43%, 0.55% and 1.19% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

¹⁰

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.16%

0.15%

0.11%

0.14%

¹¹

¹²

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 13% and 47% for the years ended December 31, 2012 and December 31, 2011, respectively.


Financial Highlights		BlackRock LifePath 2045 Fund


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	14.05		$	14.39		$	12.74		$	11.24		$	11.70		$	10.00

Net investment income²		0.12			0.23			0.27			0.25			0.23			0.10
Net realized and unrealized gain (loss)		0.14			0.58			2.07			1.47			(0.51	)		2.30

Net increase (decrease) from investment operations		0.26			0.81			2.34			1.72			(0.28	)		2.40

Distributions from:³
Net investment income		(0.10	)		(0.23	)		(0.25	)		(0.22	)		(0.18	)		(0.10	)
Net realized gain		(0.10	)		(0.92	)		(0.44	)		—			—			(0.60	)
Return of capital		—			—			—			(0.00	)⁴		—			—

Total distributions		(0.20	)		(1.15	)		(0.69	)		(0.22	)		(0.18	)		(0.70	)

Net asset value, end of period	$	14.11		$	14.05		$	14.39		$	12.74		$	11.24		$	11.70


Total Return⁵
Based on net asset value		1.89%	⁶		5.66%			18.49%			15.34%			(2.46)%			24.01%	⁶


Ratios to Average Net Assets⁷
Total expenses		0.72%	^8,9,10		0.75%	^9,10		0.85%	^9,10		1.06%	^9,10		2.00%	^9,10		23.73%	⁸

Total expenses after fees waived and/or reimbursed		0.67%	^8,9,10		0.69%	^9,10		0.74%	^9,10		0.75%	^9,10		0.70%	^9,10		0.68%	⁸

Net investment income		1.64%	^8,9,10		1.57%	^9,10		1.94%	^9,10		2.04%	^9,10		2.02%	^9,10		1.81%	⁸


Supplemental Data
Net assets, end of period (000)	$	15,927		$	15,678		$	12,832		$	7,066		$	1,646		$	23

Portfolio turnover rate of the LifePath Master Portfolio		21%	¹¹		54%	¹¹		38%	¹¹		4%	¹²		35%	¹²		1%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

⁸

Annualized.

⁹

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.49%, 0.49%, 0.51%, 0.83% and 2.51% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

¹⁰

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.19%

0.16%

0.11%

0.16%

¹¹

¹²

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 15% and 71% for the years ended December 31, 2012 and December 31, 2011, respectively.


Financial Highlights (continued)		BlackRock LifePath 2045 Fund


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	14.04		$	14.39		$	12.75		$	11.25		$	11.70		$	10.00

Net investment income²		0.10			0.20			0.25			0.21			0.19			0.09
Net realized and unrealized gain (loss)		0.15			0.57			2.05			1.47			(0.49	)		2.29

Net increase (decrease) from investment operations		0.25			0.77			2.30			1.68			(0.30	)		2.38

Distributions from:³
Net investment income		(0.09	)		(0.20	)		(0.22	)		(0.18	)		(0.15	)		(0.08	)
Net realized gain		(0.10	)		(0.92	)		(0.44	)		—			(0.00	)⁴		(0.60	)
Return of capital		—			—			—			(0.00	)⁴		—			—

Total distributions		(0.19	)		(1.12	)		(0.66	)		(0.18	)		(0.15	)		(0.68	)

Net asset value, end of period	$	14.10		$	14.04		$	14.39		$	12.75		$	11.25		$	11.70


Total Return⁵
Based on net asset value		1.78%	⁶		5.37%			18.17%			15.03%			(2.61)%			23.86%	⁶


Ratios to Average Net Assets⁷
Total expenses		0.97%	^8,9,10		1.00%	^9,10		1.10%	^9,10		1.31%	^9,10		2.20%	^9,10		24.00%	⁸

Total expenses after fees waived and/or reimbursed		0.92%	^8,9,10		0.94%	^9,10		0.99%	^9,10		0.99%	^9,10		0.95%	^9,10		0.93%	⁸

Net investment income		1.40%	^8,9,10		1.35%	^9,10		1.77%	^9,10		1.75%	^9,10		1.65%	^9,10		1.56%	⁸


Supplemental Data
Net assets, end of period (000)	$	17,846		$	16,814		$	11,044		$	3,512		$	1,228		$	23

Portfolio turnover rate of the LifePath Master Portfolio		21%	¹¹		54%	¹¹		38%	¹¹		4%	¹²		35%	¹²		1%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

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

⁶

Aggregate total return.

⁷

⁸

Annualized.

⁹

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.49%, 0.49%, 0.51%, 0.83% and 2.23% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

¹⁰

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.19%

0.16%

0.11%

0.16%

¹¹

¹²

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 15% and 71% for the years ended December 31, 2012 and December 31, 2011, respectively.


Financial Highlights (continued)		BlackRock LifePath 2045 Fund


	Investor C
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	13.90		$	14.26		$	12.65		$	11.18		$	11.67		$	10.00

Net investment income²		0.05			0.09			0.13			0.13			0.11			0.05
Net realized and unrealized gain (loss)		0.13			0.57			2.05			1.45			(0.50	)		2.28

Net increase (decrease) from investment operations		0.18			0.66			2.18			1.58			(0.39	)		2.33

Distributions from:³
Net investment income		(0.04	)		(0.10	)		(0.13	)		(0.11	)		(0.10	)		(0.06	)
Net realized gain		(0.10	)		(0.92	)		(0.44	)		—			(0.00	)⁴		(0.60	)
Return of capital		—			—			—			(0.00	)⁴		—			—

Total distributions		(0.14	)		(1.02	)		(0.57	)		(0.11	)		(0.10	)		(0.66	)

Net asset value, end of period	$	13.94		$	13.90		$	14.26		$	12.65		$	11.18		$	11.67


Total Return⁵
Based on net asset value		1.32%	⁶		4.63%			17.31%			14.15%			(3.37)%			23.33%	⁶


Ratios to Average Net Assets⁷
Total expenses		1.72%	^8,9,10		1.75%	^9,10		1.85%	^9,10		2.04%	^9,10		2.99%	^9,10		24.78%	⁸

Total expenses after fees waived and/or reimbursed		1.67%	^8,9,10		1.69%	^9,10		1.74%	^9,10		1.75%	^9,10		1.70%	^9,10		1.69%	⁸

Net investment income		0.67%	^8,9,10		0.61%	^9,10		0.97%	^9,10		1.07%	^9,10		0.94%	^9,10		0.81%	⁸


Supplemental Data
Net assets, end of period (000)	$	1,648		$	1,549		$	935		$	463		$	95		$	23

Portfolio turnover rate of the LifePath Master Portfolio		21%	¹¹		54%	¹¹		38%	¹¹		4%	¹²		35%	¹²		1%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

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

⁶

Aggregate total return.

⁷

⁸

Annualized.

⁹

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.49%, 0.49%, 0.51%, 0.81% and 2.41% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

¹⁰

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.19%

0.16%

0.11%

0.16%

¹¹

¹²

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 15% and 71% for the years ended December 31, 2012 and December 31, 2011, respectively.


Financial Highlights (continued)		BlackRock LifePath 2045 Fund


	Class K
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	14.18		$	14.50		$	12.77		$	11.26		$	11.70		$	10.00

Net investment income²		0.15			0.29			0.21			0.30			0.24			0.12
Net realized and unrealized gain (loss)		0.14			0.55			2.21			1.46			(0.48	)		2.30

Net increase (decrease) from investment operations		0.29			0.84			2.42			1.76			(0.24	)		2.42

Distributions from:³
Net investment income		(0.13	)		(0.24	)		(0.25	)		(0.25	)		(0.20	)		(0.12	)
Net realized gain		(0.10	)		(0.92	)		(0.44	)		—			(0.00	)⁴		(0.60	)
Return of capital		—			—			—			(0.00	)⁴		—			—

Total distributions		(0.23	)		(1.16	)		(0.69	)		(0.25	)		(0.20	)		(0.72	)

Net asset value, end of period	$	14.24		$	14.18		$	14.50		$	12.77		$	11.26		$	11.70


Total Return⁵
Based on net asset value		2.06%	⁶		5.80%			19.11%			15.72%			(2.08)%			24.22%	⁶


Ratios to Average Net Assets⁷
Total expenses		0.37%	^8,9,10		0.38%	^9,10		0.49%	^9,10		0.70%	^9,10		1.72%	^9,10		23.37%	⁸

Total expenses after fees waived and/or reimbursed		0.32%	^8,9,10		0.33%	^9,10		0.38%	^9,10		0.39%	^9,10		0.35%	^9,10		0.33%	⁸

Net investment income		2.04%	^8,9,10		1.92%	^9,10		1.60%	^9,10		2.41%	^9,10		2.04%	^9,10		2.17%	⁸


Supplemental Data
Net assets, end of period (000)	$	34		$	28		$	29		$	697		$	259		$	23

Portfolio turnover rate of the LifePath Master Portfolio		21%	¹¹		54%	¹¹		38%	¹¹		4%	¹²		35%	¹²		1%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

⁸

Annualized.

⁹

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.49%, 0.48%, 0.55%, 0.83% and 2.71% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

¹⁰

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.19%

0.16%

0.11%

0.16%

¹¹

¹²

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 15% and 71% for the years ended December 31, 2012 and December 31, 2011, respectively.


Financial Highlights (concluded)		BlackRock LifePath 2045 Fund


	Class R
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	14.04		$	14.38		$	12.73		$	11.24		$	11.69		$	10.00

Net investment income²		0.09			0.15			0.19			0.23			0.14			0.07
Net realized and unrealized gain (loss)		0.15			0.58			2.08			1.42			(0.48	)		2.30

Net increase (decrease) from investment operations		0.24			0.73			2.27			1.65			(0.34	)		2.37

Distributions from:³
Net investment income		(0.08	)		(0.15	)		(0.18	)		(0.16	)		(0.11	)		(0.08	)
Net realized gain		(0.10	)		(0.92	)		(0.44	)		—			(0.00	)⁴		(0.60	)
Return of capital		—			—			—			(0.00	)⁴		—			—

Total distributions		(0.18	)		(1.07	)		(0.62	)		(0.16	)		(0.11	)		(0.68	)

Net asset value, end of period	$	14.10		$	14.04		$	14.38		$	12.73		$	11.24		$	11.69


Total Return⁵
Based on net asset value		1.69%	⁶		5.08%			17.91%			14.77%			(2.93)%			23.68%	⁶


Ratios to Average Net Assets⁷
Total expenses		1.22%	^8,9,10		1.25%	^9,10		1.35%	^9,10		1.55%	^9,10		2.57%	^9,10		24.26%	⁸

Total expenses after fees waived and/or reimbursed		1.17%	^8,9,10		1.19%	^9,10		1.24%	^9,10		1.25%	^9,10		1.19%	^9,10		1.19%	⁸

Net investment income		1.20%	^8,9,10		1.04%	^9,10		1.36%	^9,10		1.84%	^9,10		1.17%	^9,10		1.31%	⁸


Supplemental Data
Net assets, end of period (000)	$	640		$	520		$	560		$	423		$	22		$	23

Portfolio turnover rate of the LifePath Master Portfolio		21%	¹¹		54%	¹¹		38%	¹¹		4%	¹²		35%	¹²		1%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

⁸

Annualized.

¹⁰

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.19%

0.16%

0.11%

0.16%

¹¹

¹²

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 15% and 71% for the years ended December 31, 2012 and December 31, 2011, respectively.


Financial Highlights		BlackRock LifePath 2055 Fund


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	14.33		$	14.64		$	12.74		$	11.13		$	11.85		$	10.00

Net investment income²		0.12			0.23			0.30			0.27			0.23			0.10
Net realized and unrealized gain (loss)		0.15			0.63			2.36			1.56			(0.70	)		2.45

Net increase (decrease) from investment operations		0.27			0.86			2.66			1.83			(0.47	)		2.55

Distributions from:³
Net investment income		(0.10	)		(0.23	)		(0.26	)		(0.21	)		(0.16	)		(0.09	)
Net realized gain		(0.08	)		(0.94	)		(0.50	)		(0.01	)		(0.09	)		(0.61	)

Total distributions		(0.18	)		(1.17	)		(0.76	)		(0.22	)		(0.25	)		(0.70	)

Net asset value, end of period	$	14.42		$	14.33		$	14.64		$	12.74		$	11.13		$	11.85


Total Return⁴
Based on net asset value		1.91%	⁵		5.90%			20.99%			16.46%			(4.02)%			25.58%	⁵


Ratios to Average Net Assets⁶
Total expenses		0.81%	^7,8,9		0.82%	^8,9		1.05%	^8,9		2.00%	^8,9		9.82%	^8,9		23.56%	⁷

Total expenses after fees waived and/or reimbursed		0.67%	^7,8,9		0.67%	^8,9		0.74%	^8,9		0.75%	^8,9		0.69%	^8,9		0.66%	⁷

Net investment income		1.66%	^7,8,9		1.54%	^8,9		2.11%	^8,9		2.17%	^8,9		1.94%	^8,9		1.78%	⁷


Supplemental Data
Net assets, end of period (000)	$	7,019		$	6,773		$	4,546		$	1,981		$	164		$	24

Portfolio turnover rate of the LifePath Master Portfolio		22%	¹⁰		48%	¹⁰		67%	¹⁰		7%	¹¹		51%	¹¹		1%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

⁷

Annualized.

⁸

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.63%, 0.66%, 0.83%, 2.22% and 15.11% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁹

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.19%

0.18%

0.12%

0.11%

0.17%

¹⁰

¹¹

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 27% and 95% for the years ended December 31, 2012 and December 31, 2011, respectively.


Financial Highlights (continued)		BlackRock LifePath 2055 Fund


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	14.30		$	14.62		$	12.73		$	11.13		$	11.85		$	10.00

Net investment income²		0.11			0.20			0.28			0.23			0.16			0.09
Net realized and unrealized gain (loss)		0.15			0.62			2.34			1.56			(0.67	)		2.46

Net increase (decrease) from investment operations		0.26			0.82			2.62			1.79			(0.51	)		2.55

Distributions from:³
Net investment income		(0.09	)		(0.20	)		(0.23	)		(0.18	)		(0.12	)		(0.09	)
Net realized gain		(0.08	)		(0.94	)		(0.50	)		(0.01	)		(0.09	)		(0.61	)

Total distributions		(0.17	)		(1.14	)		(0.73	)		(0.19	)		(0.21	)		(0.70	)

Net asset value, end of period	$	14.39		$	14.30		$	14.62		$	12.73		$	11.13		$	11.85


Total Return⁴
Based on net asset value		1.82%	⁵		5.60%			20.71%			16.09%			(4.35)%			25.50%	⁵


Ratios to Average Net Assets⁶
Total expenses		1.06%	^7,8,9		1.08%	^8,9		1.30%	^8,9		2.29%	^8,9		8.94%	^8,9		23.83%	⁷

Total expenses after fees waived and/or reimbursed		0.92%	^7,8,9		0.92%	^8,9		0.99%	^8,9		1.00%	^8,9		0.94%	^8,9		0.91%	⁷

Net investment income		1.44%	^7,8,9		1.32%	^8,9		1.98%	^8,9		1.88%	^8,9		1.43%	^8,9		1.53%	⁷


Supplemental Data
Net assets, end of period (000)	$	7,014		$	5,543		$	3,951		$	1,043		$	163		$	24

Portfolio turnover rate of the LifePath Master Portfolio		22%	¹⁰		48%	¹⁰		67%	¹⁰		7%	¹¹		51%	¹¹		1%

Commencement of operations.

Based on average shares outstanding.

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

⁴

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

⁵

Aggregate total return.

⁶

⁷

Annualized.

⁸

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.63%, 0.66%, 0.82%, 2.28% and 12.56% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁹

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.19%

0.18%

0.12%

0.11%

0.17%

¹⁰

¹¹

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 27% and 95% for the years ended December 31, 2012 and December 31, 2011, respectively.


Financial Highlights (continued)		BlackRock LifePath 2055 Fund


	Investor C
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	14.18		$	14.51		$	12.64		$	11.06		$	11.82		$	10.00

Net investment income²		0.05			0.08			0.15			0.13			0.10			0.04
Net realized and unrealized gain (loss)		0.14			0.62			2.35			1.56			(0.69	)		2.45

Net increase (decrease) from investment operations		0.19			0.70			2.50			1.69			(0.59	)		2.49

Distributions from:³
Net investment income		(0.04	)		(0.09	)		(0.13	)		(0.10	)		(0.08	)		(0.06	)
Net realized gain		(0.08	)		(0.94	)		(0.50	)		(0.01	)		(0.09	)		(0.61	)

Total distributions		(0.12	)		(1.03	)		(0.63	)		(0.11	)		(0.17	)		(0.67	)

Net asset value, end of period	$	14.25		$	14.18		$	14.51		$	12.64		$	11.06		$	11.82


Total Return⁴
Based on net asset value		1.34%	⁵		4.85%			19.81%			15.27%			(5.01)%			24.98%	⁵


Ratios to Average Net Assets⁶
Total expenses		1.81%	^7,8,9		1.83%	^8,9		2.06%	^8,9		3.12%	^8,9		11.00%	^8,9		24.62%	⁷

Total expenses after fees waived and/or reimbursed		1.67%	^7,8,9		1.67%	^8,9		1.75%	^8,9		1.75%	^8,9		1.69%	^8,9		1.67%	⁷

Net investment income		0.69%	^7,8,9		0.56%	^8,9		1.07%	^8,9		1.05%	^8,9		0.88%	^8,9		0.78%	⁷


Supplemental Data
Net assets, end of period (000)	$	580		$	528		$	313		$	231		$	109		$	24

Portfolio turnover rate of the LifePath Master Portfolio		22%	¹⁰		48%	¹⁰		67%	¹⁰		7%	¹¹		51%	¹¹		1%

Commencement of operations.

Based on average shares outstanding.

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

⁴

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

⁵

Aggregate total return.

⁶

⁷

Annualized.

⁸

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.63%, 0.66%, 0.83%, 2.42% and 14.29% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁹

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.19%

0.18%

0.12%

0.11%

0.17%

¹⁰

¹¹

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 27% and 95% for the years ended December 31, 2012 and December 31, 2011, respectively.


Financial Highlights (continued)		BlackRock LifePath 2055 Fund


	Class K
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	14.49		$	14.77		$	12.77		$	11.15		$	11.86		$	10.00

Net investment income²		0.15			0.30			0.22			0.35			0.23			0.12
Net realized and unrealized gain (loss)		0.15			0.62			2.54			1.52			(0.66	)		2.46

Net increase (decrease) from investment operations		0.30			0.92			2.76			1.87			(0.43	)		2.58

Distributions from:³
Net investment income		(0.13	)		(0.26	)		(0.26	)		(0.24	)		(0.19	)		(0.11	)
Net realized gain		(0.08	)		(0.94	)		(0.50	)		(0.01	)		(0.09	)		(0.61	)

Total distributions		(0.21	)		(1.20	)		(0.76	)		(0.25	)		(0.28	)		(0.72	)

Net asset value, end of period	$	14.58		$	14.49		$	14.77		$	12.77		$	11.15		$	11.86


Total Return⁴
Based on net asset value		2.07%	⁵		6.26%			21.74%			16.83%			(3.71)%			25.84%	⁵


Ratios to Average Net Assets⁶
Total expenses		0.46%	^7,8,9		0.46%	^8,9		0.75%	^8,9		1.27%	^8,9		9.68%	^8,9		23.20%	⁷

Total expenses after fees waived and/or reimbursed		0.32%	^7,8,9		0.32%	^8,9		0.38%	^8,9		0.40%	^8,9		0.33%	^8,9		0.31%	⁷

Net investment income		2.05%	^7,8,9		1.93%	^8,9		1.61%	^8,9		2.80%	^8,9		1.99%	^8,9		2.14%	⁷


Supplemental Data
Net assets, end of period (000)	$	32		$	29		$	30		$	448		$	22		$	24

Portfolio turnover rate of the LifePath Master Portfolio		22%	¹⁰		48%	¹⁰		67%	¹⁰		7%	¹¹		51%	¹¹		1%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

⁷

Annualized.

⁸

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.63%, 0.65%, 0.95%, 1.71% and 16.23% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁹

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.19%

0.18%

0.12%

0.11%

0.17%

¹⁰

¹¹

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 27% and 95% for the years ended December 31, 2012 and December 31, 2011, respectively.


Financial Highlights (concluded)		BlackRock LifePath 2055 Fund


	Class R
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	14.32		$	14.62		$	12.72		$	11.12		$	11.84		$	10.00

Net investment income²		0.09			0.15			0.22			0.19			0.13			0.07
Net realized and unrealized gain (loss)		0.14			0.63			2.37			1.56			(0.66	)		2.46

Net increase (decrease) from investment operations		0.23			0.78			2.59			1.75			(0.53	)		2.53

Distributions from:³
Net investment income		(0.08	)		(0.14	)		(0.19	)		(0.14	)		(0.10	)		(0.08	)
Net realized gain		(0.08	)		(0.94	)		(0.50	)		(0.01	)		(0.09	)		(0.61	)

Total distributions		(0.16	)		(1.08	)		(0.69	)		(0.15	)		(0.19	)		(0.69	)

Net asset value, end of period	$	14.39		$	14.32		$	14.62		$	12.72		$	11.12		$	11.84


Total Return⁴
Based on net asset value		1.60%	⁵		5.37%			20.44%			15.75%			(4.54)%			25.33%	⁵


Ratios to Average Net Assets⁶
Total expenses		1.31%	^7,8,9		1.32%	^8,9		1.56%	^8,9		2.75%	^8,9		10.53%	^8,9		24.09%	⁷

Total expenses after fees waived and/or reimbursed		1.17%	^7,8,9		1.17%	^8,9		1.25%	^8,9		1.25%	^8,9		1.18%	^8,9		1.16%	⁷

Net investment income		1.23%	^7,8,9		0.98%	^8,9		1.58%	^8,9		1.53%	^8,9		1.14%	^8,9		1.29%	⁷


Supplemental Data
Net assets, end of period (000)	$	185		$	118		$	106		$	59		$	22		$	24

Portfolio turnover rate of the LifePath Master Portfolio		22%	¹⁰		48%	¹⁰		67%	¹⁰		7%	¹¹		51%	¹¹		1%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

⁷

Annualized.

⁸

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.63%, 0.65%, 0.84%, 2.60% and 16.23% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁹

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.19%

0.18%

0.12%

0.11%

0.17%

¹⁰

¹¹

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 27% and 95% for the years ended December 31, 2012 and December 31, 2011, respectively.


Notes to Financial Statements (Unaudited)

1. Organization:

BlackRock Funds III (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust is organized as a Delaware statutory trust. The financial statements and these accompanying notes relate to four series of the Trust, BlackRock LifePath^® 2025 Fund, BlackRock LifePath^® 2035 Fund, BlackRock LifePath^® 2045 Fund and BlackRock LifePath^® 2055 Fund (each, a “LifePath Fund” and collectively, the “LifePath Funds”). Each LifePath Fund seeks to achieve its investment objective by investing all of its assets in a separate series of Master Investment Portfolio (“MIP”): LifePath^® 2025 Master Portfolio, LifePath^® 2035 Master Portfolio, LifePath^® 2045 Master Portfolio and LifePath^® 2055 Master Portfolio (each, a “LifePath Master Portfolio” and collectively, the “LifePath Master Portfolios”). Each LifePath Master Portfolio has the same or substantially similar investment objective as its corresponding LifePath Fund. The performance of a LifePath Fund is directly affected by the performance of the corresponding LifePath Master Portfolio.

The value of each LifePath Fund’s investment in its corresponding LifePath Master Portfolio reflects that LifePath Fund’s proportionate interest in the net assets of that LifePath Master Portfolio (100.0%, 100.0%, 99.9%, and 99.9%, for LifePath 2025 Fund, LifePath 2035 Fund, LifePath 2045 Fund and LifePath 2055 Fund, respectively, as of June 30, 2015). As such, the financial statements of each corresponding LifePath Master Portfolio, including the Schedule of Investments, are included elsewhere in this report and should be read in conjunction with each LifePath Fund’s financial statements.

Each LifePath 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 each bears certain expenses and may have a conversion privilege as outlined below. Institutional and Class K Shares are sold only to certain eligible investors. Investor A and Investor C Shares are generally available through financial intermediaries. Class R Shares are available 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. For a distribution and service fee breakdown see Note 3.


Share Class	Initial Sales Charge	CDSC	Conversion Privilege
Institutional, Class K and Class R	No	No	None
Investor A	Yes	No¹	None
Investor C	No	Yes	None

Investor A Shares may be subject to a CDSC where no initial sales charge was paid at the time of purchase.

2. Significant Accounting Policies:

The LifePath Funds’ 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 and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each LifePath Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. The following is a summary of significant accounting policies followed by the LifePath Funds:

Valuation: The LifePath Funds’ investments are valued at fair value as of the close of trading on the New York Stock Exchange (“NYSE”) (generally 4:00 p.m., Eastern time). U.S. GAAP defines fair value as the price the LifePath Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The LifePath Funds’ policy is to fair value its financial instruments at market value. The LifePath Funds record their investment in the LifePath Master Portfolio at fair value based on the LifePath Funds’ proportionate interest in the net assets of the LifePath Master Portfolio. Valuation of securities held by the LifePath Master Portfolio is discussed in Note 2 of the LifePath Master Portfolio’s Notes to Financial Statements, which are included elsewhere in this report.

Investment Transactions and Investment Income: For financial reporting purposes, contributions to and withdrawals from each LifePath Master Portfolio are accounted on a trade date basis. Each LifePath Fund records daily its proportionate share of the LifePath Master Portfolio’s income, expenses and realized and unrealized gains and losses. In addition, the LifePath Fund accrues its own expenses. Income, expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.

Distributions: Distributions from net investment income are declared and paid quarterly. Distributions of capital gains are recorded on the ex-dividend date. The character and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP.

Other: Expenses directly related to the LifePath Funds or their classes are charged to that LifePath Fund or the applicable class. 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. Expenses directly related to the LifePath Funds and other shared expenses prorated to the LifePath Funds are allocated daily to each class based on its relative net assets or other appropriate methods.

3. Administration Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock, Inc. (“BlackRock”) for 1940 Act purposes.



40	BLACKROCK FUNDS III	JUNE 30, 2015


Notes to Financial Statements (continued)

The Trust, on behalf of the LifePath Funds, entered into an Administration Agreement with BlackRock Advisors, LLC (“BAL” or the “Administrator”), which has agreed to provide general administration services (other than investment advice and related portfolio activities). BAL, in consideration thereof, has agreed to bear all of the LifePath Funds’ ordinary operating expenses, excluding, generally, investment advisory fees, distribution fees, brokerage and other expenses related to the execution of portfolio transactions, extraordinary expenses and certain other expenses which are borne by the LifePath Funds. BAL is entitled to receive for these administration services an annual fee of 0.50% based on the average daily net assets of each LifePath Fund’s Institutional, Investor A, Investor C and Class R Shares and 0.15% based on the average net assets of the Class K Shares.

From time to time, BAL may waive such fees in whole or in part. Any such waiver will reduce the expenses of a LifePath Fund and, accordingly, have a favorable impact on its performance. BAL may delegate certain of its administration duties to sub-administrators.

The fees and expenses of the Trust’s trustees who are not “interested persons” of the Trust, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and the Trust’s independent registered public accounting firm (together, the “independent expenses”) are paid directly by the LifePath Funds. BAL has contractually agreed to provide an offsetting credit against the administration fees paid by the LifePath Funds in an amount equal to the independent expenses through April 30, 2025. These amounts are shown as fees waived by administrator in the Statements of Operations.

The Trust, on behalf of the LifePath Funds, entered into a Distribution Agreement and Distribution and Service Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of BlackRock. Pursuant to the Distribution and Service Plan and in accordance with Rule 12b-1 under the 1940 Act, each LifePath 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 share classes as follows:


	Service Fee		Distribution Fee
Investor A		0.25%		—
Investor C		0.25%		0.75%
Class R		0.25%		0.25%

Pursuant to sub-agreements with BRIL, broker-dealers and BRIL provide shareholder servicing and distribution services to the LifePath Funds. The ongoing service and/or distribution fee compensates BRIL and each broker-dealer for providing shareholder servicing and/or distribution related services to Investor A, Investor C and Class R shareholders.

For the six months ended June 30, 2015, affiliates earned underwriting discounts, direct commissions and dealer concessions on sales of the LifePath Fund’s Investor A Shares as follows:


	LifePath 2025 Fund		LifePath 2035 Fund		LifePath 2045 Fund		LifePath 2055 Fund
Investor A	$	184	$	68	$	229	$	176

For the six months ended June 30, 2015, affiliates received CDSCs as follows:


	LifePath 2025 Fund		LifePath 2035 Fund		LifePath 2045 Fund
Investor C	$	18	$	607	$	45

Certain officers and/or trustees of the LifePath Funds are officers and/or directors of BlackRock or its affiliates.

4. Income Tax Information:

It is the LifePath Funds’ 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 their taxable income to their shareholders. Therefore, no federal income tax provision is required.

Each LifePath 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 LifePath Funds’ U.S. federal tax returns remains open for each of the four years ended December 31, 2014. The statutes of limitations on each LifePath 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 LifePath Funds as of June 30, 2015, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the LifePath Funds’ financial statements.



BLACKROCK FUNDS III	JUNE 30, 2015	41


Notes to Financial Statements (continued)

5. Capital Share Transactions:

Transactions in capital shares for each class were as follows:


	Six Months Ended June 30, 2015						Year Ended December 31, 2014
LifePath 2025 Fund	Shares			Amount			Shares			Amount
Institutional
Shares sold		1,426,243		$	18,640,628			901,653		$	12,046,203
Shares issued to shareholders in reinvestment of dividends		28,119			360,998			141,562			1,840,363
Shares redeemed		(833,063	)		(10,959,404	)		(1,171,103	)		(15,610,001	)

Net increase (decrease)		621,299		$	8,042,222			(127,888	)	$	(1,723,435	)


Investor A
Shares sold		261,854		$	3,403,251			1,249,072		$	16,755,157
Shares issued to shareholders in reinvestment of dividends		33,167			425,806			195,900			2,536,696
Shares redeemed		(265,029	)		(3,462,942	)		(898,439	)		(12,003,995	)

Net increase		29,992		$	366,115			546,533		$	7,287,858


Investor C
Shares sold		105,232		$	1,359,786			155,070		$	2,059,006
Shares issued to shareholders in reinvestment of dividends		2,593			33,069			14,181			182,113
Shares redeemed		(28,963	)		(371,319	)		(98,326	)		(1,304,067	)

Net increase		78,862		$	1,021,536			70,925		$	937,052


Class K
Shares sold		24,407		$	317,395			98,832		$	1,339,988
Shares issued to shareholders in reinvestment of dividends		687			8,820			2,723			35,904
Shares redeemed		(21	)		(275	)		(84,601	)		(1,143,088	)

Net increase		25,073		$	325,940			16,954		$	232,804


Class R
Shares sold		69,045		$	904,295			79,505		$	1,064,199
Shares issued to shareholders in reinvestment of dividends		1,633			20,980			8,934			115,827
Shares redeemed		(56,288	)		(734,041	)		(70,180	)		(949,152	)

Net increase		14,390		$	191,234			18,259		$	230,874

Total Net Increase		769,616		$	9,947,047			524,783		$	6.965,153


LifePath 2035 Fund
Institutional
Shares sold		642,418		$	8,815,810			698,213		$	9,795,954
Shares issued to shareholders in reinvestment of dividends		23,067			311,665			130,961			1,786,762
Shares redeemed		(495,247	)		(6,863,996	)		(806,981	)		(11,297,194	)

Net increase		170,238		$	2,263,479			22,193		$	285,522


Investor A
Shares sold		341,194		$	4,682,050			1,234,302		$	17,374,827
Shares issued to shareholders in reinvestment of dividends		30,783			415,435			171,287			2,328,481
Shares redeemed		(194,585	)		(2,674,778	)		(646,590	)		(9,069,583	)

Net increase		177,392		$	2,422,707			758,999		$	10,633,725


Investor C
Shares sold		57,459		$	783,545			102,383		$	1,438,909
Shares issued to shareholders in reinvestment of dividends		1,345			17,977			8,787			118,207
Shares redeemed		(41,413	)		(563,757	)		(49,907	)		(702,265	)

Net increase		17,391		$	237,765			61,263		$	854,851



42	BLACKROCK FUNDS III	JUNE 30, 2015


Notes to Financial Statements (continued)


	Six Months Ended June 30, 2015						Year Ended December 31, 2014
LifePath 2035 Fund (concluded)	Shares			Amount			Shares			Amount
Class K
Shares sold		3,053		$	43,000			38,968		$	566,459
Shares issued to shareholders in reinvestment of dividends		142			1,938			1,074			15,129
Shares redeemed		(1,095	)		(15,125	)		(36,710	)		(531,744	)

Net increase		2,100		$	29,813			3,332		$	49,844


Class R
Shares sold		17,656		$	242,700			40,609		$	573,114
Shares issued to shareholders in reinvestment of dividends		596			8,061			3,008			41,022
Shares redeemed		(7,571	)		(104,194	)		(34,879	)		(494,583	)

Net increase		10,681		$	146,567			8,738		$	119,553

Total Net Increase		377,802		$	5,100,331			854,525		$	11,943,495


LifePath 2045 Fund
Institutional
Shares sold		339,012		$	4,887,879			568,413		$	8,346,244
Shares issued to shareholders in reinvestment of dividends		15,732			222,562			86,364			1,232,981
Shares redeemed		(341,669	)		(4,973,410	)		(430,563	)		(6,275,685	)

Net increase		13,075		$	137,031			224,214		$	3,303,540


Investor A
Shares sold		203,785		$	2,925,931			607,385		$	8,947,428
Shares issued to shareholders in reinvestment of dividends		16,771			237,138			87,027			1,239,384
Shares redeemed		(152,137	)		(2,218,218	)		(264,546	)		(3,908,096	)

Net increase		68,419		$	944,851			429,866		$	6,278,716


Investor C
Shares sold		34,965		$	498,878			60,642		$	879,755
Shares issued to shareholders in reinvestment of dividends		1,195			16,669			7,168			100,693
Shares redeemed		(29,482	)		(415,741	)		(21,880	)		(319,032	)

Net increase		6,678		$	99,806			45,930		$	661,416


Class K
Shares sold		346		$	5,000			23,669		$	360,858
Shares issued to shareholders in reinvestment of dividends		6			80			365			5,506
Shares redeemed		—			—			(24,034	)		(362,768	)

Net increase		352		$	5,080			—		$	3,596


Class R
Shares sold		11,725		$	169,298			22,356		$	328,462
Shares issued to shareholders in reinvestment of dividends		558			7,891			2,594			37,089
Shares redeemed		(3,895	)		(56,373	)		(26,829	)		(396,904	)

Net increase (decrease)		8,388		$	120,816			(1,879	)	$	(31,353	)

Total Net Increase		96,912		$	1,307,584			698,131		$	10,215,915


LifePath 2055 Fund
Institutional
Shares sold		186,540		$	2,739,026			348,366		$	5,205,213
Shares issued to shareholders in reinvestment of dividends		5,985			86,522			35,626			518,300
Shares redeemed		(178,269	)		(2,644,710	)		(221,931	)		(3,307,959	)

Net increase		14,257		$	180,838			162,061		$	2,415,554



BLACKROCK FUNDS III	JUNE 30, 2015	43


Notes to Financial Statements (concluded)


	Six Months Ended June 30, 2015						Year Ended December 31, 2014
LifePath 2055 Fund (concluded)	Shares			Amount			Shares			Amount
Investor A
Shares sold		121,869		$	1,786,711			247,660		$	3,708,400
Shares issued to shareholders in reinvestment of dividends		5,636			81,295			28,241			409,734
Shares redeemed		(27,439	)		(404,760	)		(158,705	)		(2,392,815	)

Net increase		100,066		$	1,463,246			117,196		$	1,725,319


Investor C
Shares sold		12,712		$	185,137			28,126		$	413,363
Shares issued to shareholders in reinvestment of dividends		335			4,773			2,346			33,663
Shares redeemed		(9,613	)		(138,176	)		(14,822	)		(219,461	)

Net increase		3,434		$	51,734			15,650		$	227,565


Class K
Shares sold		339		$	5,000			11,181		$	174,276
Shares issued to shareholders in reinvestment of dividends		3			46			176			2,712
Shares redeemed		(157	)		(2,363	)		(11,357	)		(175,350	)

Net increase		185		$	2,683			—		$	1,638


Class R
Shares sold		5,689		$	83,755			8,973		$	134,484
Shares issued to shareholders in reinvestment of dividends		117			1,682			507			7,425
Shares redeemed		(1,240	)		(18,423	)		(8,476	)		(128,490	)

Net increase		4,566		$	67,014			1,004		$	13,419

Total Net Increase		122,508		$	1,765,515			295,911		$	4,383,495

6. Subsequent Events:

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



44	BLACKROCK FUNDS III	JUNE 30, 2015


Master Portfolio Information as of June 30, 2015		Master Investment Portfolio

LifePath^® 2025 Master Portfolio


Portfolio Composition		Percent of Affiliated Investment Companies


Equity Funds	63	%
Fixed Income Funds	37


Ten Largest Holdings		Percent of Affiliated Investment Companies


CoreAlpha Bond Master Portfolio	32	%
Active Stock Master Portfolio	20
International Tilts Master Portfolio	14
Large Cap Index Master Portfolio	12
iShares TIPS Bond ETF	5
BlackRock Emerging Markets Fund, Inc.	3
BlackRock Commodity Strategies Fund	3
Master Small Cap Index Series	3
iShares Cohen & Steers REIT ETF	3
iShares International Developed Real Estate ETF	2

LifePath^® 2035 Master Portfolio


Portfolio Composition		Percent of Affiliated Investment Companies


Equity Funds	84	%
Fixed Income Funds	16


Ten Largest Holdings		Percent of Affiliated Investment Companies


Active Stock Master Portfolio	25	%
Large Cap Index Master Portfolio	18
International Tilts Master Portfolio	18
CoreAlpha Bond Master Portfolio	15
iShares Cohen & Steers REIT ETF	5
iShares International Developed Real Estate ETF	5
BlackRock Emerging Markets Fund, Inc.	5
BlackRock Commodity Strategies Fund	3
iShares MSCI EAFE Small-Cap ETF	2
Master Small Cap Index Series	2

The LifePath Master Portfolios’ allocation and holdings listed above are current as of the report date. However, the LifePath Master Portfolios are regularly monitored and their composition may vary throughout various periods.



BLACKROCK FUNDS III	JUNE 30, 2015	45


Master Portfolio Information as of June 30, 2015 (concluded)		Master Investment Portfolio


LifePath^® 2045 Master Portfolio

Portfolio Composition

Percent of

Affiliated Investment Companies


Equity Funds	97	%
Fixed Income Funds	3

Ten Largest Holdings

Percent of

Affiliated Investment Companies


Active Stock Master Portfolio	28	%
International Tilts Master Portfolio	21
Large Cap Index Master Portfolio	20
iShares Cohen & Steers REIT ETF	7
iShares International Developed Real Estate ETF	6
BlackRock Emerging Markets Fund, Inc.	5
BlackRock Commodity Strategies Fund	3
iShares MSCI EAFE Small-Cap ETF	3
CoreAlpha Bond Master Portfolio	3
Master Small Cap Index Series	2


LifePath^® 2055 Master Portfolio


Portfolio Composition		Percent of Affiliated Investment Companies


Equity Funds	98	%
Fixed Income Funds	2


Ten Largest Holdings		Percent of Affiliated Investment Companies


Active Stock Master Portfolio	32	%
International Tilts Master Portfolio	21
Large Cap Index Master Portfolio	16
iShares Cohen & Steers REIT ETF	7
iShares International Developed Real Estate ETF	6
BlackRock Emerging Markets Fund, Inc.	5
BlackRock Commodity Strategies Fund	4
iShares MSCI EAFE Small-Cap ETF	3
Master Small Cap Index Series	2
iShares MSCI Canada ETF	2



46	BLACKROCK FUNDS III	JUNE 30, 2015

Schedule of Investments June 30, 2015 (Unaudited)

LifePath 2025 Master Portfolio

(Percentages shown are based on Net Assets)


Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Equity Funds — 63.1%
Active Stock Master Portfolio	$	14,604,067	$	14,604,067
BlackRock Commodity Strategies Fund		306,228		2,373,265
BlackRock Emerging Markets Fund, Inc.		125,773		2,448,795
International Tilts Master Portfolio	$	9,904,093		9,904,093
iShares Cohen & Steers REIT ETF		21,315		1,910,037
iShares International Developed Real Estate ETF		58,658		1,744,489
iShares MSCI Canada ETF (b)		30,302		808,154
iShares MSCI EAFE Small-Cap ETF		25,107		1,280,959
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	9,157,043		9,157,043
Master Small Cap Index Series	$	2,311,601		2,311,601

				46,542,503
Fixed Income Funds — 36.6%
CoreAlpha Bond Master Portfolio	$	23,621,340	$	23,621,340
iShares TIPS Bond ETF		29,808		3,339,986

				26,961,326
Short-Term Securities — 0.2%
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (c)		122,038		122,038
BlackRock Cash Funds: Prime, SL Agency Shares, 0.13% (c)(d)		10,120		10,120

				132,158
Total Affiliated Investment Companies (Cost — $72,174,999) — 99.9%				73,635,987
Other Assets Less Liabilities — 0.1%				81,532

Net Assets — 100.0%			$	73,717,519

Notes to Schedule of Investments

(a)

During the six months ended June 30, 2015, investments in issuers considered to be affiliates of LifePath Master Portfolio for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


Affiliate	Shares/ Beneficial Interest Held at December 31, 2014		Shares/ Beneficial Interest Purchased			Shares/ Beneficial Interest Sold			Shares/ Beneficial Interest Held at June 30, 2015		Value at June 30, 2015		Net Income			Realized Gain (Loss)
Active Stock Master Portfolio	$	15,992,282		—		$	(1,388,215	)¹	$	14,604,067	$	14,604,067	$	130,370		$	1,370,502
BlackRock Cash Funds: Institutional, SL Agency Shares		39,034		83,004	²		—			122,038	$	122,038	$	158			—
BlackRock Cash Funds: Prime, SL Agency Shares		—		10,120	²		—			10,120	$	10,120	$	1,441	³		—
BlackRock Commodity Strategies Fund		297,619		63,027			(54,418	)		306,228	$	2,373,265		—		$	(138,380	)
BlackRock Emerging Markets Fund, Inc.		125,241		23,473			(22,941	)		125,773	$	2,448,795		—		$	(5,738	)
CoreAlpha Bond Master Portfolio	$	19,692,253	$	3,929,087	²		—		$	23,621,340	$	23,621,340	$	266,269		$	64,505
International Tilts Master Portfolio	$	7,554,212	$	2,349,881	²		—		$	9,904,093	$	9,904,093	$	150,658		$	(7,275	)
iShares Cohen & Steers REIT ETF		19,497		5,445			(3,627	)		21,315	$	1,910,037	$	28,354		$	74,885
iShares International Developed Real Estate ETF		53,688		15,509			(10,539	)		58,658	$	1,744,489	$	37,413		$	83
iShares MSCI Canada ETF		27,681		5,611			(2,990	)		30,302	$	808,154	$	6,141		$	(4,366	)
iShares MSCI EAFE Small-Cap ETF		24,879		4,077			(3,849	)		25,107	$	1,280,959	$	15,111		$	8,856
iShares TIPS Bond ETF		25,680		8,266			(4,138	)		29,808	$	3,339,986		—		$	(26,728	)
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	5,483,712	$	3,673,331	²		—		$	9,157,043	$	9,157,043	$	69,053		$	45,879
Master Small Cap Index Series	$	1,907,031	$	404,570	²		—		$	2,311,601	$	2,311,601	$	13,374		$	73,064
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)⁴		—		—			—			—		—	$	3,029			—
¹ Represents net shares/beneficial interest sold.
² Represents net shares/beneficial interest purchased.
³ Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.
⁴ No longer held by LifePath Master Portfolio as of report date.

(b)

Security, or a portion of security, is on loan.

(c)

Represents the current yield as of report date.

(d)

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

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that LifePath Master Portfolio has the ability to access

•

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including LifePath Master Portfolio’s own assumptions used in determining the fair value of investments)

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	47


Schedule of Investments (concluded)		LifePath 2025 Master Portfolio

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with LifePath Master Portfolio’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. For information about LifePath Master Portfolio’s policy regarding valuation of investments, refer to Note 2 of the Notes to Financial Statements.

As of June 30, 2015, the following table summarizes LifePath Master Portfolio’s investments categorized in the disclosure hierarchy:


	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Affiliated Investment Companies	$	14,037,843	$	59,598,144		—	$	73,635,987

LifePath Master Portfolio may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of June 30, 2015, collateral on securities loaned at value of $10,120 is categorized as Level 2 within the disclosure hierarchy.

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



48	BLACKROCK FUNDS III	JUNE 30, 2015

Schedule of Investments June 30, 2015 (Unaudited)

LifePath 2035 Master Portfolio

(Percentages shown are based on Net Assets)


Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Equity Funds — 84.1%
Active Stock Master Portfolio	$	15,001,316	$	15,001,316
BlackRock Commodity Strategies Fund		263,335		2,040,849
BlackRock Emerging Markets Fund, Inc.		140,393		2,733,459
International Tilts Master Portfolio	$	10,827,965		10,827,965
iShares Cohen & Steers REIT ETF		34,897		3,127,120
iShares International Developed Real Estate ETF		93,582		2,783,129
iShares MSCI Canada ETF		33,304		888,218
iShares MSCI EAFE Small-Cap ETF		28,815		1,470,141
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	10,946,472		10,946,472
Master Small Cap Index Series	$	1,442,640		1,442,640

				51,261,309
Fixed Income Funds — 15.6%
CoreAlpha Bond Master Portfolio	$	9,100,711	$	9,100,711
iShares TIPS Bond ETF		3,548		397,553

				9,498,264
Short-Term Securities — 0.3%
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (b)		161,179		161,179
Total Affiliated Investment Companies (Cost — $59,366,758) — 100.0%				60,920,752
Liabilities in Excess of Other Assets — (0.0)%				(9,554	)

Net Assets — 100.0%			$	60,911,198

Notes to Schedule of Investments

(a)


Affiliate	Shares/ Beneficial Interest Held at December 31, 2014		Shares/ Beneficial Interest Purchased			Shares/ Beneficial Interest Sold			Shares/ Beneficial Interest Held at June 30, 2015		Value at June 30, 2015		Net Income			Realized Gain (Loss)
Active Stock Master Portfolio	$	15,858,279		—		$	(856,963	)¹	$	15,001,316	$	15,001,316	$	131,115		$	1,401,070
BlackRock Cash Funds: Institutional, SL Agency Shares		105,615		55,564	²		—			161,179	$	161,179	$	83			—
BlackRock Cash Funds: Prime, SL Agency Shares		—		—			—			—		—	$	1,626	³		—
BlackRock Commodity Strategies Fund		266,087		35,778			(38,530	)		263,335	$	2,040,849		—		$	(104,629	)
BlackRock Emerging Markets Fund, Inc.		147,219		18,632			(25,458	)		140,393	$	2,733,459		—		$	(9,717	)
CoreAlpha Bond Master Portfolio	$	7,576,096	$	1,524,615	²		—		$	9,100,711	$	9,100,711	$	102,687		$	23,727
International Tilts Master Portfolio	$	8,798,849	$	2,029,116	²		—		$	10,827,965	$	10,827,965	$	167,386		$	(9,880	)
iShares Cohen & Steers REIT ETF		30,677		8,283			(4,063	)		34,897	$	3,127,120	$	45,010		$	80,367
iShares International Developed Real Estate ETF		84,556		21,191			(12,165	)		93,582	$	2,783,129	$	58,914		$	(7,246	)
iShares MSCI Canada ETF		32,043		3,975			(2,714	)		33,304	$	888,218	$	7,055		$	(3,168	)
iShares MSCI EAFE Small-Cap ETF		28,911		4,279			(4,375	)		28,815	$	1,470,141	$	17,293		$	2,205
iShares TIPS Bond ETF		3,848		—			(300	)		3,548	$	397,553		—		$	411
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	8,787,621	$	2,158,851	²		—		$	10,946,472	$	10,946,472	$	92,694		$	67,823
Master Small Cap Index Series	$	1,338,461	$	104,179	²		—		$	1,442,640	$	1,442,640	$	8,705		$	46,823
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)⁴		—		—			—			—		—	$	1,179			—

¹ Represents net shares/beneficial interest sold.
² Represents net shares/beneficial interest purchased.
³ Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.
⁴ No longer held by LifePath Master Portfolio as of report date.

(b)

Represents the current yield as of report date.

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that LifePath Master Portfolio has the ability to access

•

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	49


Schedule of Investments (concluded)		LifePath 2035 Master Portfolio

As of June 30, 2015, the following table summarizes LifePath Master Portfolio’s investments categorized in the disclosure hierarchy:


	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Affiliated Investment Companies	$	13,601,648	$	47,319,104		—	$	60,920,752

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



50	BLACKROCK FUNDS III	JUNE 30, 2015

Schedule of Investments June 30, 2015 (Unaudited)

LifePath 2045 Master Portfolio

(Percentages shown are based on Net Assets)


Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Equity Funds — 97.1%
Active Stock Master Portfolio	$	10,003,600	$	10,003,600
BlackRock Commodity Strategies Fund		160,784		1,246,077
BlackRock Emerging Markets Fund, Inc.		96,923		1,887,084
International Tilts Master Portfolio	$	7,491,984		7,491,984
iShares Cohen & Steers REIT ETF		27,926		2,502,449
iShares International Developed Real Estate ETF		74,861		2,226,366
iShares MSCI Canada ETF		23,042		614,530
iShares MSCI EAFE Small-Cap ETF		19,681		1,004,125
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	7,302,665		7,302,665
Master Small Cap Index Series	$	838,787		838,787

				35,117,667
Fixed Income Fund — 2.5%
CoreAlpha Bond Master Portfolio	$	895,447	$	895,447
Short-Term Securities — 0.3%
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (b)		95,269		95,269
Total Affiliated Investment Companies (Cost — $35,035,669) — 99.9%				36,108,383
Other Assets Less Liabilities — 0.1%				46,316

Net Assets — 100.0%			$	36,154,699


Notes to Schedule of Investments

(a)


Affiliate	Shares/ Beneficial Interest Held at December 31, 2014		Shares/ Beneficial Interest Purchased			Shares/ Beneficial Interest Sold			Shares/ Beneficial Interest Held at June 30, 2015		Value at June 30, 2015		Net Income			Realized Gain (Loss)
Active Stock Master Portfolio	$	10,880,891		—		$	(877,291	)¹	$	10,003,600	$	10,003,600	$	87,869		$	937,632
BlackRock Cash Funds: Institutional, SL Agency Shares		75,058		20,211	²		—			95,269		95,269	$	119			—
BlackRock Cash Funds: Prime, SL Agency Shares³		—		—			—			—		—	$	749	³		—
BlackRock Commodity Strategies Fund		178,939		13,852			(32,007	)		160,784	$	1,246,077		—		$	(79,570	)
BlackRock Emerging Markets Fund, Inc.		104,984		13,783			(21,844	)		96,923	$	1,887,084		—		$	(5,003	)
CoreAlpha Bond Master Portfolio	$	644,004	$	251,443	²		—		$	895,447	$	895,447	$	9,272		$	1,965
International Tilts Master Portfolio	$	6,367,614	$	1,124,370	²		—		$	7,491,984	$	7,491,984	$	115,260		$	(8,819	)
iShares Cohen & Steers REIT ETF		25,214		6,411			(3,699	)		27,926	$	2,502,449	$	36,115		$	78,461
iShares International Developed Real Estate ETF		69,082		15,979			(10,200	)		74,861	$	2,226,366	$	47,225		$	(2,143	)
iShares MSCI Canada ETF		23,208		2,639			(2,805	)		23,042	$	614,530	$	4,896		$	(3,440	)
iShares MSCI EAFE Small-Cap ETF		20,569		2,302			(3,190	)		19,681	$	1,004,125	$	11,845		$	10,050
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	6,174,176	$	1,128,489	²		—		$	7,302,665	$	7,302,665	$	62,262		$	46,379
Master Small Cap Index Series	$	865,739		—		$	(26,952	)¹	$	838,787	$	838,787	$	5,263		$	27,906
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)⁴		—		—			—			—		—	$	107			—
¹ Represents net shares/beneficial interest sold.
² Represents net shares/beneficial interest purchased.
³ Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.
⁴ No longer held by LifePath Master Portfolio as of report date.

(b)

Represents the current yield as of report date.

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that LifePath Master Portfolio has the ability to access

•

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	51


Schedule of Investments (concluded)		LifePath 2045 Master Portfolio

As of June 30, 2015, the following table summarizes LifePath Master Portfolio’s investments categorized in the disclosure hierarchy:


	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Affiliated Investment Companies	$	9,575,900	$	26,532,483		—	$	36,108,383

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



52	BLACKROCK FUNDS III	JUNE 30, 2015

Schedule of Investments June 30, 2015 (Unaudited)

LifePath 2055 Master Portfolio

(Percentages shown are based on Net Assets)


Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Equity Funds — 98.0%
Active Stock Master Portfolio	$	4,704,235	$	4,704,235
BlackRock Commodity Strategies Fund		65,947		511,092
BlackRock Emerging Markets Fund, Inc.		39,996		778,714
International Tilts Master Portfolio	$	3,132,448		3,132,448
iShares Cohen & Steers REIT ETF		11,623		1,041,537
iShares International Developed Real Estate ETF		31,686		942,342
iShares MSCI Canada ETF		9,685		258,299
iShares MSCI EAFE Small-Cap ETF		7,971		406,680
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	2,435,409		2,435,409
Master Small Cap Index Series	$	351,233		351,233

				14,561,989
Fixed Income Fund — 1.5%
CoreAlpha Bond Master Portfolio	$	220,477	$	220,477
Short-Term Securities — 0.3%
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (b)		52,833		52,833
Total Affiliated Investment Companies (Cost — $14,429,584) — 99.8%				14,835,299
Other Assets Less Liabilities — 0.2%				28,682

Net Assets — 100.0%			$	14,863,981

Notes to Schedule of Investments

(a)


Affiliate	Shares/ Beneficial Interest Held at December 31, 2014		Shares/ Beneficial Interest Purchased			Shares/ Beneficial Interest Sold			Shares/ Beneficial Interest Held at June 30, 2015		Value at June 30, 2015		Net Income			Realized Gain (Loss)
Active Stock Master Portfolio	$	4,678,399	$	25,836	¹		—		$	4,704,235	$	4,704,235	$	39,811		$	424,992
BlackRock Cash Funds: Institutional, SL Agency Shares		25,991		26,842	¹		—			52,833	$	52,833	$	33			—
BlackRock Cash Funds: Prime, SL Agency Shares		—		—			—			—		—	$	1,051	²		—
BlackRock Commodity Strategies Fund		68,577		13,666			(16,296	)		65,947	$	511,092		—		$	(37,320	)
BlackRock Emerging Markets Fund, Inc.		40,487		9,494			(9,985	)		39,996	$	778,714		—		$	(2,049	)
CoreAlpha Bond Master Portfolio	$	115,070	$	105,407	¹		—		$	220,477	$	220,477	$	2,162		$	303
International Tilts Master Portfolio	$	2,416,757	$	715,691	¹		—		$	3,132,448	$	3,132,448	$	46,809		$	(2,660	)
iShares Cohen & Steers REIT ETF		9,602		2,921			(900	)		11,623	$	1,041,537	$	14,908		$	18,514
iShares International Developed Real Estate ETF		26,550		8,436			(3,300	)		31,686	$	942,342	$	19,545		$	(3,735	)
iShares MSCI Canada ETF		8,714		2,071			(1,100	)		9,685	$	258,299	$	2,057		$	(1,315	)
iShares MSCI EAFE Small-Cap ETF		7,943		1,028			(1,000	)		7,971	$	406,680	$	4,797		$	(725	)
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	1,751,127	$	684,282	¹		—		$	2,435,409	$	2,435,409	$	19,480		$	14,101
Master Small Cap Index Series	$	342,105	$	9,128	¹		—		$	351,233	$	351,233	$	2,144		$	11,546
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)³		—		—			—			—		—	$	26			—
¹ Represents net shares/beneficial interest purchased.
² Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses. ³ No longer held by LifePath Master Portfolio as of report date.

(b)

Represents the current yield as of report date.

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that LifePath Master Portfolio has the ability to access

•

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	53


Schedule of Investments (concluded)		LifePath 2055 Master Portfolio

As of June 30, 2015, the following table summarizes LifePath Master Portfolio’s investments categorized in the disclosure hierarchy:


	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Affiliated Investment Companies	$	3,991,497	$	10,843,802		—	$	14,835,299

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



54	BLACKROCK FUNDS III	JUNE 30, 2015


Statements of Assets and Liabilities		Master Investment Portfolio


June 30, 2015 (Unaudited)	LifePath 2025 Master Portfolio		LifePath 2035 Master Portfolio		LifePath 2045 Master Portfolio		LifePath 2055 Master Portfolio

Assets
Investments at value — affiliated^1,2	$	73,635,987	$	60,920,752	$	36,108,383	$	14,835,299
Receivables:
Investments sold		475,000		498,442		131,000		48,000
Contributions from investors		65,781		—		103,441		45,425
Dividends — affliated		21,252		24,348		16,741		6,855
Securities lending income — affiliated		6		30		—		192
From the Manager		17,098		18,578		19,893		20,370

Total assets		74,215,124		61,462,150		36,379,458		14,956,141


Liabilities
Collateral on securities loaned at value		10,120		—		—		—
Payables:
Investments purchased		474,346		396,261		211,757		79,170
Professional fees		13,139		13,123		13,002		12,990
Withdrawals to investors		—		141,568		—		—

Total liabilities		497,605		550,952		224,759		92,160

Net Assets	$	73,717,519	$	60,911,198	$	36,154,699	$	14,863,981


Net Assets Consist of
Investors’ capital	$	72,256,531	$	59,357,204	$	35,081,985	$	14,458,266
Net unrealized appreciation (depreciation)		1,460,988		1,553,994		1,072,714		405,715

Net Assets	$	73,717,519	$	60,911,198	$	36,154,699	$	14,863,981

¹ Investments at cost — affiliated	$	72,174,999	$	59,366,758	$	35,035,669	$	14,429,584
² Securities loaned at value	$	9,815		—		—		—


Statements of Operations		Master Investment Portfolio


Six Months Ended June 30, 2015 (Unaudited)	LifePath 2025 Master Portfolio			LifePath 2035 Master Portfolio			LifePath 2045 Master Portfolio			LifePath 2055 Master Portfolio

Investment Income
Dividends — affiliated	$	87,019		$	128,272		$	100,081		$	41,307
Securities lending — affiliated — net		1,441			1,626			749			1,051
Interest — affiliated		158			83			119			33
Net investment income allocated from the applicable Underlying Master Portfolios:
Dividends		393,817			431,448			291,729			116,974
Interest		298,221			118,698			14,216			3,974
Expenses		(75,877	)		(62,751	)		(36,752	)		(15,394	)
Fees waived		16,592			16,371			10,840			4,878

Total income		721,371			633,747			380,982			152,823


Expenses
Investment advisory		119,956			102,218			61,535			24,354
Professional		12,978			12,978			12,869			12,860
Independent Trustees		3,626			3,536			3,265			2,993

Total expenses		136,560			118,732			77,669			40,207
Less fees waived by the Manager		(119,418	)		(109,132	)		(74,487	)		(39,071	)

Total expenses after fees waived		17,142			9,600			3,182			1,136

Net investment income		704,229			624,147			377,800			151,687


Realized and Unrealized Gain (Loss)
Net realized gain (loss) from:
Investments — affiliated		(91,388	)		(41,778	)		(1,645	)		(26,630	)
Allocation from the applicable Underlying Master Portfolios from investments, financial futures contracts, swaps and foreign currency transactions		1,546,675			1,529,564			1,005,061			448,282

		1,455,287			1,487,786			1,003,416			421,652

Net change in unrealized appreciation (depreciation) on:
Investments — affiliated		(159,675	)		(267,863	)		(227,465	)		(79,454	)
Allocation from the applicable Underlying Master Portfolios from investments, financial futures contracts, swaps and foreign currency translations		(1,034,880	)		(738,488	)		(351,858	)		(198,385	)

		(1,194,555	)		(1,006,351	)		(579,323	)		(277,839	)

Net realized and unrealized gain		260,732			481,435			424,093			143,813

Net Increase in Net Assets Resulting from Operations	$	964,961		$	1,105,582		$	801,893		$	295,500


Statements of Changes in Net Assets


	LifePath 2025 Master Portfolio						LifePath 2035 Master Portfolio
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014			Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	704,229		$	1,371,375		$	624,147		$	1,161,183
Net realized gain		1,455,287			3,054,668			1,487,786			2,768,344
Net change in unrealized appreciation (depreciation)		(1,194,555	)		(942,823	)		(1,006,351	)		(907,150	)

Net increase in net assets resulting from operations		964,961			3,483,220			1,105,582			3,022,377


Capital Transactions
Proceeds from contributions		24,625,355			26,135,006			14,567,105			24,161,049
Value of withdrawals		(15,947,202	)		(24,205,432	)		(10,524,064	)		(16,783,453	)

Net increase in net assets derived from capital transactions		8,678,153			1,929,574			4,043,041			7,377,596


Net Assets
Total increase in net assets		9,643,114			5,412,794			5,148,623			10,399,973
Beginning of period		64,074,405			58,661,611			55,762,575			45,362,602

End of period	$	73,717,519		$	64,074,405		$	60,911,198		$	55,762,575


	LifePath 2045 Master Portfolio						LifePath 2055 Master Portfolio
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014			Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	377,800		$	684,393		$	151,687		$	249,641
Net realized gain		1,003,416			1,652,212			421,652			594,792
Net change in unrealized appreciation (depreciation)		(579,323	)		(523,538	)		(277,839	)		(125,941	)

Net increase in net assets resulting from operations		801,893			1,813,067			295,500			718,492


Capital Transactions
Proceeds from contributions		8,486,986			15,976,732			4,799,629			7,680,460
Value of withdrawals		(7,875,944	)		(8,526,879	)		(3,288,045	)		(4,319,994	)

Net increase in net assets derived from capital transactions		611,042			7,449,853			1,511,584			3,360,466


Net Assets
Total increase in net assets		1,412,935			9,262,920			1,807,084			4,078,958
Beginning of period		34,741,764			25,478,844			13,056,897			8,977,939

End of period	$	36,154,699		$	34,741,764		$	14,863,981		$	13,056,897


Financial Highlights		Master Investment Portfolio


	LifePath 2025 Master Portfolio
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹ to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹ to December 31, 2010

Total Return
Total return		1.55%	²		5.73%			12.34%			12.57%			0.99%			17.65%	²


Ratios to Average Net Assets
Total expenses		0.57%	^3,4,5,6		0.58%	^4,5,6		0.61%	^4,5,6		0.69%	^7,8,9		1.07%	^7,8,9		13.61%	^3,7

Total expenses after fees waived		0.22%	^3,4,5,6		0.22%	^4,5,6		0.25%	^4,5,6		0.26%	^7,8,9		0.24%	^7,8,9		0.22%	^3,7

Net investment income¹⁰		2.05%	^3,4,5,6		2.05%	^4,5,6		2.11%	^4,5,6		2.32%	^7,8,9		2.62%	^7,8,9		2.37%	^3,7


Supplemental Data
Net assets, end of period (000)		$73,718			$64,074			$58,662			$34,044			$12,178			$134

Portfolio turnover rate		24%	¹¹		50%	¹¹		30%	¹¹		4%	¹²		24%	¹²		2%

Commencement of operations.

Aggregate total return.

Annualized.

⁴

Includes the LifePath Master Portfolio’s pro rata portion of expenses from Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. These ratios do not reflect any expenses incurred indirectly as a result of investments in BlackRock Cash Funds: Institutional, BlackRock Commodity Strategies Fund, BlackRock Emerging Markets Fund, Inc. and iShares exchange-traded funds.

⁵

Includes the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated fees waived of 0.05%, 0.05% and 0.04% for the six months ended June 30, 2015 and for the years ended December 31, 2014 and December 31, 2013, respectively.

⁶

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.13%, 0.13% and 0.10% for the six months ended June 30, 2015 and for the years ended December 31, 2014 and December 31, 2013, respectively, although the ratio does include the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated expenses and/or net investment income.

⁷

Includes the LifePath Master Portfolio’s pro rata portion of expenses from Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio, except the total expenses for the period ended December 31, 2010, which include gross expenses. These ratios do not reflect any expenses incurred indirectly as a result of investments in BlackRock Cash Funds: Institutional, BlackRock Commodity Strategies Fund, BlackRock Emerging Markets Fund, Inc. and iShares exchange-traded funds.

⁸

Includes the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated fees waived of 0.04% and 0.03% for the years ended December 31, 2012 and December 31, 2011, respectively.

⁹

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.10% and 0.12% for the years ended December 31, 2012 and December 31, 2011, respectively, although the ratio does include the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated expenses and/or net investment income.

¹⁰

Includes the LifePath Master Portfolio’s share of the allocated net investment income from Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio, except for the years ended December 31, 2014 and December 31, 2013, which also includes International Tilts Master Portfolio and Large Cap Index Master Portfolio.

¹¹

Includes the purchases and sales of the underlying funds and Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio.

¹²

Excludes purchases and sales of the underlying funds and Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 17% and 58% for the years ended December 31, 2012 and December 31, 2011, respectively.


Financial Highlights		Master Investment Portfolio


	LifePath 2035 Master Portfolio
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹ to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹ to December 31, 2010

Total Return
Total return		1.90%	²		6.01%			15.83%			14.35%			(0.82)%			21.21%	²


Ratios to Average Net Assets
Total expenses		0.57%	^3,4,5,6		0.58%	^4,5,6		0.63%	^4,5,6		0.76%	^7,8,9		1.34%	^7,8,9		13.23%	^3,7

Total expenses after fees waived		0.19%	^3,4,5,6		0.20%	^4,5,6		0.25%	^4,5,6		0.25%	^7,8,9		0.22%	^7,8,9		0.19%	^3,7

Net investment income¹⁰		2.14%	^3,4,5,6		2.06%	^4,5,6		2.29%	^4,5,6		2.42%	^7,8,9		2.50%	^7,8,9		2.33%	^3,7


Supplemental Data
Net assets, end of period (000)		$60,911			$55,763			$45,363			$25,732			$7,426			$149

Portfolio turnover rate		18%	¹¹		54%	¹¹		39%	¹¹		4%	¹²		21%	¹²		1%

Commencement of operations.

Aggregate total return.

Annualized.

⁴

⁵

Includes the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated fees waived of 0.06%, 0.06% and 0.05% for the six months ended June 30, 2015 and for the years ended December 31, 2014 and December 31, 2013, respectively.

⁶

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.16%, 0.15% and 0.11% for the six months ended June 30, 2015 and for the years ended December 31, 2014 and December 31, 2013, respectively, although the ratio does include the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated expenses and/or net investment income.

⁷

⁸

Includes the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated fees waived of 0.05% and 0.04% for the years ended December 31, 2012 and December 31, 2011, respectively.

⁹

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.11% and 0.14% for the years ended December 31, 2012 and December 31, 2011, respectively, although the ratio does include the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated expenses and/or net investment income.

¹⁰

¹¹

¹²

Excludes purchases and sales of the underlying funds and Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 13% and 47% for the years ended December 31, 2012 and December 31, 2011, respectively.


Financial Highlights		Master Investment Portfolio


	LifePath 2045 Master Portfolio
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹ to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹ to December 31, 2010

Total Return
Total return		2.14%	²		6.16%			18.99%			15.84%			(1.96)%			24.26%	²


Ratios to Average Net Assets
Total expenses		0.59%	^3,4,5,6		0.61%	^4,5,6		0.70%	^4,5,6		1.01%	^7,8,9		2.58%	^7,8,9		13.23%	^3,7

Total expenses after fees waived		0.17%	^3,4,5,6		0.19%	^4,5,6		0.24%	^4,5,6		0.24%	^7,8,9		0.20%	^7,8,9		0.17%	^3,7

Net investment income¹⁰		2.15%	^3,4,5,6		2.08%	^4,5,6		2.47%	^4,5,6		2.54%	^7,8,9		2.43%	^7,8,9		2.25%	^3,7


Supplemental Data
Net assets, end of period (000)		$36,155			$34,742			$25,479			$12,178			$3,249			$142

Portfolio turnover rate		21%	¹¹		54%	¹¹		38%	¹¹		4%	¹²		35%	¹²		1%

Commencement of operations

Aggregate total return.

Annualized.

⁴

⁵

Includes the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated fees waived of 0.06%, 0.06% and 0.05% for the six months ended June 30, 2015 and for the years ended December 31, 2014 and December 31, 2013, respectively.

⁶

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.19%, 0.16% and 0.11% for the six months ended June 30, 2015 and for the years ended December 31, 2014 and December 31, 2013, respectively, although the ratio does include the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated expenses and/or net investment income.

⁷

⁸

Includes the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated fees waived of 0.06% and 0.03% for the years ended December 31, 2012 and December 31, 2011, respectively.

⁹

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.11% and 0.16% for the years ended December 31, 2012 and December 31, 2011, respectively, although the ratio does include the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated expenses and/or net investment income.

¹⁰

¹¹

¹²

Excludes purchases and sales of the underlying funds and Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 15% and 71% for the years ended December 31, 2012 and December 31, 2011, respectively.


Financial Highlights		Master Investment Portfolio


	LifePath 2055 Master Portfolio
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period June 30, 2010¹ to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period June 30, 2010¹ to December 31, 2010

Total Return
Total return		2.16%	²		6.40%			21.49%			16.96%			(3.52)%			25.83%	²


Ratios to Average Net Assets
Total expenses		0.73%	^3,4,5,6		0.76%	^4,5,6		1.01%	^4,5,6		2.41%	^7,8,9		14.66%	^7,8,9		13.13%	^3,7

Total expenses after fees waived		0.17%	^3,4,5,6		0.17%	^4,5,6		0.24%	^4,5,6		0.25%	^7,8,9		0.19%	^7,8,9		0.16%	^3,7

Net investment income¹⁰		2.18%	^3,4,5,6		2.06%	^4,5,6		2.65%	^4,5,6		2.66%	^7,8,9		2.30%	^7,8,9		2.21%	^3,7


Supplemental Data
Net assets, end of period (000)		$14,864			$13,057			$8,978			$3,775			$494			$144

Portfolio turnover rate		22%	¹¹		48%	¹¹		67%	¹¹		7%	¹²		51%	¹²		1%

Commencement of operations

Aggregate total return.

Annualized.

⁴

⁵

Includes the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated fees waived of 0.07%, 0.07% and 0.06% for the six months ended June 30, 2015 and for the years ended December 31, 2014 and December 31, 2013, respectively.

⁶

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.19%, 0.18% and 0.12% for the six months ended June 30, 2015 and for the years ended December 31, 2014 and December 31, 2013, respectively, although the ratio does include the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated expenses and/or net investment income.

⁷

⁸

Includes the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated fees waived of 0.07% and 0.06% for the years ended December 31, 2012 and December 31, 2011, respectively.

⁹

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.11% and 0.17% for the years ended December 31, 2012 and December 31, 2011, respectively, although the ratio does include the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated expenses and/or net investment income.

¹⁰

¹¹

¹²

Excludes purchases and sales of the underlying funds and Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 27% and 95% for the years ended December 31, 2012 and December 31, 2011, respectively.


Notes to Financial Statements (Unaudited)

1. Organization:

As of June 30, 2015, the investment of LifePath 2045 Master Portfolio and LifePath 2055 Master Portfolio in Active Stock Master Portfolio represented 27.7% and 31.7%, respectively, of net assets. The investment of LifePath 2025 Master Portfolio in CoreAlpha Bond Master Portfolio represented 32% of its net assets. The financial statements of CoreAlpha Bond Master Portfolio, including the Schedule of Investments, can be read in conjunction with LifePath 2025 Master Portfolio’s financial statements. Active Stock Master Portfolio’s and CoreAlpha Bond Master Portfolio’s financial statements, included in filings under MIP, are available, without charge, on the SEC’s website at http://www.sec.gov.

The LifePath Master Portfolios will generally invest in other registered investment companies (each, an “Underlying Fund” and collectively the “Underlying LifePath Master Portfolios”) that are managed by subsidiaries of BlackRock, Inc. (“BlackRock”) and its affiliates and affiliates of the LifePath Master Portfolios. The LifePath Master Portfolios may also invest in other master portfolios (“Underlying Master Portfolios”) that are managed by subsidiaries of BlackRock.

The value of a LifePath Master Portfolio’s investment in each of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, and Master Small Cap Index Series reflects that LifePath Master Portfolio’s proportionate interest in the net assets of that master portfolio. As of June 30, 2015, the LifePath Master Portfolios held interests in Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, and Master Small Cap Index Series as follows:


	Active Stock Master Portfolio		CoreAlpha Bond Master Portfolio		International Tilts Master Portfolio		Large Cap Index Master Portfolio		Master Small Cap Index Series
LifePath 2025 Master Portfolio		0.76%		0.79%		0.71%		0.26%		0.23%
LifePath 2035 Master Portfolio		0.78%		0.30%		0.77%		0.32%		0.14%
LifePath 2045 Master Portfolio		0.52%		0.03%		0.53%		0.21%		0.08%
LifePath 2055 Master Portfolio		0.24%		0.01%		0.22%		0.07%		0.03%

The LifePath Master Portfolios, together with certain other registered investment companies advised by BlackRock Fund Advisors (“BFA” or the “Manager”) or its affiliates, is included in a complex of open-end funds referred to as the Equity-Liquidity Complex.

2. Significant Accounting Policies:

The LifePath Master Portfolios’ 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 and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each LifePath Master Portfolio is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. The following is a summary of significant accounting policies followed by the LifePath Master Portfolios:



62	BLACKROCK FUNDS III	JUNE 30, 2015


Notes to Financial Statements (continued)

on capital gains, dividends and interest. Upon notification from issuers, some 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 on the accrual basis.

Each LifePath Master Portfolio records daily its proportionate share of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio income, expenses and realized and unrealized gains and losses.

Other: Expenses directly related to a LifePath Master Portfolio are charged to that LifePath Master Portfolio. Other operating expenses shared by several funds are prorated among those funds on the basis of relative net assets or other appropriate methods.

The LifePath Master Portfolios have an arrangement with the custodian whereby fees may be reduced by credits earned on uninvested cash balances, which, if applicable, are shown as fees paid indirectly in the Statements of Operations. The custodian imposes fees on overdrawn cash balances, which can be offset by accumulated credits earned or may result in additional custody charges.

3. Securities and Other Investments:

Securities Lending: Certain LifePath Master Portfolios may lend their securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the LifePath Master Portfolios 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 LifePath Master Portfolios 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 LifePath Master Portfolio and any additional required collateral is delivered to the LifePath Master Portfolio, or excess collateral returned by the LifePath Master Portfolio, on the next business day. During the term of the loan, the LifePath Master Portfolio is entitled to all distributions made on or in respect of the loaned securities. 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.

The market value of securities on loan, all of which were classified as affiliated investments in the LifePath Master Portfolios’ Schedules of Investments, and the value of the related collateral are shown separately in the Statements of Assets and Liabilities as a component of investments at value-affiliated and collateral on securities loaned at value, respectively. As of June 30, 2015, any securities on loan were collateralized by cash. The cash collateral invested by the securities lending agent, BlackRock Institutional Trust Company, N.A. (“BTC”), if any, is disclosed in the Schedules of Investments.

Securities lending transactions are entered into by the LifePath Master Portfolios 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 LifePath Master Portfolios, 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, the borrower can resell or re-pledge the loaned securities, and the LifePath Master Portfolios can reinvest cash collateral, or, upon an event of default, resell or re-pledge the collateral.

As of June 30, 2015, the following table is a summary of the LifePath Master Portfolios securities lending agreements by counterparty, which are subject to offset under an MSLA:


LifePath 2025 Master Portfolio
Counterparty	Securities Loaned at Value		Cash Collateral Received¹			Net Amount
Barclays Capital, Inc.	$	9,815	$	(9,815	)		—

Collateral with a value of $10,120 has been received in connection with securities lending agreements. Collateral received in excess of the value of securities loaned from the individual counterparty is not shown for financial reporting purposes.

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 LifePath Master Portfolios benefit from a borrower default indemnity provided by BlackRock. BlackRock’s indemnity allows for full replacement of the securities loaned if the collateral received does not cover the value on the securities loaned in the event of borrower default. Each LifePath Master Portfolio could suffer 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.

4. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock for 1940 Act purposes.



BLACKROCK FUNDS III	JUNE 30, 2015	63


Notes to Financial Statements (continued)

MIP, on behalf of the LifePath Master Portfolios, entered into an Investment Advisory Agreement with BlackRock Fund Advisors (“BFA” or the “Manager”), the LifePath Master Portfolios’ investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory services. The Manager is responsible for the management of each LifePath Master Portfolio’s investments and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of each LifePath Master Portfolio. For such services, each LifePath Master Portfolio paid BFA a monthly fee based on a percentage of such LifePath Master Portfolio’s average daily net assets. Each LifePath Master Portfolio pays BFA at an annual rate of 0.35% of the average daily net assets of each respective LifePath Master Portfolio.

MIP, on behalf of the LifePath Master Portfolios, entered into an Administration Agreement with BlackRock Advisors, LLC (“BAL” or the “Administrator”), which has agreed to provide general administration services (other than investment advice and related portfolio activities). BAL, in consideration thereof, has agreed to bear all of the LifePath Master Portfolios’ ordinary operating expenses, excluding, generally, investment advisory fees, distribution fees, brokerage and other expenses related to the execution of portfolio transactions, extraordinary expenses and certain other expenses which are borne by the LifePath Master Portfolios.

From time to time, BAL may waive such fees in whole or in part. Any such waiver will reduce the expenses of the LifePath Master Portfolio and, accordingly, have a favorable impact on its performance. BAL may delegate certain of its administration duties to sub-administrators.

The fees and expenses of MIP’s trustees who are not “interested persons” of MIP, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and the MIP’s independent registered public accounting firm (together, the “independent expenses”) are paid directly by the LifePath Master Portfolios. BFA had contractually agreed to waive investment advisory fees charged to each LifePath Master Portfolio in an amount equal to investment advisory fees and administration fees, if any, received by BFA or BAL, from each affiliated investment company in which the LifePath Master Portfolios invest through April 30, 2016. BFA has also contractually agreed to cap the expenses of the LifePath Master Portfolios at the rate at which the LifePath Master Portfolios pay an advisory fee to BFA by providing an offsetting credit against the investment advisory fees paid by the LifePath Master Portfolios in an amount equal to the independent expenses. These contractual waivers are effective through April 30, 2025. The amounts of the waivers, if any, are shown as fees waived by Manager in the Statements of Operations.

The U.S. Securities and Exchange Commission has issued an exemptive order which permits BTC, an affiliate of the Manager, to serve as securities lending agent for the LifePath Master Portfolios, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending. The LifePath Master Portfolios are responsible for fees in connection with the investment of cash collateral received for securities on loan in a money market fund managed by the Manager or its affiliates, however, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees the LifePath Master Portfolios bears to an annual rate of 0.04% (the “collateral investment fees”).

Pursuant to a securities lending agreement, each LifePath Master Portfolio retains 80% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment fees. In addition, commencing the business day following the date that the aggregate securities lending income earned across certain funds in the Equity-Liquidity Complex in a calendar year exceeds a specified threshold, each LifePath Master Portfolio, pursuant to the securities lending agreement, will retain for the remainder of the calendar year securities lending income in an amount equal to 80% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment fees.

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 fees. The LifePath Master Portfolios retain a portion of securities lending income and remit a remaining portion to BTC as compensation for its services as securities lending agent.

The share of securities lending income earned by the LifePath Master Portfolios is shown as securities lending — affiliated – net in the Statements of Operations. For the six months ended June 30, 2015, the LifePath 2025 Master Portfolio paid BTC $360 in total for securities lending agent services and collateral investment fees.

Each LifePath Master Portfolio may invest its positive cash balances in certain money market funds managed by the Manager or an affiliate. The income earned on these temporary cash investments is shown as income-affiliated in the Statements of Operations.

Certain officers and/or trustees of MIP are officers and/or directors of BlackRock or its affiliates.

5. Purchases and Sales:

For the six months ended June 30, 2015, purchases and sales of investments in the underlying funds and Underlying Master Portfolios, excluding short-term securities, were as follows:


	LifePath 2025 Master Portfolio		LifePath 2035 Master Portfolio		LifePath 2045 Master Portfolio		LifePath 2055 Master Portfolio
Purchases	$	24,793,429	$	14,598,659	$	8,216,987	$	4,525,348
Sales	$	16,002,505	$	10,425,228	$	7,483,468	$	2,995,075



64	BLACKROCK FUNDS III	JUNE 30, 2015


Notes to Financial Statements (concluded)

6. Income Tax Information:

Each LifePath Master Portfolio is classified as a partnership for federal income tax purposes. As such, each investor in the LifePath Master Portfolio is treated as the owner of its proportionate share of net assets, income, expenses and realized and unrealized gains and losses of the LifePath Master Portfolio. Therefore, no federal income tax provision is required. It is intended that each LifePath Master Portfolio’s assets will be managed so an investor in the LifePath Master Portfolio can satisfy the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended.

Each LifePath Master Portfolio 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 LifePath Master Portfolios’ U.S. federal tax returns remains open for each of the four years ended December 31, 2014. The statutes of limitations on the LifePath Master Portfolios’ 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 LifePath Master Portfolios as of June 30, 2015, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the LifePath Master Portfolios’ financial statements.

As of June 30, 2015, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:


	LifePath 2025 Master Portfolio			LifePath 2035 Master Portfolio			LifePath 2045 Master Portfolio			LifePath 2055 Master Portfolio
Tax cost	$	72,338,551		$	59,494,932		$	35,131,395		$	14,477,847

Gross unrealized appreciation		2,069,375			2,167,395			1,464,177			556,957
Gross unrealized depreciation		(771,939	)		(741,575	)		(487,189	)		(199,505	)

Net unrealized appreciation	$	1,297,436		$	1,425,820		$	976,988		$	357,452

7. Bank Borrowings:

MIP, on behalf of the LifePath Master Portfolios, along with certain other funds managed by the Manager and its affiliates (“Participating Funds”), is a party to a 364-day, $2.1 billion credit agreement with a group of lenders, under which the LifePath Master Portfolios may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual LifePath Master Portfolios, the Participating Funds, including the LifePath Master Portfolios, can borrow up to an aggregate commitment amount of $1.6 billion, subject to asset coverage and other limitations as specified in the agreement. The credit agreement has the following terms: a fee of 0.06% 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 2016 unless extended or renewed. Participating Funds paid administration, legal and arrangement fees, which are included in miscellaneous expenses in the Statements of Operations, and along with commitment fees, were allocated among such LifePath Master Portfolios based upon portions of the aggregate commitment available to them and relative net assets of Participating funds. During the six months ended June 30, 2015, the LifePath Master Portfolios did not borrow under the credit agreement.

8. Principal Risks:

In the normal course of business, the LifePath Master Portfolios invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations, including to pay principal and interest when due (issuer credit risk). The value of securities held by the LifePath Master Portfolios may decline in response to certain events, including those directly involving the issuers whose securities are owned by the LifePath Master Portfolios; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency, interest rate and price fluctuations. Similar to issuer credit risk, the LifePath Master Portfolios may be exposed to counterparty credit risk, or the risk that an entity with which the LifePath Master Portfolios have unsettled or open transactions may fail to or be unable to perform on its commitments. The LifePath Master Portfolios manage counterparty credit risk by entering into transactions only with counterparties that the Manager believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the LifePath Master Portfolios to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the LifePath Master Portfolios’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Statements of Assets and Liabilities, less any collateral held by the LifePath Master Portfolios.

9. Subsequent Events:

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



BLACKROCK FUNDS III	JUNE 30, 2015	65


Disclosure of Investment Advisory Agreement

The Board of Trustees of Master Investment Portfolio (the “Master Fund”) met in person on April 21, 2015 (the “April Meeting”) and May 18-20, 2015 (the “May Meeting”) to consider the approval of the investment advisory agreement (the “Agreement”) between the Master Fund, on behalf of LifePath 2025 Master Portfolio, LifePath 2035 Master Portfolio, LifePath 2045 Master Portfolio and LifePath 2055 Master Portfolio (each, a “Master Portfolio” and collectively, the “Master Portfolios”), each a series of the Master Fund, and BlackRock Fund Advisors (the “Manager” or “BlackRock”), the Master Fund’s investment advisor. Each of BlackRock LifePath 2025 Fund, BlackRock LifePath 2035 Fund, BlackRock LifePath 2045 Fund and BlackRock LifePath 2055 Fund (each, a “Portfolio” and collectively, the “Portfolios”), each a series of BlackRock Funds III (the “Fund”), is a “feeder” fund that invests all of its investable assets in the corresponding Master Portfolio. Accordingly, the Board of Trustees of the Fund also considered the approval of the Agreement with respect to each Master Portfolio. For simplicity: (a) the Board of Trustees of the Master Fund and the Board of Trustees of the Fund are referred to herein collectively as the “Board,” and the members are referred to as “Board Members;” and (b) the shareholders of each Portfolio and the interest holders of each Master Portfolio are referred to as “shareholders.”

Activities and Composition of the Board

The Agreement

Pursuant to the 1940 Act, the Board is required to consider the continuation of the Agreement on an annual basis. The Board has four quarterly meetings per year, each extending over two days, a fifth one-day meeting to consider specific information surrounding the consideration of renewing the Agreement, and additional in-person and telephonic meetings as needed. In connection with this year-long deliberative process, the Board assessed, among other things, the nature, extent and quality of the services provided to the Master Portfolios and the Portfolios by BlackRock, BlackRock’s personnel and affiliates, including (as applicable) investment management services; administrative and shareholder services; the oversight of fund service providers; marketing services; risk oversight; compliance; and ability to meet applicable legal and regulatory requirements.

The Board, acting directly and through its committees, considers at each of its meetings, and from time to time as appropriate, factors that are relevant to its annual consideration of the renewal of the Agreement, including the services and support provided by BlackRock to the Master Portfolios, the Portfolios and their shareholders. Among the matters the Board considered were: (a) investment performance for one-year, three-year, five-year and/or since inception periods, as applicable, against peer funds, applicable benchmark, and performance metrics, as applicable, as well as senior management’s and portfolio managers’ analysis of the reasons for any over performance or underperformance of a Master Portfolio/Portfolio relative to its peers, benchmark, and other performance metrics, as applicable; (b) fees, including advisory, administration, if applicable, and other amounts paid to BlackRock and its affiliates by the Master Portfolios and/or the Portfolios for services, such as marketing and distribution, call center and fund accounting; (c) the Master Portfolios’ and /or the Portfolios’ operating expenses and how BlackRock allocates expenses to the Master Portfolios and the Portfolios; (d) the resources devoted to, risk oversight of, and compliance reports relating to, implementation of each Master Portfolio’s and Portfolio’s investment objective(s), policies and restrictions, and meeting new regulatory requirements; (e) the Master Fund’s and the Fund’s compliance with its respective compliance policies and procedures; (f) the nature, cost and character of non-investment management services provided by BlackRock and its affiliates; (g) BlackRock’s and other service providers’ internal controls and risk and compliance oversight mechanisms; (h) BlackRock’s implementation of the proxy voting policies approved by the Board; (i) the use of brokerage commissions and execution quality of portfolio transactions; (j) BlackRock’s implementation of the Master Fund’s and/or the Fund’s valuation and liquidity procedures; (k) an analysis of management fees for products with similar investment mandates across the open-end fund, exchange-traded fund (“ETF”), closed-end fund and institutional account product channels, as applicable, and the similarities and differences between these products and the services provided as compared to the Master Portfolios and/or the Portfolios; (l) BlackRock’s compensation methodology for its investment professionals and the incentives it creates, along with investment professionals’ investments in the fund(s) they manage; and (m) periodic updates on BlackRock’s business.



66	BLACKROCK FUNDS III	JUNE 30, 2015


Disclosure of Investment Advisory Agreement (continued)

Board Considerations in Approving the Agreement

The Approval Process: Prior to the April Meeting, the Board requested and received materials specifically relating to the Agreement. The Board is continuously engaged in a process with its independent legal counsel and BlackRock to review the nature and scope of the information provided to better assist its deliberations. The materials provided in connection with the April Meeting included (a) information independently compiled and prepared by Lipper, Inc. (“Lipper”) on fees and expenses of each Master Portfolio and Portfolio, as applicable, as compared with a peer group of funds as determined by Lipper (“Expense Peers”) and the investment performance of each Portfolio as compared with a peer group of funds as determined by Lipper¹ and the applicable Morningstar Classification; (b) information on the profits realized by BlackRock and its affiliates pursuant to the Agreement and a discussion of fall-out benefits to BlackRock and its affiliates; (c) a general analysis provided by BlackRock concerning investment management fees charged to other clients, such as institutional clients, sub-advised mutual funds, ETFs and closed-end funds, under similar investment mandates, as well as the performance of such other clients, as applicable; (d) review of non-management fees; (e) the existence, impact and sharing of potential economies of scale; (f) a summary of aggregate amounts paid by each Master Portfolio and/or Portfolio to BlackRock; (g) sales and redemption data regarding each Portfolio’s shares; and (h) if applicable, a comparison of management fees to similar BlackRock open-end funds, as classified by Lipper.

At the May Meeting, the Board of the Master Fund, including the Independent Board Members, approved the continuation of the Agreement between the Manager and the Master Fund with respect to each Master Portfolio for a one-year term ending June 30, 2016. The Board of the Fund, including the Independent Board Members, also considered the continuation of the Agreement with respect to each Master Portfolio and found the Agreement to be satisfactory. In approving the continuation of the Agreement, the Board of the Master Fund considered: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of each Master Portfolio, each Portfolio and BlackRock; (c) the advisory fee and the cost of the services and profits to be realized by BlackRock and its affiliates from their relationship with the Master Portfolios and the Portfolios; (d) each Portfolio’s costs to investors compared to the costs of Expense Peers and performance compared to the relevant performance comparison as previously discussed; (e) the sharing of potential economies of scale; (f) fall-out benefits to BlackRock and its affiliates as a result of its relationship with the Master Portfolios and the Portfolios; and (g) other factors deemed relevant by the Board Members.

The Board also considered other matters it deemed important to the approval process, such as payments made to BlackRock or its affiliates relating to the distribution of Portfolio shares, securities lending and cash management, services related to the valuation and pricing of portfolio holdings of each Master Portfolio, direct and indirect benefits to BlackRock and its affiliates from their relationship with the Master Portfolios and the Portfolios and advice from independent legal counsel with respect to the review process and materials submitted for the Board’s review. The Board noted the willingness of BlackRock personnel to engage in open, candid discussions with the Board. The Board did not identify any particular information as determinative, and each Board Member may have attributed different weights to the various items considered.

A. Nature, Extent and Quality of the Services Provided by BlackRock: The Board, including the Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of each Portfolio. Throughout the year, the Board compared each Portfolio’s performance to the performance of a comparable group of mutual funds, relevant benchmark, and performance metrics, as applicable. The Board met with BlackRock’s senior management personnel responsible for investment activities, including the senior investment officers. The Board also reviewed the materials provided by each Master Portfolio’s portfolio management team discussing the relevant Master Portfolio’s performance and the Master Portfolio’s investment objective(s), strategies and outlook.

Funds are ranked by Lipper in quartiles, ranging from first to fourth, where first is the most desirable quartile position and fourth is the least desirable.



BLACKROCK FUNDS III	JUNE 30, 2015	67


Disclosure of Investment Advisory Agreement (continued)

B. The Investment Performance of the Master Portfolios, the Portfolios and BlackRock: The Board, including the Independent Board Members, also reviewed and considered the performance history of each Master Portfolio and Portfolio, as applicable. The Board noted that each Portfolio’s investment results correspond directly to the investment results of the applicable Master Portfolio. In preparation for the April Meeting, the Board worked with its independent legal counsel, BlackRock and Lipper to develop a template for, and was provided with, reports independently prepared by Lipper, which included a comprehensive analysis of each Portfolio’s performance. The Board also reviewed a narrative and statistical analysis of the Lipper data that was prepared by BlackRock. In connection with its review, the Board received and reviewed information regarding the investment performance of each Portfolio as compared to other funds in its applicable Lipper category and the applicable Morningstar Classification. The Board was provided with a description of the methodology used by Lipper to select peer funds and periodically meets with Lipper representatives to review its methodology. The Board and its Performance Oversight and Contract Committee regularly review, and meet with Master Portfolio management to discuss, the performance of each Master Portfolio and Portfolio, as applicable, throughout the year.

BlackRock believes that the Morningstar Performance Universe is an appropriate performance metric for each of the Portfolios.

The Board noted that for each of the one-year, three-year and since-inception periods reported, each of BlackRock LifePath 2025 Fund and BlackRock LifePath 2035 Fund ranked in the second, fourth and fourth quartiles, respectively, against its Morningstar Performance Universe. The Board noted the improved performance of each of these Portfolios during the one-year period. The Board and BlackRock reviewed and discussed the reasons for the underperformance of these Portfolios during the three-year and since-inception periods. With respect to each of these Portfolios, the Board was informed that, among other things, asset allocation was the primary driver of underperformance relative to the Portfolio’s Morningstar Performance Universe. Given each Portfolio’s more measured glidepath, performance has lagged somewhat given the substantial rally of equity and equity-like asset classes over the three-year and since-inception periods.

The Board noted that for the one-year, three-year and since-inception periods reported, BlackRock LifePath 2045 Fund ranked in the second, fourth and third quartiles, respectively, against its Morningstar Performance Universe. The Board noted the Portfolio’s improved performance during the one-year period. The Board and BlackRock reviewed and discussed the reasons for the Portfolio’s underperformance during the three-year and since-inception periods. The Board was informed that, among other things, asset allocation was the primary driver of underperformance relative to the Portfolio’s Morningstar Performance Universe. Given the Portfolio’s more measured glidepath, performance has lagged somewhat given the substantial rally of equity and equity-like asset classes over the three-year and since-inception periods.

The Board and BlackRock also discussed BlackRock’s strategy for improving the performance of LifePath 2025 Master Portfolio/BlackRock LifePath 2025 Fund, LifePath 2035 Master Portfolio/BlackRock LifePath 2035 Fund and LifePath 2045 Master Portfolio/BlackRock LifePath 2045 Fund and BlackRock’s commitment to providing the resources necessary to assist the portfolio managers of these Master Portfolios in seeking to do so.

The Board noted that for the one-year, three-year and since-inception periods reported, LifePath 2055 Fund ranked in the second, third and second quartiles, respectively, against its Morningstar Performance Universe. The Board and BlackRock reviewed and discussed the reasons for the Portfolio’s underperformance during the three-year period and the Board noted that they will monitor the Portfolio’s performance.

C. Consideration of the Advisory/Management Fees and the Cost of the Services and Profits to be Realized by BlackRock and its Affiliates from their Relationship with the Master Portfolios and the Portfolios: The Board, including the Independent Board Members, reviewed each Master Portfolio’s contractual advisory fee rate compared with the other funds in the corresponding Portfolio’s Lipper category. The contractual advisory fee rate is shown before taking into account any reimbursements or fee waivers. The Board also compared each Portfolio’s total expense ratio, as well as each Master Portfolio’s actual advisory fee rate, to those of other funds in the corresponding Portfolio’s Lipper category. The total expense ratio represents a fund’s total net operating expenses, including any 12b-1 or non-12b-1 service fees. The total expense ratio gives effect to any expense reimbursements or fee waivers that benefit a fund, and the actual advisory fee rate gives effect to any advisory fee reimbursements or waivers that benefit a fund. The Board considered the services provided and the fees charged by BlackRock and its affiliates to other types of clients with similar investment mandates, as applicable, including institutional accounts and sub-advised mutual funds.



68	BLACKROCK FUNDS III	JUNE 30, 2015


Disclosure of Investment Advisory Agreement (continued)

Portfolios and the Portfolios. The Board reviewed BlackRock’s profitability with respect to each Master Portfolio and Portfolio, as applicable, and other funds the Board currently oversees for the year ended December 31, 2014 compared to available aggregate profitability data provided for the two prior years. The Board reviewed BlackRock’s profitability with respect to certain other U.S. fund complexes managed by the Manager and/or its affiliates. The Board reviewed BlackRock’s assumptions and methodology of allocating expenses in the profitability analysis, noting the inherent limitations in allocating costs among various advisory products. The Board recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, precision of expense allocations and business mix. As a result, calculating and comparing profitability at individual fund levels is difficult.

In addition, the Board considered the cost of the services provided to the Master Portfolios and the Portfolios by BlackRock, and BlackRock’s and its affiliates’ profits relating to the management and distribution of the Master Portfolios and the Portfolios and the other funds advised by BlackRock and its affiliates. As part of its analysis, the Board reviewed BlackRock’s methodology in allocating its costs to the management of the Master Portfolios and the Portfolios. The Board may periodically receive and review information from independent third parties as part of its annual evaluation. BlackRock retained an independent third party to evaluate its cost allocation methodologies in the context of BlackRock’s 1940 Act Fund business. The Board considered the results of that evaluation in connection with BlackRock’s profitability reporting. The Board also considered whether BlackRock has the financial resources necessary to attract and retain high quality investment management personnel to perform its obligations under the Agreement and to continue to provide the high quality of services that is expected by the Board. The Board further considered factors including but not limited to BlackRock’s commitment of time, assumption of risk and liability profile in servicing the Master Portfolios and the Portfolios in contrast to what is required of BlackRock with respect to other products with similar investment mandates across the open-end fund, ETF, closed-end fund, sub-advised mutual fund and institutional account product channels, as applicable.

The Board noted that the varying fee structures for fund of funds can limit the value of advisory fee comparisons.

The Board also noted that LifePath 2025 Master Portfolio’s contractual advisory fee rate ranked in the third quartile, and that the actual advisory fee rate and the corresponding Portfolio’s total expense ratio ranked in the first and fourth quartiles, respectively, relative to the Portfolio’s Expense Peers.

The Board also noted that LifePath 2035 Master Portfolio’s contractual advisory fee rate ranked in the fourth quartile, and that the actual advisory fee rate and the corresponding Portfolio’s total expense ratio ranked in the first and fourth quartiles, respectively, relative to the Portfolio’s Expense Peers. The Board determined that the Portfolio’s total expense ratio was appropriate in light of the median total expense ratio paid by its Expense Peers.

The Board also noted that LifePath 2045 Master Portfolio’s contractual advisory fee rate ranked in the fourth quartile, and that the actual advisory fee rate and the corresponding Portfolio’s total expense ratio ranked in the first and third quartiles, respectively, relative to the Portfolio’s Expense Peers. The Board determined that the Portfolio’s total expense ratio was appropriate in light of the median total expense ratio paid by its Expense Peers.

The Board also noted that LifePath 2055 Master Portfolio’s contractual advisory fee rate ranked second out of three funds, and that the actual advisory fee rate and the corresponding Portfolio’s total expense ratio ranked first out of three funds and in the third quartile, respectively, relative to the Portfolio’s Expense Peers. The Board determined that the Portfolio’s total expense ratio was appropriate in light of the median total expense ratio paid by its Expense Peers.

The Board also noted that, with respect to each Master Portfolio, BlackRock has contractually agreed to waive its advisory fee at the Master Portfolio level in an amount equal to the advisory and administration fees, if any, received by it or its affiliates from funds in which the Master Portfolio invests, and that BlackRock and its affiliates have contractually agreed to reimburse or otherwise compensate each Master Portfolio/Portfolio for the fees and expenses of the Independent Board Members, counsel to the Independent Board Members and the Master Portfolio’s/Portfolio’s independent registered public accounting firm.

D. Economies of Scale: The Board, including the Independent Board Members, considered the extent to which economies of scale might be realized as the assets of the Master Portfolios and the Portfolios increase, as well as the existence of expense caps, as applicable. The Board also considered the extent to which the Master Portfolios and the Portfolios benefit from such economies and whether there should be changes in the advisory fee rate or breakpoint structure in order to enable the Master Portfolios and the Portfolios to participate in these economies of scale, for example through the use of breakpoints in the advisory fee based upon the asset level of the Master Portfolios. In their consideration, the Board Members took into account the existence of any expense caps and further considered the continuation and/or implementation, as applicable, of such caps.



BLACKROCK FUNDS III	JUNE 30, 2015	69


Disclosure of Investment Advisory Agreement (concluded)

increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates as service providers to the Master Portfolios and the Portfolios, including for administrative, distribution, securities lending and cash management services. The Board also considered BlackRock’s overall operations and its efforts to expand the scale of, and improve the quality of, its operations. The Board also noted that BlackRock may use and benefit from third party research obtained by soft dollars generated by certain registered fund transactions to assist in managing all or a number of its other client accounts. The Board further noted that it had considered the investment by BlackRock’s funds in affiliated ETFs without any offset against the management fees payable by the funds to BlackRock.

Conclusion

The Board of the Master Fund, including the Independent Board Members, approved the continuation of the Agreement between the Manager and the Master Fund, with respect to each Master Portfolio, for a one-year term ending June 30, 2016. Based upon its evaluation of all of the aforementioned factors in their totality, the Board of the Master Fund, including the Independent Board Members, was satisfied that the terms of the Agreement were fair and reasonable and in the best interest of each Master Portfolio and its shareholders. The Board of the Fund, including the Independent Board Members, also considered the continuation of the Agreement with respect to each Master Portfolio and found the Agreement to be satisfactory. In arriving at its decision to approve the Agreement, the Board of the Master Fund did not identify any single factor or group of factors as all-important or controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were also assisted by the advice of independent legal counsel in making this determination. The contractual fee arrangements for the Master Portfolios reflect the results of several years of review by the Board Members and predecessor Board Members, and discussions between such Board Members (and predecessor Board Members) and BlackRock. As a result, the Board Members’ conclusions may be based in part on their consideration of these arrangements in prior years.



70	BLACKROCK FUNDS III	JUNE 30, 2015


Officers and Trustees

Rodney D. Johnson, Chair of the Board and Trustee

David O. Beim, Trustee

Collette Chilton, Trustee

Frank J. Fabozzi, Trustee

Dr. Matina S. Horner, Trustee

Herbert I. London, Trustee

Cynthia A. Montgomery, Trustee

Barbara G. Novick, Trustee

Joseph P. Platt, Trustee

Robert C. Robb, Jr., Trustee

Toby Rosenblatt, Trustee

Mark Stalnecker, Trustee

Kenneth L. Urish, Trustee

Frederick W. Winter, Trustee

John M. Perlowski, President and Chief Executive Officer

Richard Hoerner, CFA, Vice President

Jennifer McGovern, Vice President

Neal Andrews, Chief Financial Officer

Jay Fife, Treasurer

Charles Park, Chief Compliance Officer

Fernanda Piedra, Anti-Money Laundering Compliance Officer

Benjamin Archibald, Secretary

Effective March 1, 2015, Charles Park resigned as Anti-Money Laundering Compliance Officer of the Trust/MIP and Fernanda Piedra became Anti-Money Laundering Compliance Officer of the Trust/MIP.

Effective May 18, 2015, Ian MacKinnon resigned as Trustee of the Trust/MIP.



BLACKROCK FUNDS III	JUNE 30, 2015	71


Additional Information

General Information

Householding

The LifePath Funds will mail only one copy of shareholder documents, including prospectuses, annual and semi-annual reports 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 LifePath Funds at (800) 441-7762.

Availability of Quarterly Schedule of Investments

The LifePath Fund/LifePath Master Portfolio files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each LifePath Fund’s/LifePath Master Portfolio’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. Each LifePath Fund’s/LifePath Master Portfolio’s Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762.

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that each LifePath Fund/LifePath Master Portfolio uses to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling (800) 441-7762; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.

Availability of Proxy Voting Record

Information about how each LifePath Fund/LifePath Master Portfolio voted proxies relating to securities held in each LifePath Fund’s/LifePath Master Portfolio’s portfolio during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com or by calling (800) 441-7762 and (2) on the SEC’s website at http://www.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 http://www.blackrock.com for more information.

Shareholder Privileges

Account 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.



72	BLACKROCK FUNDS III	JUNE 30, 2015


Additional Information (concluded)

BlackRock Privacy Principles



BLACKROCK FUNDS III	JUNE 30, 2015	73

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 a LifePath Fund unless preceded or accompanied by that LifePath 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.

LOGO


LPincre-6/15-SAR

JUNE 30, 2015

SEMI-ANNUAL REPORT (UNAUDITED)

BlackRock Funds III

^Ø	BlackRock LifePath^® Retirement Fund

^Ø	BlackRock LifePath^® 2020 Fund

^Ø	BlackRock LifePath^® 2030 Fund

^Ø	BlackRock LifePath^® 2040 Fund

^Ø	BlackRock LifePath^® 2050 Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee


Table of Contents


	Page
The Markets in Review		3
Semi-Annual Report:
Fund Summaries		4
About Fund Performance		16
Disclosure of Expenses		17
Financial Statements:
Statements of Assets and Liabilities		18
Statements of Operations		19
Statements of Changes in Net Assets		20
Fund Financial Highlights		25
Fund Notes to Financial Statements		50
Master Portfolio Information		56
Master Portfolio Financial Statements:
Schedules of Investments		58
Statements of Assets and Liabilities		68
Statements of Operations		69
Statements of Changes in Net Assets		70
Master Portfolio Financial Highlights		75
Master Portfolio Notes to Financial Statements		80
Disclosure of Investment Advisory Agreement		85
Officers and Directors		90
Additional Information		91

LOGO



2	BLACKROCK FUNDS III	JUNE 30, 2015

The Markets in Review

Dear Shareholder,

Sincerely,

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

LOGO

Rob Kapito

President, BlackRock Advisors, LLC


Total Returns as of June 30, 2015
	6-month			12-month
U.S. large cap equities (S&P 500^® Index)		1.23	%		7.42	%
U.S. small cap equities (Russell 2000^® Index)		4.75			6.49
International equities (MSCI Europe, Australasia, Far East Index)		5.52			(4.22	)
Emerging market equities (MSCI Emerging Markets Index)		2.95			(5.12	)
3-month Treasury bills (BofA Merrill Lynch 3-Month U.S. Treasury Bill Index)		0.01			0.02
U.S. Treasury securities (BofA Merrill Lynch 10-Year U.S. Treasury Index)		(0.51	)		3.79
U.S. investment-grade bonds (Barclays U.S. Aggregate Bond Index)		(0.10	)		1.86
Tax-exempt municipal bonds (S&P Municipal Bond Index)		0.01			3.00
U.S. high yield bonds (Barclays U.S. Corporate High Yield 2% Issuer Capped Index)		2.53			(0.39	)
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.



		THIS PAGE NOT PART OF YOUR FUND REPORT				3


Fund Summary as of June 30, 2015				BlackRock LifePath Funds

Fund Management Commentary

How did each Fund perform?

•

The BlackRock LifePath Funds with target dates of 2020, 2030, 2040 and 2050 and the BlackRock LifePath Retirement Fund (together, the “LifePath Funds”) invest in their respective LifePath Master Portfolio.

•

For the six-month period ended June 30, 2015, the LifePath Funds underperformed the custom benchmark across various LifePath Fund target dates, with the exception of LifePath Retirement and LifePath 2020 Fund’s Class K Shares, LifePath 2040 Fund’s Institutional Shares and LifePath 2050 Fund’s Investor A Shares, each of which performed in line with the custom benchmark and LifePath 2030, LifePath 2040 and LifePath 2050 Funds’ Class K Shares and LifePath 2050 Fund’s Institutional Shares, each of which outperformed the custom benchmark. The returns for the LifePath Funds include fund expenses. The custom benchmarks have no expenses associated with performance.

What factors influenced performance?

•

Equity markets outperformed fixed income markets during the period. As a result, the LifePath Funds with longer time horizons (2040 and 2050) generated higher returns on an absolute basis given their larger allocations to equity investments.

•

In addition, many of the underlying active strategies held within the LifePath Funds provided strong performance. One of the largest contributors to positive performance was the LifePath Funds’ investment in the International Tilts Master Portfolio, which outperformed in the first half of 2015 due to strong regional stock selection in Japan and Europe. In addition, a long position in Japan was a strong contributor to outperformance. A focus within Europe on companies with strong value and quality characteristics was also rewarded with strong performance.

•

Conversely, the LifePath Funds’ investment in the Commodity Strategies Fund detracted from performance, as did its investment in the Emerging Markets Fund. Energy equities and exposure to mining stocks were the largest detractors from Commodity Strategies Fund’s performance as the mining sector was the worst-performing equity sector. Mining stocks were negatively impacted by weaker economic data from China. The Emerging Markets Fund’s underperformance was driven by overweights in markets and sectors with higher correlations to developed markets that generated slower growth during the first half of 2015. Stock selection in China also detracted as the Chinese stock market sold off in June, with the largest negative impact on the high quality, high-risk/return, and domestic cyclical stocks preferred by the manager.

Describe recent fund activity.

•

Describe fund positioning at period end.

•

At period end, each of the LifePath Funds was invested according to its respective strategic allocation benchmark within tolerance limits.



4	BLACKROCK FUNDS III	JUNE 30, 2015


		LifePath Funds

Glide Path Evolution

asset allocation targets of each LifePath Fund, and determine whether any changes are required to enable each LifePath Fund to achieve its investment objective.



BLACKROCK FUNDS III	JUNE 30, 2015	5


		BlackRock LifePath Retirement Fund

Investment Objective

The investment objective of BlackRock LifePath^® Retirement Fund (“LifePath Retirement Fund” or the “LifePath Fund”) is to seek to provide for retirement outcomes based on quantitatively measured risk. In pursuit of this objective, LifePath Retirement Fund will be broadly diversified across global asset classes.

Effective March 31, 2015, the LifePath^® Retirement Portfolio changed its name to the BlackRock LifePath^® Retirement Fund.

Total Return Based on a $10,000 Investment

LOGO

Assuming maximum sales charges, transaction costs and other operating expenses, including advisory fees, if any. Institutional Shares do not have a sales charge.

The LifePath Fund compares its performance to that of a customized weighted index (the “LifePath Retirement Fund Custom Benchmark”), comprised of the indexes indicated below, which reflects the investment advisor’s changes to the benchmark’s weightings over time. The investment advisor adjusts the weightings of these indexes periodically based upon its evaluation and adjustment of the LifePath Fund’s asset allocation strategy. The weightings are presented annually but they are adjusted quarterly.

LifePath Fund’s custom benchmark consists of the following:


Period	Barclays U.S. Aggregate Bond Index			Barclays U.S. Treasury Inflation Protected Securities (TIPS) Index			Cohen & Steers Realty Majors Index			Bloomberg Commodity Index³			FTSE EPRA/NAREIT Developed Real Estate Index			MSCI ACWI ex-USA IMI Index			MSCI EAFE Index			Russell 1000^® Index			Russell 2000^® Index			S&P MidCap 400^® Index			S&P 500^® Index			S&P SmallCap 600^® Index
7/01/05 to 6/30/06		58.5	%		5.1	%		1.3	%		N/A			N/A			N/A			9.2	%		N/A			N/A			3.6	%		20.5	%		1.8	%
7/01/06 to 6/30/07		52.2			9.9			2.8			N/A			N/A			N/A			10.2			N/A			N/A			3.6			19.5			1.8
7/01/07 to 6/30/08		52.8			9.2			2.7			N/A			N/A			11.0	%		N/A			N/A			N/A			3.7			18.8			1.8
7/01/08 to 6/30/09		53.0			9.0			N/A			N/A			2.0	%		11.3			N/A			N/A			N/A			4.5			18.1			2.1
7/01/09 to 6/30/10		52.9			9.1			N/A			N/A			1.5			10.7			N/A			N/A			N/A			4.9			18.7			2.2
7/01/10 to 6/30/11		53.0			9.1			N/A			N/A			0.9			10.9			N/A			N/A			N/A			4.9			19.1			2.1
7/01/11 to 6/30/12		52.9			9.0			N/A			N/A			0.5			11.7			N/A			19.8	%		3.9	%		0.4			1.6			0.2
7/01/12 to 6/30/13		52.9			9.1			N/A			2.8	%		0.2			10.5			N/A			20.3			4.2			N/A			N/A			N/A
7/01/13 to 6/30/14		52.9			9.1			N/A			3.8			N/A			10.0			N/A			19.6			4.6			N/A			N/A			N/A
7/01/14 to 6/30/15		51.9			8.9			N/A			3.8			0.4			10.6			N/A			20.5			3.9			N/A			N/A			N/A

Prior to July 1, 2014, the Bloomberg Commodity Index was known as the Dow Jones-UBS Commodity Index.

See “About Fund Performance” on page 16 for descriptions of the indexes.



6	BLACKROCK FUNDS III	JUNE 30, 2015


		BlackRock LifePath Retirement Fund

Performance Summary for the Period Ended June 30, 2015


				Average Annual Total Returns
				1 Year						5 Years						10 Years
	6-Month Total Returns			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge
Institutional		0.84	%		0.83	%		N/A			6.82	%		N/A			5.00	%		N/A
Investor A		0.74			0.64			(4.64	)%		6.58			5.44	%		4.74			4.18	%
Investor C		0.41			(0.10	)		(1.01	)		5.75			5.75			4.00			4.00
Class K		1.04			1.31			N/A			7.23			N/A			5.32			N/A
Class R		0.61			0.33			N/A			6.29			N/A			4.49			N/A
LifePath Retirement Fund Custom Benchmark		1.04			1.11			N/A			7.18			N/A			5.53			N/A
Barclays U.S. Aggregate Bond Index		(0.10	)		1.86			N/A			3.35			N/A			4.44			N/A
Barclays U.S. TIPS Index		0.34			(1.73	)		N/A			3.29			N/A			4.13			N/A
Bloomberg Commodity Index		(1.56	)		(23.71	)		N/A			(3.91	)		N/A			(2.62	)		N/A
FTSE EPRA/NAREIT Developed Real Estate Index		(3.20	)		(0.36	)		N/A			11.58			N/A			5.49			N/A
MSCI ACWI ex-USA IMI Index		4.59			(4.97	)		N/A			8.00			N/A			5.79			N/A
Russell 1000^® Index		1.71			7.37			N/A			17.58			N/A			8.13			N/A
Russell 2000^® Index		4.75			6.49			N/A			17.08			N/A			8.40			N/A

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

Past performance is not indicative of future results.



BLACKROCK FUNDS III	JUNE 30, 2015	7


		BlackRock LifePath 2020 Fund

Investment Objective

The investment objective of BlackRock LifePath^® 2020 Fund (“LifePath 2020 Fund” or the “LifePath Fund”) is to seek to provide for retirement outcomes based on quantitatively measured risk. In pursuit of this objective, LifePath 2020 Fund will be broadly diversified across global asset classes with allocations becoming more conservative over time.

Effective March 31, 2015, the LifePath^® 2020 Portfolio changed its name to the BlackRock LifePath^® 2020 Fund.

Total Return Based on a $10,000 Investment

LOGO

Assuming maximum sales charges, transaction costs and other operating expenses, including advisory fees, if any. Institutional Shares do not have a sales charge.

The LifePath Fund compares its performance to that of a customized weighted index (the “LifePath 2020 Fund Custom Benchmark”), comprised of the indexes indicated below, which reflects the investment advisor’s changes to the benchmark’s weightings over time. The investment advisor adjusts the weightings of these indexes periodically based upon its evaluation and adjustment of the LifePath Fund’s asset allocation strategy. The weightings are presented annually but they are adjusted quarterly.

LifePath Fund’s custom benchmark consists of the following:


Period	Barclays U.S. Aggregate Bond Index			Barclays U.S. Treasury Inflation Protected Securities (TIPS) Index			Cohen & Steers Realty Majors Index			Bloomberg Commodity Index³			FTSE EPRA/NAREIT Developed Real Estate Index			MSCI ACWI ex-USA IMI Index			MSCI EAFE Index			Russell 1000^® Index			Russell 2000^® Index			S&P MidCap 400^® Index			S&P 500^® Index			S&P SmallCap 600^® Index
7/01/05 to 6/30/06		58.5	%		5.1	%		1.3	%		N/A			N/A			N/A			9.2	%		N/A			N/A			3.6	%		20.5	%		1.8	%
7/01/06 to 6/30/07		52.2			9.9			2.8			N/A			N/A			N/A			10.2			N/A			N/A			3.6			19.5			1.8
7/01/07 to 6/30/08		52.8			9.2			2.7			N/A			N/A			11.0	%		N/A			N/A			N/A			3.7			18.8			1.8
7/01/08 to 6/30/09		53.0			9.0			N/A			N/A			2.0	%		11.3			N/A			N/A			N/A			4.5			18.1			2.1
7/01/09 to 6/30/10		52.9			9.1			N/A			N/A			1.5			10.7			N/A			N/A			N/A			4.9			18.7			2.2
7/01/10 to 6/30/11		53.0			9.1			N/A			N/A			0.9			10.9			N/A			N/A			N/A			4.9			19.1			2.1
7/01/11 to 6/30/12		52.9			9.0			N/A			N/A			0.5			11.7			N/A			19.8	%		3.9	%		0.4			1.6			0.2
7/01/12 to 6/30/13		52.9			9.1			N/A			2.8	%		0.2			10.5			N/A			20.3			4.2			N/A			N/A			N/A
7/01/13 to 6/30/14		41.7			6.8			N/A			3.8			2.6			14.3			N/A			27.0			3.8			N/A			N/A			N/A
7/01/14 to 6/30/15		41.1			6.7			N/A			3.8			2.9			14.9			N/A			27.2			3.4			N/A			N/A			N/A

Prior to July 1, 2014, the Bloomberg Commodity Index was known as the Dow Jones-UBS Commodity Index.

See “About Fund Performance” on page 16 for descriptions of the indexes.



8	BLACKROCK FUNDS III	JUNE 30, 2015


		BlackRock LifePath 2020 Fund

Performance Summary for the Period Ended June 30, 2015


				Average Annual Total Returns
				1 Year						5 Years						10 Years
	6-Month Total Returns			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge
Institutional		1.10	%		1.06	%		N/A			8.52	%		N/A			5.09	%		N/A
Investor A		1.02			0.82			(4.48	)%		8.26			7.10	%		4.83			4.27	%
Investor C		0.65			0.07			(0.83	)		7.44			7.44			4.05			4.05
Class K		1.31			1.42			N/A			8.88			N/A			5.40			N/A
Class R		0.86			0.52			N/A			7.98			N/A			4.54			N/A
LifePath 2020 Fund Custom Benchmark		1.27			1.18			N/A			8.88			N/A			5.79			N/A
Barclays U.S. Aggregate Bond Index		(0.10	)		1.86			N/A			3.35			N/A			4.44			N/A
Barclays U.S. TIPS Index		0.34			(1.73	)		N/A			3.29			N/A			4.13			N/A
Bloomberg Commodity Index		(1.56	)		(23.71	)		N/A			(3.91	)		N/A			(2.62	)		N/A
FTSE EPRA/NAREIT Developed Real Estate Index		(3.20	)		(0.36	)		N/A			11.58			N/A			5.49			N/A
MSCI ACWI ex-USA IMI Index		4.59			(4.97	)		N/A			8.00			N/A			5.79			N/A
Russell 1000^® Index		1.71			7.37			N/A			17.58			N/A			8.13			N/A
Russell 2000^® Index		4.75			6.49			N/A			17.08			N/A			8.40			N/A

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

Past performance is not indicative of future results.



BLACKROCK FUNDS III	JUNE 30, 2015	9


		BlackRock LifePath 2030 Fund

Investment Objective

The investment objective of BlackRock LifePath^® 2030 Fund (“LifePath 2030 Fund” or the “LifePath Fund”) is to seek to provide for retirement outcomes based on quantitatively measured risk. In pursuit of this objective, LifePath 2030 Fund will be broadly diversified across global asset classes with allocations becoming more conservative over time.

Effective March 31, 2015, the LifePath^® 2030 Portfolio changed its name to the BlackRock LifePath^® 2030 Fund.

Total Return Based on a $10,000 Investment

LOGO

Assuming maximum sales charges, transaction costs and other operating expenses, including advisory fees, if any. Institutional Shares do not have a sales charge.

The LifePath Fund compares its performance to that of a customized weighted index (the “LifePath 2030 Fund Custom Benchmark”), comprised of the indexes indicated below, which reflects the investment advisor’s changes to the benchmark’s weightings over time. The investment advisor adjusts the weightings of these indexes periodically based upon its evaluation and adjustment of the LifePath Fund’s asset allocation strategy. The weightings are presented annually but they are adjusted quarterly.

LifePath Fund’s custom benchmark consists of the following:


Period	Barclays U.S. Aggregate Bond Index			Barclays U.S. Treasury Inflation Protected Securities (TIPS) Index			Cohen & Steers Realty Majors Index			Bloomberg Commodity Index³			FTSE EPRA/NAREIT Developed Real Estate Index			MSCI ACWI ex-USA IMI Index			MSCI EAFE Index			Russell 1000^® Index			Russell 2000^® Index			S&P MidCap 400^® Index			S&P 500^® Index			S&P SmallCap 600^® Index
7/01/05 to 6/30/06		19.3	%		1.3	%		2.5	%		N/A			N/A			N/A			19.5	%		N/A			N/A			6.0	%		48.5	%		2.9	%
7/01/06 to 6/30/07		17.1			2.7			5.2			N/A			N/A			N/A			20.6			N/A			N/A			6.4			44.7			3.3
7/01/07 to 6/30/08		18.0			2.7			5.5			N/A			N/A			21.7	%		N/A			N/A			N/A			6.5			42.4			3.2
7/01/08 to 6/30/09		20.0			2.9			N/A			N/A			6.1	%		22.2			N/A			N/A			N/A			6.8			38.8			3.2
7/01/09 to 6/30/10		21.6			3.2			N/A			N/A			7.0			20.6			N/A			N/A			N/A			6.6			38.0			3.0
7/01/10 to 6/30/11		22.6			3.3			N/A			N/A			5.9			20.9			N/A			N/A			N/A			6.2			38.4			2.7
7/01/11 to 6/30/12		24.5			3.6			N/A			N/A			6.0			20.8			N/A			38.4	%		2.9	%		0.5			3.1			0.2
7/01/12 to 6/30/13		26.7			3.9			N/A			2.9	%		5.8			19.6			N/A			38.2			2.9			N/A			N/A			N/A
7/01/13 to 6/30/14		28.5			4.2			N/A			3.8			5.7			19.2			N/A			35.6			3.0			N/A			N/A			N/A
7/01/14 to 6/30/15		24.5			3.7			N/A			3.9			6.9			21.1			N/A			37.3			2.6			N/A			N/A			N/A

Prior to July 1, 2014, the Bloomberg Commodity Index was known as the Dow Jones-UBS Commodity Index.

See “About Fund Performance” on page 16 for descriptions of the indexes.



10	BLACKROCK FUNDS III	JUNE 30, 2015


		BlackRock LifePath 2030 Fund

Performance Summary for the Period Ended June 30, 2015


				Average Annual Total Returns
				1 Year						5 Years						10 Years
	6-Month Total Returns			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge
Institutional		1.52	%		1.32	%		N/A			10.09	%		N/A			5.29	%		N/A
Investor A		1.39			1.03			(4.28	)%		9.82			8.64	%		5.03			4.46	%
Investor C		1.04			0.37			(0.51	)		9.00			9.00			4.22			4.22
Class K		1.73			1.73			N/A			10.48			N/A			5.61			N/A
Class R		1.29			0.84			N/A			9.54			N/A			4.71			N/A
LifePath 2030 Fund Custom Benchmark		1.58			1.29			N/A			10.48			N/A			6.10			N/A
Barclays U.S. Aggregate Bond Index		(0.10	)		1.86			N/A			3.35			N/A			4.44			N/A
Barclays U.S. TIPS Index		0.34			(1.73	)		N/A			3.29			N/A			4.13			N/A
Bloomberg Commodity Index		(1.56	)		(23.71	)		N/A			(3.91	)		N/A			(2.62	)		N/A
FTSE EPRA/NAREIT Developed Real Estate Index		(3.20	)		(0.36	)		N/A			11.58			N/A			5.49			N/A
MSCI ACWI ex-USA IMI Index		4.59			(4.97	)		N/A			8.00			N/A			5.79			N/A
Russell 1000^® Index		1.71			7.37			N/A			17.58			N/A			8.13			N/A
Russell 2000^® Index		4.75			6.49			N/A			17.08			N/A			8.40			N/A

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

Past performance is not indicative of future results.



BLACKROCK FUNDS III	JUNE 30, 2015	11


		BlackRock LifePath 2040 Fund

Investment Objective

The investment objective of BlackRock LifePath^® 2040 Fund (“LifePath 2040 Fund” or the “LifePath Fund”) is to seek to provide for retirement outcomes based on quantitatively measured risk. In pursuit of this objective, LifePath 2040 Fund will be broadly diversified across global asset classes with allocations becoming more conservative over time.

Effective March 31, 2015, the LifePath^® 2040 Portfolio changed its name to the BlackRock LifePath^® 2040 Fund.

Total Return Based on a $10,000 Investment

LOGO

Assuming maximum sales charges, transaction costs and other operating expenses, including advisory fees, if any. Institutional Shares do not have a sales charge.

The LifePath Fund compares its performance to that of a customized weighted index (the “LifePath 2040 Fund Custom Benchmark”), comprised of the indexes indicated below, which reflects the investment advisor’s changes to the benchmark’s weightings over time. The investment advisor adjusts the weightings of these indexes periodically based upon its evaluation and adjustment of the LifePath Fund’s asset allocation strategy. The weightings are presented annually but they are adjusted quarterly.

LifePath Fund’s custom benchmark consists of the following:


Period	Barclays U.S. Aggregate Bond Index			Barclays U.S. Treasury Inflation Protected Securities (TIPS) Index			Cohen & Steers Realty Majors Index			Bloomberg Commodity Index³			FTSE EPRA/NAREIT Developed Real Estate Index			MSCI ACWI ex-USA IMI Index			MSCI EAFE Index			Russell 1000^® Index			Russell 2000^® Index			S&P MidCap 400^® Index			S&P 500^® Index			S&P SmallCap 600^® Index
7/01/05 to 6/30/06		9.1	%		N/A			2.8	%		N/A			N/A			N/A			21.2	%		N/A			N/A			6.8	%		56.8	%		3.3	%
7/01/06 to 6/30/07		7.7			N/A			5.9			N/A			N/A			N/A			23.5			N/A			N/A			7.2			52.0			3.7
7/01/07 to 6/30/08		8.3			0.1	%		6.4			N/A			N/A			18.8	%		6.1			N/A			N/A			7.4			49.3			3.6
7/01/08 to 6/30/09		9.5			1.0			N/A			N/A			7.4	%		25.7			N/A			N/A			N/A			7.6			45.2			3.6
7/01/09 to 6/30/10		11.0			1.1			N/A			N/A			8.9			24.0			N/A			N/A			N/A			7.1			44.7			3.2
7/01/10 to 6/30/11		11.8			1.2			N/A			N/A			7.7			24.5			N/A			N/A			N/A			6.6			45.3			2.9
7/01/11 to 6/30/12		13.9			1.5			N/A			N/A			8.1			24.2			N/A			45.4	%		2.5	%		0.6			3.6			0.2
7/01/12 to 6/30/13		16.4			1.7			N/A			2.9	%		8.1			23.3			N/A			45.3			2.3			N/A			N/A			N/A
7/01/13 to 6/30/14		18.2			1.8			N/A			3.9			8.2			23.1			N/A			42.5			2.3			N/A			N/A			N/A
7/01/14 to 6/03/15		10.8			1.2			N/A			4.0			10.5			26.2			N/A			45.2			2.1			N/A			N/A			N/A

Prior to July 1, 2014, the Bloomberg Commodity Index was known as the Dow Jones-UBS Commodity Index.

See “About Fund Performance” on page 16 for descriptions of the indexes.



12	BLACKROCK FUNDS III	JUNE 30, 2015


		BlackRock LifePath 2040 Fund

Performance Summary for the Period Ended June 30, 2015


				Average Annual Total Returns
				1 Year						5 Years						10 Years
	6-Month Total Returns			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge
Institutional		1.85	%		1.47	%		N/A			11.35	%		N/A			5.37	%		N/A
Investor A		1.69			1.26			(4.06	)%		11.06			9.87	%		5.11			4.54	%
Investor C		1.37			0.50			(0.38	)		10.25			10.25			4.27			4.27
Class K		1.99			1.86			N/A			11.76			N/A			5.70			N/A
Class R		1.60			0.97			N/A			10.78			N/A			4.77			N/A
LifePath 2040 Fund Custom Benchmark		1.81			1.36			N/A			11.74			N/A			6.28			N/A
Barclays U.S. Aggregate Bond Index		(0.10	)		1.86			N/A			3.35			N/A			4.44			N/A
Barclays U.S. TIPS Index		0.34			(1.73	)		N/A			3.29			N/A			4.13			N/A
Bloomberg Commodity Index		(1.56	)		(23.71	)		N/A			(3.91	)		N/A			(2.62	)		N/A
FTSE EPRA/NAREIT Developed Real Estate Index		(3.20	)		(0.36	)		N/A			11.58			N/A			5.49			N/A
MSCI ACWI ex-USA IMI Index		4.59			(4.97	)		N/A			8.00			N/A			5.79			N/A
Russell 1000^® Index		1.71			7.37			N/A			17.58			N/A			8.13			N/A
Russell 2000^® Index		4.75			6.49			N/A			17.08			N/A			8.40			N/A

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

Past performance is not indicative of future results.



BLACKROCK FUNDS III	JUNE 30, 2015	13


		BlackRock LifePath 2050 Fund


Investment Objective

The investment objective of BlackRock LifePath^® 2050 Fund (“LifePath 2050 Fund” or the “LifePath Fund”) is to seek to provide for retirement outcomes based on quantitatively measured risk. In pursuit of this objective, LifePath 2050 Fund will be broadly diversified across global asset classes with allocations becoming more conservative over time.

Effective March 31, 2015, the LifePath^® 2050 Portfolio changed its name to the BlackRock LifePath^® 2050 Fund.


Total Return Based on a $10,000 Investment

LOGO

Assuming maximum sales charges, transaction costs and other operating expenses, including advisory fees, if any. Institutional Shares do not have a sales charge.

The LifePath Fund compares its performance to that of a customized weighted index (the “LifePath 2050 Fund Custom Benchmark”), comprised of the indexes indicated below, which reflects the investment advisor’s changes to the benchmark’s weightings over time. The investment advisor adjusts the weightings of these indexes periodically based upon its evaluation and adjustment of the LifePath Fund’s asset allocation strategy. The weightings are presented annually but they are adjusted quarterly.

Commencement of operations.

LifePath Fund’s custom benchmark consists of the following:


Period	Barclays U.S. Aggregate Bond Index			Bloomberg Commodity Index³			FTSE EPRA/NAREIT Developed Real Estate Index			MSCI ACWI ex-USA IMI Index			Russell 1000^® Index			Russell 2000^® Index			S&P MidCap 400^® Index			S&P 500^® Index			S&P SmallCap 600^® Index
6/30/08 to 6/30/09		1.0	%		N/A			5.4	%		30.0	%		N/A			N/A			10.6	%		48.0	%		5.0	%
7/01/09 to 6/30/10		1.0			N/A			10.5			27.2			N/A			N/A			8.2			49.4			3.7
7/01/10 to 6/30/11		1.7			N/A			9.5			27.7			N/A			N/A			7.2			50.8			3.1
7/01/11 to 6/30/12		4.1			N/A			10.1			27.2			51.4	%		2.2	%		0.6			4.1			0.3
7/01/12 to 6/30/13		9.3			3.9	%		10.3			26.5			48.3			1.7			N/A			N/A			N/A
7/01/14 to 6/30/15		4.7			4.1			12.2			28.5			48.5			2.0			N/A			N/A			N/A

Prior to July 1, 2014, the Bloomberg Commodity Index was known as the Dow Jones-UBS Commodity Index.

See “About Fund Performance” on page 16 for descriptions of the indexes.



14	BLACKROCK FUNDS III	JUNE 30, 2015


		BlackRock LifePath 2050 Fund

Performance Summary for the Period Ended June 30, 2015


				Average Annual Total Returns
				1 Year						5 Years						Since Inception¹
	6-Month Total Returns			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge
Institutional		1.95	%		1.61	%		N/A			12.42	%		N/A			5.41	%		N/A
Investor A		1.83			1.29			(4.03	)%		12.14			10.93	%		5.15			4.34	%
Investor C		1.43			0.57			(0.32	)		11.30			11.30			4.17			4.17
Class K		2.12			1.93			N/A			12.82			N/A			5.77			N/A
Class R		1.67			1.04			N/A			11.87			N/A			4.71			N/A
LifePath 2050 Fund Custom Benchmark		1.87			1.38			N/A			12.82			N/A			6.41			N/A
Barclays U.S. Aggregate Bond Index		(0.10	)		1.86			N/A			3.35			N/A			4.59			N/A
Bloomberg Commodity Index		(1.56	)		(23.71	)		N/A			(3.91	)		N/A			(10.91	)		N/A
FTSE EPRA/NAREIT Developed Real Estate Index		(3.20	)		(0.36	)		N/A			11.58			N/A			4.54			N/A
MSCI ACWI ex-USA IMI Index		4.59			(4.97	)		N/A			8.00			N/A			1.87			N/A
Russell 1000^® Index		1.71			7.37			N/A			17.58			N/A			9.59			N/A
Russell 2000^® Index		4.75			6.49			N/A			17.08			N/A			10.44			N/A

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

Past performance is not indicative of future results.

The LifePath Fund commenced operations on June 30, 2008.



BLACKROCK FUNDS III	JUNE 30, 2015	15


About Fund Performance

•

Institutional 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 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. Prior to May 3, 2010, Investor C Shares’ performance results are those of Institutional Shares restated to reflect Investor C Shares’ fees.

•

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. Prior to May 30, 2008 for LifePath Retirement, LifePath 2020, LifePath 2030 and LifePath 2040 Funds, Class K Shares’ performance results are those of Institutional Shares restated to reflect Class K Shares’ fees.

•

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. Prior to May 3, 2010, Class R Shares’ performance results are those of Institutional Shares restated to reflect Class R Shares’ fees.

BlackRock Advisors, LLC (the “Administrator”), each LifePath Funds’ administrator, waived and/or reimbursed a portion of each LifePath Fund’s expenses. Without such waiver, each LifePath Fund’s performance would have been lower.

The LifePath Funds’ custom benchmarks are hypothetical representations of the performance of the respective LifePath Fund’s asset classes according to their weightings as of the most recent quarter-end. The weightings of the various indexes that are included in the LifePath Funds’ custom benchmarks are adjusted quarterly to reflect the LifePath Funds’ changing asset allocations over time. As of June 30, 2015, the following indexes are used to calculate the LifePath Fund’s custom benchmarks: Barclays U.S. Aggregate Bond Index, Barclays U.S. TIPS Index, Bloomberg Commodity Index, FTSE EPRA/NAREIT Developed Real Estate Index, MSCI ACWI ex-USA IMI Index, Russell 1000^® Index and Russell 2000^® Index.

The Barclays U.S. Aggregate Bond Index is a widely recognized unmanaged market-weighted index, comprised of investment-grade corporate bonds rated BBB or better, mortgages and U.S. Treasury and U.S. Government agency issues with at least one year to maturity. The Barclays U.S. TIPS Index is an unmanaged index that measures the performance of the inflation-protected public obligations of the U.S. Treasury. The Bloomberg Commodity Index is a broadly diversified index that allows investors to track commodity futures through a single, simple measure. The FTSE EPRA/NAREIT Developed Real Estate Index is a global market capitalization weighted index composed of listed real estate securities from developed market countries in North America, Europe, and Asia. The MSCI ACWI ex-USA IMI Index is a free float-adjusted market capitalization index designed to measure the combined equity market performance of developed and emerging market countries, excluding the United States. The Russell 1000^® Index is an index that measures the performance of the large cap segment of the U.S. equity universe. It is a subset of the Russell 3000^® Index and includes approximately 1,000 of the largest securities based on a combination of their market capitalization and current index membership. The index represents approximately 92% of the total market capitalization of the Russell 3000^® Index. The Russell 2000^® Index is an unmanaged index that is a subset of the Russell 3000^® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.



16	BLACKROCK FUNDS III	JUNE 30, 2015


Disclosure of Expenses

The expense examples provide 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 LifePath Fund and their share class under the heading entitled “Expenses Paid During the Period.”


Expense Examples


	Actual						Hypothetical²
	Beginning Account Value January 1, 2015		Ending Account Value June 30, 2015		Expenses Paid During the Period¹		Beginning Account Value January 1, 2015		Ending Account Value June 30, 2015		Expenses Paid During the Period¹		Annualized Expense Ratio
LifePath Retirement Fund
Institutional	$	1,000.00	$	1,009.30	$	3.69	$	1,000.00	$	1,021.12	$	3.71		0.74	%
Investor A	$	1,000.00	$	1,007.40	$	4.93	$	1,000.00	$	1,019.89	$	4.96		0.99	%
Investor C	$	1,000.00	$	1,004.10	$	8.65	$	1,000.00	$	1,016.17	$	8.70		1.74	%
Class K	$	1,000.00	$	1,010.40	$	2.04	$	1,000.00	$	1,022.76	$	2.06		0.41	%
Class R	$	1,000.00	$	1,006.10	$	6.17	$	1,000.00	$	1,018.65	$	6.21		1.24	%
LifePath 2020 Fund
Institutional	$	1,000.00	$	1,011.00	$	3.69	$	1,000.00	$	1,021.12	$	3.71		0.74	%
Investor A	$	1,000.00	$	1,010.20	$	4.93	$	1,000.00	$	1,019.89	$	4.96		0.99	%
Investor C	$	1,000.00	$	1,006.50	$	8.66	$	1,000.00	$	1,016.17	$	8.70		1.74	%
Class K	$	1,000.00	$	1,013.10	$	1.95	$	1,000.00	$	1,022.86	$	1.96		0.39	%
Class R	$	1,000.00	$	1,008.60	$	6.18	$	1,000.00	$	1,018.65	$	6.21		1.24	%
LifePath 2030 Fund
Institutional	$	1,000.00	$	1,015.20	$	3.55	$	1,000.00	$	1,021.27	$	3.56		0.71	%
Investor A	$	1,000.00	$	1,013.90	$	4.79	$	1,000.00	$	1,020.03	$	4.81		0.96	%
Investor C	$	1,000.00	$	1,010.40	$	8.52	$	1,000.00	$	1,016.31	$	8.55		1.71	%
Class K	$	1,000.00	$	1,017.30	$	1.80	$	1,000.00	$	1,023.01	$	1.81		0.36	%
Class R	$	1,000.00	$	1,012.90	$	6.04	$	1,000.00	$	1,018.79	$	6.06		1.22	%
LifePath 2040 Fund
Institutional	$	1,000.00	$	1,018.50	$	3.35	$	1,000.00	$	1,021.47	$	3.36		0.67	%
Investor A	$	1,000.00	$	1,016.90	$	4.65	$	1,000.00	$	1,020.18	$	4.66		0.93	%
Investor C	$	1,000.00	$	1,013.70	$	8.39	$	1,000.00	$	1,016.46	$	8.40		1.68	%
Class K	$	1,000.00	$	1,019.90	$	1.65	$	1,000.00	$	1,023.16	$	1.66		0.32	%
Class R	$	1,000.00	$	1,016.00	$	5.90	$	1,000.00	$	1,018.94	$	5.91		1.18	%
LifePath 2050 Fund
Institutional	$	1,000.00	$	1,019.50	$	3.35	$	1,000.00	$	1,021.47	$	3.36		0.66	%
Investor A	$	1,000.00	$	1,018.30	$	4.60	$	1,000.00	$	1,020.23	$	4.61		0.92	%
Investor C	$	1,000.00	$	1,014.30	$	8.34	$	1,000.00	$	1,016.51	$	8.35		1.67	%
Class K	$	1,000.00	$	1,021.20	$	1.60	$	1,000.00	$	1,023.21	$	1.61		0.31	%
Class R	$	1,000.00	$	1,016.70	$	5.85	$	1,000.00	$	1,018.99	$	5.86		1.17	%

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



BLACKROCK FUNDS III	JUNE 30, 2015	17


Statements of Assets and Liabilities


June 30, 2015 (Unaudited)	BlackRock LifePath Retirement Fund			BlackRock LifePath 2020 Fund			BlackRock LifePath 2030 Fund			BlackRock LifePath 2040 Fund			BlackRock LifePath 2050 Fund

Assets
Investments at value — from the applicable LifePath Master Portfolio¹	$	318,358,083		$	715,843,903		$	683,768,489		$	578,894,547		$	187,821,695
Receivables:
Withdrawals from the LifePath Master Portfolio		14,305,020			23,302,689			24,326,535			48,133,224			8,271,175
Capital shares sold		208,353			529,675			633,104			1,458,837			784,286

Total assets		332,871,456			739,676,267			708,728,128			628,486,608			196,877,156


Liabilities
Payables:
Capital shares redeemed		14,513,373			23,832,364			24,959,639			49,592,061			9,055,461
Administration fees		107,890			301,910			289,786			257,662			79,480
Service and distribution fees		27,999			74,562			75,124			56,128			16,766
Professional fees		7,979			7,901			7,910			7,927			8,011
Income dividends		20,387			50,867			45,582			26,704			8,647
Capital gains distributions		70,519			175,217			150,190			75,952			16,423

Total liabilities		14,748,147			24,442,821			25,528,231			50,016,434			9,184,788

Net Assets	$	318,123,309		$	715,233,446		$	683,199,897		$	578,470,174		$	187,692,368


Net Assets Consist of
Paid-in capital	$	281,799,251		$	621,498,809		$	617,842,795		$	480,942,713		$	172,855,195
Undistributed (distributions in excess of) net investment income		(1,431,879	)		(2,691,913	)		(1,176,446	)		(320,560	)		34,996
Accumulated net realized gain (loss) allocated from the LifePath Master Portfolio		(196,100	)		(12,424,649	)		(13,880,795	)		(3,267,950	)		5,432,281
Net unrealized appreciation (depreciation) allocated from the LifePath Master Portfolio		37,952,037			108,851,199			80,414,343			101,115,971			9,369,896

Net Assets	$	318,123,309		$	715,233,446		$	683,199,897		$	578,470,174		$	187,692,368


Net Asset Value
Institutional:
Net assets	$	183,212,090		$	355,149,370		$	324,552,613		$	309,803,325		$	109,059,189

Shares outstanding²		16,709,103			22,868,359			22,157,687			16,860,371			5,542,829

Net asset value	$	10.96		$	15.53		$	14.65		$	18.37		$	19.68

Investor A:
Net assets	$	124,123,205		$	333,326,426		$	333,101,813		$	248,432,158		$	75,117,405

Shares outstanding²		12,581,180			23,025,163			23,436,603			14,449,560			3,822,683

Net asset value	$	9.87		$	14.48		$	14.21		$	17.19		$	19.65

Investor C:
Net assets	$	1,527,085		$	2,990,658		$	3,867,285		$	2,693,374		$	777,836

Shares outstanding²		140,665			194,620			267,708			148,183			39,890

Net asset value	$	10.86		$	15.37		$	14.45		$	18.18		$	19.50

Class K:
Net assets	$	8,391,505		$	20,243,258		$	19,031,811		$	16,076,751		$	1,523,813

Shares outstanding²		767,244			1,306,883			1,300,060			870,745			77,156

Net asset value	$	10.94		$	15.49		$	14.64		$	18.46		$	19.75

Class R:
Net assets	$	869,424		$	3,523,734		$	2,646,375		$	1,464,566		$	1,214,125

Shares outstanding²		79,778			227,905			182,005			80,105			61,907

Net asset value	$	10.90		$	15.46		$	14.54		$	18.28		$	19.61

¹ Cost — from the applicable LifePath Master Portfolio	$	280,406,046		$	606,992,704		$	603,354,146		$	477,778,576		$	178,451,799


² No par value, unlimited number of shares authorized.


Statements of Operations


Six Months Ended June 30, 2015 (Unaudited)	BlackRock LifePath Retirement Fund			BlackRock LifePath 2020 Fund			BlackRock LifePath 2030 Fund			BlackRock LifePath 2040 Fund			BlackRock LifePath 2050 Fund

Investment Income
Net investment income allocated from the applicable LifePath Master Portfolio:
Interest — affiliated	$	2,476,469		$	4,492,331		$	2,416,281		$	653,623		$	56,527
Dividends — affiliated		1,376,716			4,438,359			6,257,258			7,091,695			2,191,463
Securities lending — affiliated — net		6,087			18,723			26,143			26,938			10,007
Expenses		(1,004,662	)		(2,332,119	)		(2,212,607	)		(1,923,206	)		(557,351	)
Fees waived		551,064			1,366,699			1,418,255			1,327,422			397,396

Total income		3,405,674			7,983,993			7,905,330			7,176,472			2,098,042


Fund Expenses
Administration — Institutional		534,720			1,095,317			1,018,310			1,016,392			291,807
Administration — Investor A		337,140			893,391			869,530			663,249			184,848
Administration — Investor C		3,482			7,230			8,203			6,251			1,713
Administration — Class K		2,689			8,020			7,892			4,488			1,046
Administration — Class R		2,173			7,436			6,904			3,316			2,921
Service — Investor A		168,549			446,716			435,127			331,970			92,589
Service and distribution — Investor C		6,975			14,468			16,465			12,535			3,440
Service and distribution — Class R		2,171			7,453			6,910			3,321			2,922
Professional		9,231			9,231			9,231			9,231			9,231
Miscellaneous		325			325			325			325			325

Total expenses		1,067,455			2,489,587			2,378,897			2,051,078			590,842
Less fees waived by the administrator		(36,406	)		(9,231	)		(9,231	)		(9,231	)		(9,231	)

Total expenses after fees waived and/or reimbursed		1,031,049			2,480,356			2,369,666			2,041,847			581,611

Net investment income		2,374,625			5,503,637			5,535,664			5,134,625			1,516,431


Realized and Unrealized Gain (Loss) Allocated from the LifePath Master Portfolio
Net realized gain from investments, financial futures contracts, swaps and foreign currency transactions		5,929,968			18,100,925			20,202,020			19,322,760			6,061,214
Net change in unrealized depreciation on investments, financial futures contracts, swaps and foreign currency translations		(4,695,024	)		(12,087,499	)		(11,409,728	)		(9,373,330	)		(3,923,506	)

Net realized and unrealized gain		1,234,944			6,013,426			8,792,292			9,949,430			2,137,708

Net Increase in Net Assets Resulting from Operations	$	3,609,569		$	11,517,063		$	14,327,956		$	15,084,055		$	3,654,139


Statements of Changes in Net Assets


	BlackRock LifePath Retirement Fund
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	2,374,625		$	6,420,547
Net realized gain		5,929,968			30,328,592
Net change in unrealized appreciation (depreciation)		(4,695,024	)		(15,887,725	)

Net increase in net assets resulting from operations		3,609,569			20,861,414


Distributions to Shareholders From¹
Net investment income:
Institutional		(1,595,548	)		(4,404,816	)
Investor A		(1,024,557	)		(2,300,181	)
Investor C		(5,324	)		(8,193	)
Class K		(56,190	)		(75,012	)
Class R		(4,868	)		(16,034	)
Net realized gain:
Institutional		(2,036,096	)		(20,795,931	)
Investor A		(1,434,557	)		(13,315,477	)
Investor C		(15,729	)		(110,551	)
Class K		(86,899	)		(275,163	)
Class R		(9,056	)		(89,990	)

Decrease in net assets resulting from distributions to shareholders		(6,268,824	)		(41,391,348	)


Capital Share Transactions
Net decrease in net assets derived from capital share transactions		(58,558,416	)		(104,392,035	)


Net Assets
Total decrease in net assets		(61,217,671	)		(124,921,969	)
Beginning of period		379,340,980			504,262,949

End of period	$	318,123,309		$	379,340,980

Distributions in excess of net investment income, end of period	$	(1,431,879	)	$	(1,120,017	)

¹ Distributions for annual periods determined in accordance with federal income tax regulations.


Statements of Changes in Net Assets


	BlackRock LifePath 2020 Fund
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	5,503,637		$	14,100,507
Net realized gain		18,100,925			82,240,605
Net change in unrealized appreciation (depreciation)		(12,087,499	)		(48,739,044	)

Net increase in net assets resulting from operations		11,517,063			47,602,068


Distributions to Shareholders From¹
Net investment income:
Institutional		(3,196,662	)		(8,895,767	)
Investor A		(2,566,745	)		(5,462,819	)
Investor C		(9,593	)		(17,875	)
Class K		(150,268	)		(191,706	)
Class R		(18,999	)		(36,574	)
Net realized gain:
Institutional		(4,071,539	)		(51,643,775	)
Investor A		(3,871,435	)		(38,760,115	)
Investor C		(32,592	)		(293,404	)
Class K		(218,574	)		(973,553	)
Class R		(38,204	)		(274,368	)

Decrease in net assets resulting from distributions to shareholders		(14,174,611	)		(106,549,956	)


Capital Share Transactions
Net decrease in net assets derived from capital share transactions		(154,942,432	)		(168,709,426	)


Net Assets
Total decrease in net assets		(157,599,980	)		(227,657,314	)
Beginning of period		872,833,426			1,100,490,740

End of period	$	715,233,446		$	872,833,426

Distributions in excess of net investment income, end of period	$	(2,691,913	)	$	(2,253,283	)

¹ Distributions for annual periods determined in accordance with federal income tax regulations.


Statements of Changes in Net Assets


	BlackRock LifePath 2030 Fund
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	5,535,664		$	13,273,261
Net realized gain		20,202,020			89,981,059
Net change in unrealized appreciation (depreciation)		(11,409,728	)		(56,323,113	)

Net increase in net assets resulting from operations		14,327,956			46,931,207


Distributions to Shareholders From¹
Net investment income:
Institutional		(2,959,656	)		(8,716,567	)
Investor A		(2,373,721	)		(5,155,801	)
Investor C		(12,756	)		(19,700	)
Class K		(145,229	)		(210,259	)
Class R		(14,499	)		(38,613	)
Net realized gain:
Institutional		(3,938,416	)		(55,632,148	)
Investor A		(3,915,955	)		(42,009,267	)
Investor C		(44,541	)		(348,719	)
Class K		(215,523	)		(1,143,468	)
Class R		(30,267	)		(361,514	)

Decrease in net assets resulting from distributions to shareholders		(13,650,563	)		(113,636,056	)


Capital Share Transactions
Net decrease in net assets derived from capital share transactions		(132,646,559	)		(163,153,810	)


Net Assets
Total decrease in net assets		(131,969,166	)		(229,858,659	)
Beginning of period		815,169,063			1,045,027,722

End of period	$	683,199,897		$	815,169,063

Distributions in excess of net investment income, end of period	$	(1,176,446	)	$	(1,206,249	)

¹ Distributions for annual periods determined in accordance with federal income tax regulations.


Statements of Changes in Net Assets


	BlackRock LifePath 2040 Fund
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	5,134,625		$	11,459,541
Net realized gain		19,322,760			84,054,967
Net change in unrealized appreciation (depreciation)		(9,373,330	)		(54,209,797	)

Net increase in net assets resulting from operations		15,084,055			41,304,711


Distributions to Shareholders From¹
Net investment income:
Institutional		(2,846,242	)		(7,938,976	)
Investor A		(1,792,521	)		(3,937,683	)
Investor C		(8,425	)		(13,501	)
Class K		(112,437	)		(110,778	)
Class R		(7,788	)		(15,968	)
Net realized gain:
Institutional		(3,816,001	)		(55,495,147	)
Investor A		(2,863,234	)		(33,978,812	)
Investor C		(29,125	)		(269,943	)
Class K		(171,275	)		(629,230	)
Class R		(15,766	)		(149,272	)

Decrease in net assets resulting from distributions to shareholders		(11,662,814	)		(102,539,310	)


Capital Share Transactions
Net decrease in net assets derived from capital share transactions		(131,730,637	)		(119,373,132	)


Net Assets
Total decrease in net assets		(128,309,396	)		(180,607,731	)
Beginning of period		706,779,570			887,387,301

End of period	$	578,470,174		$	706,779,570

Distributions in excess of net investment income, end of period	$	(320,560	)	$	(687,772	)

¹ Distributions for annual periods determined in accordance with federal income tax regulations.


Statements of Changes in Net Assets


	BlackRock LifePath 2050 Fund
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	1,516,431		$	2,706,534
Net realized gain		6,061,214			18,096,514
Net change in unrealized appreciation (depreciation)		(3,923,506	)		(12,262,296	)

Net increase in net assets resulting from operations		3,654,139			8,540,752


Distributions to Shareholders From¹
Net investment income:
Institutional		(863,356	)		(1,788,582	)
Investor A		(461,049	)		(928,790	)
Investor C		(2,353	)		(3,293	)
Class K		(13,294	)		(22,890	)
Class R		(5,955	)		(16,004	)
Net realized gain:
Institutional		(862,599	)		(13,592,448	)
Investor A		(552,353	)		(8,614,787	)
Investor C		(5,769	)		(72,196	)
Class K		(11,136	)		(152,131	)
Class R		(8,957	)		(147,025	)

Decrease in net assets resulting from distributions to shareholders		(2,786,821	)		(25,338,146	)


Capital Share Transactions
Net increase (decrease) in net assets derived from capital share transactions		4,688,625			(32,842,244	)


Net Assets
Total increase (decrease) in net assets		5,555,943			(49,639,638	)
Beginning of period		182,136,425			231,776,063

End of period	$	187,692,368		$	182,136,425

Undistributed (distributions in excess of) net investment income, end of period	$	34,996		$	(135,428	)

¹ Distributions for annual periods determined in accordance with federal income tax regulations.


Financial Highlights		BlackRock LifePath Retirement Fund


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	11.07		$	11.72		$	11.80		$	11.39		$	11.55		$	10.80

Net investment income¹		0.08			0.18			0.16			0.20			0.27			0.23
Net realized and unrealized gain		0.02			0.38			0.57			0.77			0.18			0.76

Net increase from investment operations		0.10			0.56			0.73			0.97			0.45			0.99

Distributions from:²
Net investment income		(0.09	)		(0.19	)		(0.16	)		(0.21	)		(0.26	)		(0.22	)
Net realized gain		(0.12	)		(1.02	)		(0.65	)		(0.35	)		(0.35	)		(0.02	)

Total distributions		(0.21	)		(1.21	)		(0.81	)		(0.56	)		(0.61	)		(0.24	)

Net asset value, end of period	$	10.96		$	11.07		$	11.72		$	11.80		$	11.39		$	11.55


Total Return³
Based on net asset value		0.84%	⁴		4.75%			6.25%			8.61%			3.96%			9.33%


Ratios to Average Net Assets⁵
Total expenses		0.75%	^6,7,8		0.75%	^7,8		0.76%	^7,8		0.78%	^7,8		0.77%	^7,8		1.11%

Total expenses after fees waived and/or reimbursed		0.74%	^6,7,8		0.75%	^7,8		0.75%	^7,8		0.78%	^7,8		0.77%	^7,8		0.76%

Net investment income		1.43%	^6,7,8		1.52%	^7,8		1.34%	^7,8		1.70%	^7,8		2.27%	^7,8		2.10%


Supplemental Data
Net assets, end of period (000)	$	183,212		$	234,280		$	342,615		$	390,150		$	431,982		$	490,419

Portfolio turnover rate of the LifePath Master Portfolio		12%	⁹		14%	⁹		17%	⁹		4%	¹⁰		4%	¹⁰		4%	¹⁰

Based on average shares outstanding.

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

Where applicable, assumes the reinvestment of distributions.

⁴

Aggregate total return.

⁵

Includes the LifePath Fund’s share of its corresponding LifePath Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the year ended December 31, 2010, which include gross expenses.

⁶

Annualized.

⁷

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.31%, 0.31%, 0.30%, 0.29% and 0.30% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁸

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.10%

0.08%

⁹

¹⁰

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 13%, 20% and 14% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights (continued)		BlackRock LifePath Retirement Fund


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	9.99		$	10.69		$	10.84		$	10.50		$	10.71		$	10.03

Net investment income¹		0.06			0.14			0.12			0.16			0.22			0.19
Net realized and unrealized gain		0.02			0.35			0.51			0.72			0.16			0.71

Net increase from investment operations		0.08			0.49			0.63			0.88			0.38			0.90

Distributions from:²
Net investment income		(0.08	)		(0.17	)		(0.13	)		(0.19	)		(0.24	)		(0.20	)
Net realized gain		(0.12	)		(1.02	)		(0.65	)		(0.35	)		(0.35	)		(0.02	)

Total distributions		(0.20	)		(1.19	)		(0.78	)		(0.54	)		(0.59	)		(0.22	)

Net asset value, end of period	$	9.87		$	9.99		$	10.69		$	10.84		$	10.50		$	10.71


Total Return³
Based on net asset value		0.74%	⁴		4.56%			5.94%			8.46%			3.60%			9.12%


Ratios to Average Net Assets⁵
Total expenses		1.00%	^6,7,8		1.01%	^7,8		1.01%	^7,8		1.03%	^7,8		1.02%	^7,8		1.37%

Total expenses after fees waived and/or reimbursed		0.99%	^6,7,8		1.00%	^7,8		1.00%	^7,8		1.03%	^7,8		1.02%	^7,8		1.02%

Net investment income		1.19%	^6,7,8		1.27%	^7,8		1.08%	^7,8		1.47%	^7,8		2.03%	^7,8		1.86%


Supplemental Data
Net assets, end of period (000)	$	124,123		$	139,853		$	155,402		$	189,898		$	183,967		$	181,297

Portfolio turnover rate of the LifePath Master Portfolio		12%	⁹		14%	⁹		17%	⁹		4%	¹⁰		4%	¹⁰		4%	¹⁰

Based on average shares outstanding.

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

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

⁴

Aggregate total return.

⁵

⁶

Annualized.

⁷

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.31%, 0.33%, 0.30%, 0.29% and 0.30% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁸

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.10%

0.08%

⁹

¹⁰

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 13%, 20% and 14% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights (continued)		BlackRock LifePath Retirement Fund


	Investor C
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period May 3, 2010¹ to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period May 3, 2010¹ to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	10.97		$	11.64		$	11.76		$	11.36		$	11.55		$	11.22

Net investment income²		0.03			0.07			0.04			0.08			0.17			0.09
Net realized and unrealized gain		0.02			0.36			0.56			0.77			0.16			0.37

Net increase from investment operations		0.05			0.43			0.60			0.85			0.33			0.46

Distributions from:³
Net investment income		(0.04	)		(0.08	)		(0.07	)		(0.10	)		(0.17	)		(0.11	)
Net realized gain		(0.12	)		(1.02	)		(0.65	)		(0.35	)		(0.35	)		(0.02	)

Total distributions		(0.16	)		(1.10	)		(0.72	)		(0.45	)		(0.52	)		(0.13	)

Net asset value, end of period	$	10.86		$	10.97		$	11.64		$	11.76		$	11.36		$	11.55


Total Return⁴
Based on net asset value		0.41%	⁵		3.70%			5.12%			7.55%			2.86%			4.22%	⁵


Ratios to Average Net Assets⁶
Total expenses		1.76%	^7,8,9		1.76%	^8,9		1.77%	^8,9		1.78%	^8,9		1.78%	^8,9		2.11%	⁷

Total expenses after fees waived and/or reimbursed		1.74%	^7,8,9		1.75%	^8,9		1.76%	^8,9		1.78%	^8,9		1.78%	^8,9		1.77%	⁷

Net investment income		0.45%	^7,8,9		0.56%	^8,9		0.33%	^8,9		0.70%	^8,9		1.42%	^8,9		1.23%⁷


Supplemental Data
Net assets, end of period (000)	$	1,527		$	1,295		$	511		$	135		$	55		$	21

Portfolio turnover rate of the LifePath Master Portfolio		12%	¹⁰		14%	¹⁰		17%	¹⁰		4%	¹¹		4%	¹¹		4%	¹¹

Commencement of operations.

Based on average shares outstanding.

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

⁴

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

⁵

Aggregate total return.

⁶

⁷

Annualized.

⁸

⁹

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.10%

0.08%

¹⁰

¹¹

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 13%, 20% and 14% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights (continued)		BlackRock LifePath Retirement Fund


	Class K
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	11.05		$	11.69		$	11.78		$	11.37		$	11.54		$	10.78

Net investment income¹		0.10			0.22			0.20			0.25			0.32			0.28
Net realized and unrealized gain		0.02			0.39			0.56			0.77			0.17			0.76

Net increase from investment operations		0.12			0.61			0.76			1.02			0.49			1.04

Distributions from:²
Net investment income		(0.11	)		(0.23	)		(0.20	)		(0.26	)		(0.31	)		(0.26	)
Net realized gain		(0.12	)		(1.02	)		(0.65	)		(0.35	)		(0.35	)		(0.02	)

Total distributions		(0.23	)		(1.25	)		(0.85	)		(0.61	)		(0.66	)		(0.28	)

Net asset value, end of period	$	10.94		$	11.05		$	11.69		$	11.78		$	11.37		$	11.54


Total Return³
Based on net asset value		1.04%	⁴		5.24%			6.54%			9.03%			4.27%			9.82%


Ratios to Average Net Assets⁵
Total expenses		0.42%	^6,7,8		0.40%	^7,8		0.40%	^7,8		0.43%	^7,8		0.44%	^7,8		0.76%

Total expenses after fees waived and/or reimbursed		0.41%	^6,7,8		0.40%	^7,8		0.40%	^7,8		0.43%	^7,8		0.43%	^7,8		0.41%

Net investment income		1.87%	^6,7,8		1.86%	^7,8		1.67%	^7,8		2.07%	^7,8		2.69%	^7,8		2.49%


Supplemental Data
Net assets, end of period (000)	$	8,392		$	3,019		$	3,675		$	7,378		$	4,309		$	769

Portfolio turnover rate of the LifePath Master Portfolio		12%	⁹		14%	⁹		17%	⁹		4%	¹⁰		4%	¹⁰		4%	¹⁰

Based on average shares outstanding.

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

Where applicable, assumes the reinvestment of distributions.

⁴

Aggregate total return.

⁵

⁶

Annualized.

⁷

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.32%, 0.33%, 0.30%, 0.30% and 0.29% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁸

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.10%

0.08%

⁹

¹⁰

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 13%, 20% and 14% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights (concluded)		BlackRock LifePath Retirement Fund


	Class R
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period May 3, 2010¹ to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period May 3, 2010¹ to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	11.01		$	11.65		$	11.75		$	11.36		$	11.54		$	11.22

Net investment income²		0.05			0.12			0.10			0.17			0.21			0.14
Net realized and unrealized gain		0.02			0.38			0.55			0.76			0.17			0.36

Net increase from investment operations		0.07			0.50			0.65			0.93			0.38			0.50

Distributions from:³
Net investment income		(0.06	)		(0.12	)		(0.10	)		(0.19	)		(0.21	)		(0.16	)
Net realized gain		(0.12	)		(1.02	)		(0.65	)		(0.35	)		(0.35	)		(0.02	)

Total distributions		(0.18	)		(1.14	)		(0.75	)		(0.54	)		(0.56	)		(0.18	)

Net asset value, end of period	$	10.90		$	11.01		$	11.65		$	11.75		$	11.36		$	11.54


Total Return⁴
Based on net asset value		0.61%	⁵		4.25%			5.61%			8.26%			3.32%			4.55%	⁵


Ratios to Average Net Assets⁶
Total expenses		1.25%	^7,8,9		1.25%	^8,9		1.26%	^8,9		1.27%	^8,9		1.28%	^8,9		1.61%	⁷

Total expenses after fees waived and/or reimbursed		1.24%	^7,8,9		1.25%	^8,9		1.25%	^8,9		1.26%	^8,9		1.27%	^8,9		1.26%	⁷

Net investment income		0.95%	^7,8,9		0.98%	^8,9		0.85%	^8,9		1.38%	^8,9		1.76%	^8,9		1.84%⁷


Supplemental Data
Net assets, end of period (000)	$	869		$	895		$	2,060		$	2,609		$	41		$	33

Portfolio turnover rate of the LifePath Master Portfolio		12%	¹⁰		14%	¹⁰		17%	¹⁰		4%	¹¹		4%	¹¹		4%	¹¹

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

⁷

Annualized.

⁸

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.31%, 0.31%, 0.30%, 0.32% and 0.29% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁹

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.10%

0.08%

¹⁰

¹¹

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 13%, 20% and 14% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights		BlackRock LifePath 2020 Fund


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	15.65		$	16.75		$	16.42		$	15.22		$	15.92		$	14.62

Net investment income¹		0.11			0.26			0.25			0.29			0.33			0.29
Net realized and unrealized gain (loss)		0.06			0.58			1.32			1.38			(0.09	)		1.28

Net increase from investment operations		0.17			0.84			1.57			1.67			0.24			1.57

Distributions from:²
Net investment income		(0.12	)		(0.26	)		(0.26	)		(0.29	)		(0.33	)		(0.27	)
Net realized gain		(0.17	)		(1.68	)		(0.98	)		(0.18	)		(0.61	)		—

Total distributions		(0.29	)		(1.94	)		(1.24	)		(0.47	)		(0.94	)		(0.27	)

Net asset value, end of period	$	15.53		$	15.65		$	16.75		$	16.42		$	15.22		$	15.92


Total Return³
Based on net asset value		1.10%	⁴		5.06%			9.67%			10.99%			1.46%			10.90%


Ratios to Average Net Assets⁵
Total expenses		0.74%	^6,7,8		0.74%	^7,8		0.73%	^7,8		0.75%	^7,8		0.75%	^7,8		1.08%

Total expenses after fees waived and/or reimbursed		0.74%	^6,7,8		0.74%	^7,8		0.73%	^7,8		0.75%	^7,8		0.74%	^7,8		0.73%

Net investment income		1.46%	^6,7,8		1.50%	^7,8		1.47%	^7,8		1.77%	^7,8		2.05%	^7,8		1.95%


Supplemental Data
Net assets, end of period (000)	$	355,149		$	490,447		$	698,251		$	688,545		$	752,092		$	843,339

Portfolio turnover rate of the LifePath Master Portfolio		10%	⁹		21%	⁹		19%	⁹		5%	¹⁰		5%	¹⁰		4%	¹⁰

Based on average shares outstanding.

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

Where applicable, assumes the reinvestment of distributions.

⁴

Aggregate total return.

⁵

⁶

Annualized.

⁷

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.34%, 0.34%, 0.32%, 0.32% and 0.32% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁸

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.11%

0.12%

0.11%

⁹

¹⁰

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 15%, 23% and 13% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights (continued)		BlackRock LifePath 2020 Fund


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	14.61		$	15.77		$	15.53		$	14.43		$	15.14		$	13.93

Net investment income¹		0.09			0.20			0.19			0.24			0.28			0.24
Net realized and unrealized gain (loss)		0.06			0.55			1.25			1.30			(0.09	)		1.21

Net increase from investment operations		0.15			0.75			1.44			1.54			0.19			1.45

Distributions from:²
Net investment income		(0.11	)		(0.23	)		(0.22	)		(0.26	)		(0.29	)		(0.24	)
Net realized gain		(0.17	)		(1.68	)		(0.98	)		(0.18	)		(0.61	)		—

Total distributions		(0.28	)		(1.91	)		(1.20	)		(0.44	)		(0.90	)		(0.24	)

Net asset value, end of period	$	14.48		$	14.61		$	15.77		$	15.53		$	14.43		$	15.14


Total Return³
Based on net asset value		1.02%⁴			4.79%			9.39%			10.67%			1.26%			10.56%


Ratios to Average Net Assets⁵
Total expenses		0.99%	^6,7,8		0.99%	^7,8		0.98%	^7,8		1.00%	^7,8		1.00%	^7,8		1.34%

Total expenses after fees waived and/or reimbursed		0.99%	^6,7,8		0.98%	^7,8		0.98%	^7,8		1.00%	^7,8		1.00%	^7,8		0.99%

Net investment income		1.23%	^6,7,8		1.26%	^7,8		1.21%	^7,8		1.55%	^7,8		1.82%	^7,8		1.71%


Supplemental Data
Net assets, end of period (000)	$	333,326		$	367,281		$	390,380		$	410,926		$	401,477		$	376,851

Portfolio turnover rate of the LifePath Master Portfolio		10%	⁹		21%	⁹		19%	⁹		5%	¹⁰		5%	¹⁰		4%	¹⁰

Based on average shares outstanding.

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

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

⁴

Aggregate total return.

⁵

⁶

Annualized.

⁷

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.34%, 0.35%, 0.32%, 0.32% and 0.32% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁸

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.11%

0.12%

0.11%

⁹

¹⁰

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 15%, 23% and 13% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights (continued)		BlackRock LifePath 2020 Fund


	Investor C
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period May 3, 2010¹ to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period May 3, 2010¹ to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	15.49		$	16.62		$	16.32		$	15.16		$	15.89		$	15.29

Net investment income²		0.04			0.09			0.09			0.14			0.17			0.12
Net realized and unrealized gain (loss)		0.06			0.57			1.30			1.36			(0.09	)		0.64

Net increase from investment operations		0.10			0.66			1.39			1.50			0.08			0.76

Distributions from:³
Net investment income		(0.05	)		(0.11	)		(0.11	)		(0.16	)		(0.20	)		(0.16	)
Net realized gain		(0.17	)		(1.68	)		(0.98	)		(0.18	)		(0.61	)		—

Total distributions		(0.22	)		(1.79	)		(1.09	)		(0.34	)		(0.81	)		(0.16	)

Net asset value, end of period	$	15.37		$	15.49		$	16.62		$	16.32		$	15.16		$	15.89


Total Return⁴
Based on net asset value		0.65%	⁵		3.98%			8.58%			9.87%			0.47%			5.03%	⁵


Ratios to Average Net Assets⁶
Total expenses		1.74%	^7,8,9		1.74%	^8,9		1.73%	^8,9		1.75%	^8,9		1.75%	^8,9		2.09%	⁷

Total expenses after fees waived and/or reimbursed		1.74%	^7,8,9		1.73%	^8,9		1.73%	^8,9		1.75%	^8,9		1.75%	^8,9		1.74%	⁷

Net investment income		0.49%	^7,8,9		0.54%	^8,9		0.51%	^8,9		0.87%	^8,9		1.05%	^8,9		1.23%⁷


Supplemental Data
Net assets, end of period (000)	$	2,991		$	2,981		$	2,193		$	1,262		$	301		$	116

Portfolio turnover rate of the LifePath Master Portfolio		10%	¹⁰		21%	¹⁰		19%	¹⁰		5%	¹¹		5%	¹¹		4%	¹¹

Commencement of operations.

Based on average shares outstanding.

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

⁴

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

⁵

Aggregate total return.

⁶

⁷

Annualized.

⁸

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.34%, 0.36%, 0.32%, 0.32% and 0.32% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁹

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.11%

0.12%

0.11%

¹⁰

¹¹

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 15%, 23% and 13% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights (continued)		BlackRock LifePath 2020 Fund


	Class K
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	15.61		$	16.73		$	16.39		$	15.20		$	15.91		$	14.61

Net investment income¹		0.15			0.32			0.30			0.35			0.40			0.34
Net realized and unrealized gain (loss)		0.06			0.57			1.33			1.37			(0.12	)		1.28

Net increase from investment operations		0.21			0.89			1.63			1.72			0.28			1.62

Distributions from:²
Net investment income		(0.16	)		(0.33	)		(0.31	)		(0.35	)		(0.38	)		(0.32	)
Net realized gain		(0.17	)		(1.68	)		(0.98	)		(0.18	)		(0.61	)		—

Total distributions		(0.33	)		(2.01	)		(1.29	)		(0.53	)		(0.99	)		(0.32	)

Net asset value, end of period	$	15.49		$	15.61		$	16.73		$	16.39		$	15.20		$	15.91


Total Return³
Based on net asset value		1.31%	⁴		5.35%			10.11%			11.36%			1.78%			11.28%


Ratio to Average Net Assets⁵
Total expenses		0.40%	^6,7,8		0.39%	^7,8		0.38%	^7,8		0.40%	^7,8		0.40%	^7,8		0.74%

Total expenses after fees waived and/or reimbursed		0.39%	^6,7,8		0.38%	^7,8		0.37%	^7,8		0.40%	^7,8		0.40%	^7,8		0.39%

Net investment income		1.96%	^6,7,8		1.90%	^7,8		1.77%	^7,8		2.18%	^7,8		2.47%	^7,8		2.29%


Supplemental Data
Net assets, end of period (000)	$	20,243		$	9,545		$	6,500		$	11,609		$	6,224		$	2,485

Portfolio turnover rate of the LifePath Master Portfolio		10%	⁹		21%	⁹		19%	⁹		5%	¹⁰		5%	¹⁰		4%	¹⁰

Based on average shares outstanding.

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

Where applicable, assumes the reinvestment of distributions.

⁴

Aggregate total return.

⁵

⁶

Annualized.

⁷

⁸

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.11%

0.12%

0.11%

⁹

¹⁰

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 15%, 23% and 13% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights (concluded)		BlackRock LifePath 2020 Fund


	Class R
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period May 3, 2010¹ to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period May 3, 2010¹ to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	15.59		$	16.70		$	16.36		$	15.20		$	15.88		$	15.29

Net investment income²		0.08			0.17			0.16			0.25			0.24			0.23
Net realized and unrealized gain (loss)		0.05			0.58			1.33			1.32			(0.07	)		0.57

Net increase from investment operations		0.13			0.75			1.49			1.57			0.17			0.80

Distributions from:³
Net investment income		(0.09	)		(0.18	)		(0.17	)		(0.23	)		(0.24	)		(0.21	)
Net realized gain		(0.17	)		(1.68	)		(0.98	)		(0.18	)		(0.61	)		—

Total distributions		(0.26	)		(1.86	)		(1.15	)		(0.41	)		(0.85	)		(0.21	)

Net asset value, end of period	$	15.46		$	15.59		$	16.70		$	16.36		$	15.20		$	15.88


Total Return⁴
Based on net asset value		0.86%	⁵		4.49%			9.20%			10.36%			1.06%			5.34%	⁵


Ratios to Average Net Assets⁶
Total expenses		1.24%	^7,8,9		1.24%	^8,9		1.23%	^8,9		1.25%	^8,9		1.25%	^8,9		1.58%	⁷

Total expenses after fees waived and/or reimbursed		1.24%	^7,8,9		1.23%	^8,9		1.23%	^8,9		1.25%	^8,9		1.25%	^8,9		1.23%	⁷

Net investment income		1.02%	^7,8,9		1.01%	^8,9		0.94%	^8,9		1.53%	^8,9		1.51%	^8,9		2.29%	⁷


Supplemental Data
Net assets, end of period (000)	$	3,524		$	2,580		$	3,167		$	2,862		$	161		$	81

Portfolio turnover rate of the LifePath Master Portfolio		10%	¹⁰		21%	¹⁰		19%	¹⁰		5%	¹¹		5%	¹¹		4%	¹¹

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

⁷

Annualized.

⁸

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.34%, 0.35%, 0.32%, 0.33% and 0.32% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁹

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.11%

0.12%

0.11%

¹⁰

¹¹

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 15%, 23% and 13% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights		BlackRock LifePath 2030 Fund


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	14.71		$	16.01		$	15.25		$	14.11		$	14.63		$	13.31

Net investment income¹		0.11			0.24			0.26			0.28			0.28			0.25
Net realized and unrealized gain (loss)		0.11			0.61			1.80			1.56			(0.37	)		1.31

Net increase (decrease) from investment operations		0.22			0.85			2.06			1.84			(0.09	)		1.56

Distributions from:²
Net investment income		(0.11	)		(0.26	)		(0.26	)		(0.28	)		(0.27	)		(0.24	)
Net realized gain		(0.17	)		(1.89	)		(1.04	)		(0.42	)		(0.16	)		—

Total distributions		(0.28	)		(2.15	)		(1.30	)		(0.70	)		(0.43	)		(0.24	)

Net asset value, end of period	$	14.65		$	14.71		$	16.01		$	15.25		$	14.11		$	14.63


Total Return³
Based on net asset value		1.52%	⁴		5.32%			13.66%			13.09%			(0.63)%			11.86%


Ratios to Average Net Assets⁵
Total expenses		0.71%	^6,7,8		0.71%	^7,8		0.70%	^7,8		0.73%	^7,8		0.73%	^7,8		1.07%

Total expenses after fees waived and/or reimbursed		0.71%	^6,7,8		0.71%	^7,8		0.70%	^7,8		0.73%	^7,8		0.72%	^7,8		0.70%

Net investment income		1.53%	^6,7,8		1.50%	^7,8		1.62%	^7,8		1.84%	^7,8		1.88%	^7,8		1.85%


Supplemental Data
Net assets, end of period (000)	$	324,553		$	449,354		$	674,558		$	630,131		$	642,867		$	696,817

Portfolio turnover rate of the LifePath Master Portfolio		12%	⁹		33%	⁹		22%	⁹		5%	¹⁰		7%	¹⁰		3%	¹⁰

Based on average shares outstanding.

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

Where applicable, assumes the reinvestment of distributions.

⁴

Aggregate total return.

⁵

⁶

Annualized.

⁷

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.37%, 0.37%, 0.33%, 0.34% and 0.34% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁸

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.15%

0.14%

0.15%

0.13%

⁹

¹⁰

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 16%, 20% and 10% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights (continued)		BlackRock LifePath 2030 Fund


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	14.28		$	15.62		$	14.90		$	13.81		$	14.33		$	13.05

Net investment income¹		0.10			0.20			0.21			0.24			0.24			0.21
Net realized and unrealized gain (loss)		0.10			0.58			1.77			1.52			(0.36	)		1.28

Net increase (decrease) from investment operations		0.20			0.78			1.98			1.76			(0.12	)		1.49

Distributions from:²
Net investment income		(0.10	)		(0.23	)		(0.22	)		(0.25	)		(0.24	)		(0.21	)
Net realized gain		(0.17	)		(1.89	)		(1.04	)		(0.42	)		(0.16	)		—

Total distributions		(0.27	)		(2.12	)		(1.26	)		(0.67	)		(0.40	)		(0.21	)

Net asset value, end of period	$	14.21		$	14.28		$	15.62		$	14.90		$	13.81		$	14.33


Total Return³
Based on net asset value		1.39%	⁴		4.98%			13.44%			12.75%			(0.87	)%		11.53%


Ratios to Average Net Assets⁵
Total expenses		0.96%	^6,7,8		0.96%	^7,8		0.95%	^7,8		0.98%	^7,8		0.98%	^7,8		1.32%

Total expenses after fees waived and/or reimbursed		0.96%	^6,7,8		0.96%	^7,8		0.95%	^7,8		0.98%	^7,8		0.97%	^7,8		0.96%

Net investment income		1.31%	^6,7,8		1.28%	^7,8		1.36%	^7,8		1.62%	^7,8		1.65%	^7,8		1.60%


Supplemental Data
Net assets, end of period (000)	$	333,102		$	350,201		$	356,117		$	343,885		$	339,249		$	307,189

Portfolio turnover rate of the LifePath Master Portfolio		12%	⁹		33%	⁹		22%	⁹		5%	¹⁰		7%	¹⁰		3%	¹⁰

Based on average shares outstanding.

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

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

⁴

Aggregate total return.

⁵

⁶

Annualized.

⁷

⁸

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.15%

0.14%

0.15%

0.13%

⁹

¹⁰

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 16%, 20% and 10% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights (continued)		BlackRock LifePath 2030 Fund


	Investor C
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period May 3, 2010¹ to Decmber 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period May 3, 2010¹ to Decmber 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	14.52		$	15.85		$	15.13		$	14.05		$	14.62		$	13.97

Net investment income²		0.05			0.09			0.13			0.16			0.14			0.10
Net realized and unrealized gain (loss)		0.10			0.58			1.76			1.51			(0.38	)		0.67

Net increase (decrease) from investment operations		0.15			0.67			1.89			1.67			(0.24	)		0.77

Distributions from:³
Net investment income		(0.05	)		(0.11	)		(0.13	)		(0.17	)		(0.17	)		(0.12	)
Net realized gain		(0.17	)		(1.89	)		(1.04	)		(0.42	)		(0.16	)		—

Total distributions		(0.22	)		(2.00	)		(1.17	)		(0.59	)		(0.33	)		(0.12	)

Net asset value, end of period	$	14.45		$	14.52		$	15.85		$	15.13		$	14.05		$	14.62


Total Return⁴
Based on net asset value		1.04%	⁵		4.23%			12.59%			11.92%			(1.63	)%		5.64%	⁵


Ratios to Average Net Assets⁶
Total expenses		1.71%	^7,8,9		1.71%	^8,9		1.71%	^8,9		1.72%	^8,9		1.74%	^8,9		2.07%	⁷

Total expenses after fees waived and/or reimbursed		1.71%	^7,8,9		1.71%	^8,9		1.71%	^8,9		1.72%	^8,9		1.74%	^8,9		1.71%	⁷

Net investment income		0.62%	^7,8,9		0.55%	^8,9		0.79%	^8,9		1.05%	^8,9		1.01%	^8,9		1.09%⁷


Supplemental Data
Net assets, end of period (000)	$	3,867		$	3,053		$	2,531		$	1,010		$	154		$	21

Portfolio turnover rate of the LifePath Master Portfolio		12%	¹⁰		33%	¹⁰		22%	¹⁰		5%	¹¹		7%	¹¹		3%	¹¹

Commencement of operations.

Based on average shares outstanding.

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

⁴

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

⁵

Aggregate total return.

⁶

⁷

Annualized.

⁸

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.37%, 0.38%, 0.34%, 0.35% and 0.34% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁹

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.15%

0.14%

0.15%

0.13%

¹⁰

¹¹

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 16%, 20% and 10% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights (continued)		BlackRock LifePath 2030 Fund


	Class K
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	14.70		$	16.01		$	15.25		$	14.12		$	14.63		$	13.30

Net investment income¹		0.16			0.31			0.31			0.34			0.35			0.29
Net realized and unrealized gain (loss)		0.10			0.60			1.81			1.55			(0.37	)		1.32

Net increase (decrease) from investment operations		0.26			0.91			2.12			1.89			(0.02	)		1.61

Distributions from:²
Net investment income		(0.15	)		(0.33	)		(0.32	)		(0.34	)		(0.33	)		(0.28	)
Net realized gain		(0.17	)		(1.89	)		(1.04	)		(0.42	)		(0.16	)		—

Total distributions		(0.32	)		(2.22	)		(1.36	)		(0.76	)		(0.49	)		(0.28	)

Net asset value, end of period	$	14.64		$	14.70		$	16.01		$	15.25		$	14.12		$	14.63


Total Return³
Based on net asset value		1.73%	⁴		5.66%			14.05%			13.43%			(0.20	)%		12.32%


Ratios to Average Net Assets⁵
Total expenses		0.36%	^6,7,8		0.36%	^7,8		0.35%	^7,8		0.38%	^7,8		0.38%	^7,8		0.72%

Total expenses after fees waived and/or reimbursed		0.36%	^6,7,8		0.36%	^7,8		0.35%	^7,8		0.38%	^7,8		0.38%	^7,8		0.35%

Net investment income		2.13%	^6,7,8		1.89%	^7,8		1.95%	^7,8		2.26%	^7,8		2.41%	^7,8		2.17%


Supplemental Data
Net assets, end of period (000)	$	19,032		$	9,518		$	8,666		$	11,077		$	6,448		$	1,849

Portfolio turnover rate of the LifePath Master Portfolio		12%	⁹		33%	⁹		22%	⁹		5%	¹⁰		7%	¹⁰		3%	¹⁰

Based on average shares outstanding.

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

Where applicable, assumes the reinvestment of distributions.

⁴

Aggregate total return.

⁵

⁶

Annualized.

⁷

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.37%, 0.36%, 0.34%, 0.35% and 0.34% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁸

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.15%

0.14%

0.15%

0.13%

⁹

¹⁰

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 16%, 20% and 10% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights (concluded)		BlackRock LifePath 2030 Fund


	Class R
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period May 3, 2010¹ to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period May 3, 2010¹ to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	14.60		$	15.92		$	15.17		$	14.08		$	14.60		$	13.97

Net investment income²		0.08			0.17			0.18			0.28			0.20			0.22
Net realized and unrealized gain (loss)		0.11			0.59			1.80			1.47			(0.36	)		0.60

Net increase (decrease) from investment operations		0.19			0.76			1.98			1.75			(0.16	)		0.82

Distributions from:³
Net investment income		(0.08	)		(0.19	)		(0.19	)		(0.24	)		(0.20	)		(0.19	)
Net realized gain		(0.17	)		(1.89	)		(1.04	)		(0.42	)		(0.16	)		—

Total distributions		(0.25	)		(2.08	)		(1.23	)		(0.66	)		(0.36	)		(0.19	)

Net asset value, end of period	$	14.54		$	14.60		$	15.92		$	15.17		$	14.08		$	14.60


Total Return⁴
Based on net asset value		1.29%	⁵		4.73%			13.14%			12.48%			(1.12	)%		5.96%	⁵


Ratios to Average Net Assets⁶
Total expenses		1.22%	^7,8,9		1.21%	^8,9		1.21%	^8,9		1.22%	^8,9		1.23%	^8,9		1.56%	⁷

Total expenses after fees waived and/or reimbursed		1.22%	^7,8,9		1.21%	^8,9		1.21%	^8,9		1.22%	^8,9		1.23%	^8,9		1.20%	⁷

Net investment income		1.07%	^7,8,9		1.02%	^8,9		1.15%	^8,9		1.84%	^8,9		1.41%	^8,9		2.39%⁷


Supplemental Data
Net assets, end of period (000)	$	2,646		$	3,044		$	3,155		$	2,088		$	188		$	75

Portfolio turnover rate of the LifePath Master Portfolio		12%	¹⁰		33%	¹⁰		22%	¹⁰		5%	¹¹		7%	¹¹		3%	¹¹

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

⁷

Annualized.

⁸

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.37%, 0.34%, 0.34%, 0.35% and 0.34% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁹

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.15%

0.14%

0.15%

0.13%

¹⁰

¹¹

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 16%, 20% and 10% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights		BlackRock LifePath 2040 Fund


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	18.37		$	20.06		$	18.62		$	16.98		$	17.78		$	16.04

Net investment income¹		0.15			0.31			0.35			0.35			0.31			0.28
Net realized and unrealized gain (loss)		0.19			0.79			2.77			2.14			(0.73	)		1.73

Net increase (decrease) from investment operations		0.34			1.10			3.12			2.49			(0.42	)		2.01

Distributions from:²
Net investment income		(0.14	)		(0.32	)		(0.34	)		(0.36	)		(0.30	)		(0.27	)
Net realized gain		(0.20	)		(2.47	)		(1.34	)		(0.49	)		(0.08	)		—

Total distributions		(0.34	)		(2.79	)		(1.68	)		(0.85	)		(0.38	)		(0.27	)

Net asset value, end of period	$	18.37		$	18.37		$	20.06		$	18.62		$	16.98		$	17.78


Total Return³
Based on net asset value		1.85%	⁴		5.48%			16.92%			14.73%			(2.38	)%		12.71%


Ratios to Average Net Assets⁵
Total expenses		0.68%	^6,7,8		0.69%	^7,8		0.69%	^7,8		0.71%	^7,8		0.71%	^7,8		1.06%

Total expenses after fees waived and/or reimbursed		0.67%	^6,7,8		0.69%	^7,8		0.68%	^7,8		0.71%	^7,8		0.70%	^7,8		0.69%

Net investment income		1.59%	^6,7,8		1.51%	^7,8		1.75%	^7,8		1.91%	^7,8		1.73%	^7,8		1.75%


Supplemental Data
Net assets, end of period (000)	$	309,803		$	434,049		$	615,699		$	536,902		$	528,655		$	556,626

Portfolio turnover rate of the LifePath Master Portfolio		10%	⁹		42%	⁹		26%	⁹		4%	¹⁰		8%	¹⁰		4%	¹⁰

Based on average shares outstanding.

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

Where applicable, assumes the reinvestment of distributions.

⁴

Aggregate total return.

⁵

⁶

Annualized.

⁷

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.39%, 0.39%, 0.35%, 0.36% and 0.35% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁸

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.18%

0.16%

0.17%

0.15%

⁹

¹⁰

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 14%, 20% and 9% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights (continued)		BlackRock LifePath 2040 Fund


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	17.22		$	18.98		$	17.69		$	16.18		$	16.97		$	15.33

Net investment income¹		0.12			0.25			0.28			0.30			0.25			0.23
Net realized and unrealized gain (loss)		0.17			0.75			2.64			2.02			(0.70	)		1.65

Net increase (decrease) from investment operations		0.29			1.00			2.92			2.32			(0.45	)		1.88

Distributions from:²
Net investment income		(0.12	)		(0.29	)		(0.29	)		(0.32	)		(0.26	)		(0.24	)
Net realized gain		(0.20	)		(2.47	)		(1.34	)		(0.49	)		(0.08	)		—

Total distributions		(0.32	)		(2.76	)		(1.63	)		(0.81	)		(0.34	)		(0.24	)

Net asset value, end of period	$	17.19		$	17.22		$	18.98		$	17.69		$	16.18		$	16.97


Total Return³
Based on net asset value		1.69%	⁴		5.23%			16.70%			14.41%			(2.65)%			12.40%


Ratios to Average Net Assets⁵
Total expenses		0.93%	^6,7,8		0.94%	^7,8		0.94%	^7,8		0.96%	^7,8		0.96%	^7,8		1.31%

Total expenses after fees waived and/or reimbursed		0.93%	^6,7,8		0.94%	^7,8		0.93%	^7,8		0.96%	^7,8		0.95%	^7,8		0.94%

Net investment income		1.37%	^6,7,8		1.30%	^7,8		1.48%	^7,8		1.69%	^7,8		1.50%	^7,8		1.50%


Supplemental Data
Net assets, end of period (000)	$	248,432		$	264,312		$	262,573		$	247,317		$	233,427		$	224,164

Portfolio turnover rate of the LifePath Master Portfolio		10%	⁹		42%	⁹		26%	⁹		4%	¹⁰		8%	¹⁰		4%	¹⁰

Based on average shares outstanding.

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

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

⁴

Aggregate total return.

⁵

⁶

Annualized.

⁷

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.39%, 0.40%, 0.35%, 0.36% and 0.35% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁸

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.18%

0.16%

0.17%

0.15%

⁹

¹⁰

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 14%, 20% and 9% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights (continued)		BlackRock LifePath 2040 Fund


	Investor C
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period May 3, 2010¹ to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period May 3, 2010¹ to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	18.19		$	19.89		$	18.49		$	16.92		$	17.77		$	16.89

Net investment income²		0.06			0.11			0.17			0.21			0.13			0.12
Net realized and unrealized gain (loss)		0.19			0.79			2.73			2.08			(0.73	)		0.90

Net increase (decrease) from investment operations		0.25			0.90			2.90			2.29			(0.60	)		1.02

Distributions from:³
Net investment income		(0.06	)		(0.13	)		(0.16	)		(0.23	)		(0.17	)		(0.14	)
Net realized gain		(0.20	)		(2.47	)		(1.34	)		(0.49	)		(0.08	)		—

Total distributions		(0.26	)		(2.60	)		(1.50	)		(0.72	)		(0.25	)		(0.14	)

Net asset value, end of period	$	18.18		$	18.19		$	19.89		$	18.49		$	16.92		$	17.77


Total Return⁴
Based on net asset value		1.37%	⁵		4.49%			15.80%			13.59%			(3.39)%			6.15%	⁵


Ratios to Average Net Assets⁶
Total expenses		1.68%	^7,8,9		1.69%	^8,9		1.69%	^8,9		1.71%	^8,9		1.72%	^8,9		2.06%	⁷

Total expenses after fees waived and/or reimbursed		1.68%	^7,8,9		1.69%	^8,9		1.69%	^8,9		1.71%	^8,9		1.71%	^8,9		1.69%	⁷

Net investment income		0.67%	^7,8,9		0.55%	^8,9		0.85%	^8,9		1.12%	^8,9		0.72%	^8,9		1.11%	⁷


Supplemental Data
Net assets, end of period (000)	$	2,693		$	2,277		$	1,944		$	1,185		$	98		$	21

Portfolio turnover rate of the LifePath Master Portfolio		10%	¹⁰		42%	¹⁰		26%	¹⁰		4%	¹¹		8%	¹¹		4%	¹¹

Commencement of operations.

Based on average shares outstanding.

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

⁴

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

⁵

Aggregate total return.

⁶

⁷

Annualized.

⁸

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.39%, 0.41%, 0.35%, 0.36% and 0.35% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁹

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.18%

0.16%

0.17%

0.15%

¹⁰

¹¹

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 14%, 20% and 9% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights (continued)		BlackRock LifePath 2040 Fund


	Class K
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	18.47		$	20.16		$	18.69		$	17.05		$	17.84		$	16.03

Net investment income¹		0.24			0.39			0.41			0.44			0.46			0.39
Net realized and unrealized gain (loss)		0.13			0.79			2.81			2.12			(0.80	)		1.70

Net increase (decrease) from investment operations		0.37			1.18			3.22			2.56			(0.34	)		2.09

Distributions from:²
Net investment income		(0.18	)		(0.40	)		(0.41	)		(0.43	)		(0.37	)		(0.28	)
Net realized gain		(0.20	)		(2.47	)		(1.34	)		(0.49	)		(0.08	)		—

Total distributions		(0.38	)		(2.87	)		(1.75	)		(0.92	)		(0.45	)		(0.28	)

Net asset value, end of period	$	18.46		$	18.47		$	20.16		$	18.69		$	17.05		$	17.84


Total Return³
Based on net asset value		1.99%	⁴		5.85%			17.41%			15.08%			(1.95	)%		13.18%


Ratios to Average Net Assets⁵
Total expenses		0.33%	^6,7,8		0.34%	^7,8		0.33%	^7,8		0.36%	^7,8		0.37%	^7,8		0.70%

Total expenses after fees waived and/or reimbursed		0.32%	^6,7,8		0.34%	^7,8		0.33%	^7,8		0.36%	^7,8		0.36%	^7,8		0.33%

Net investment income		2.62%	^6,7,8		1.90%	^7,8		2.05%	^7,8		2.36%	^7,8		2.60%	^7,8		2.34%


Supplemental Data
Net assets, end of period (000)	$	16,077		$	4,980		$	5,733		$	8,038		$	4,749		$	144

Portfolio turnover rate of the LifePath Master Portfolio		10%	⁹		42%	⁹		26%	⁹		4%	¹⁰		8%	¹⁰		4%	¹⁰

Based on average shares outstanding.

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

Where applicable, assumes the reinvestment of distributions.

⁴

Aggregate total return.

⁵

⁶

Annualized.

⁷

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.40%, 0.40%, 0.35%, 0.36% and 0.35% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁸

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.18%

0.16%

0.17%

0.15%

⁹

¹⁰

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 14%, 20% and 9% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights (concluded)		BlackRock LifePath 2040 Fund


	Class R
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period May 3, 2010¹ to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period May 3, 2010¹ to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	18.29		$	19.98		$	18.54		$	16.93		$	17.74		$	16.89

Net investment income²		0.11			0.20			0.22			0.34			0.23			0.34
Net realized and unrealized gain (loss)		0.18			0.80			2.78			2.05			(0.74	)		0.73

Net increase (decrease) from investment operations		0.29			1.00			3.00			2.39			(0.51	)		1.07

Distributions from:³
Net investment income		(0.10	)		(0.22	)		(0.22	)		(0.29	)		(0.22	)		(0.22	)
Net realized gain		(0.20	)		(2.47	)		(1.34	)		(0.49	)		(0.08	)		—

Total distributions		(0.30	)		(2.69	)		(1.56	)		(0.78	)		(0.30	)		(0.22	)

Net asset value, end of period	$	18.28		$	18.29		$	19.98		$	18.54		$	16.93		$	17.74


Total Return⁴
Based on net asset value		1.60%	⁵		4.96%			16.33%			14.19%			(2.88	)%		6.47%	⁵


Ratios to Average Net Assets⁶
Total expenses		1.18%	^7,8,9		1.19%	^8,9		1.19%	^8,9		1.21%	^8,9		1.22%	^8,9		1.55%	⁷

Total expenses after fees waived and/or reimbursed		1.18%	^7,8,9		1.19%	^8,9		1.18%	^8,9		1.21%	^8,9		1.22%	^8,9		1.19%	⁷

Net investment income		1.18%	^7,8,9		1.01%	^8,9		1.12%	^8,9		1.83%	^8,9		1.35%	^8,9		3.13%	⁷


Supplemental Data
Net assets, end of period (000)	$	1,465		$	1,162		$	1,438		$	1,917		$	460		$	126

Portfolio turnover rate of the LifePath Master Portfolio		10%	¹⁰		42%	¹⁰		26%	¹⁰		4%	¹¹		8%	¹¹		4%	¹¹

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

⁷

Annualized.

⁸

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.39%, 0.39%, 0.35%, 0.37% and 0.35% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁹

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.18%

0.16%

0.17%

0.15%

¹⁰

¹¹

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 14%, 20% and 9% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights		BlackRock LifePath 2050 Fund


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	19.59		$	21.37		$	19.18		$	17.16		$	18.58		$	16.81

Net investment income¹		0.17			0.33			0.41			0.37			0.31			0.31
Net realized and unrealized gain (loss)		0.22			0.89			3.36			2.37			(0.99	)		1.91

Net increase (decrease) from investment operations		0.39			1.22			3.77			2.74			(0.68	)		2.22

Distributions from:²
Net investment income		(0.15	)		(0.34	)		(0.39	)		(0.37	)		(0.29	)		(0.28	)
Net realized gain		(0.15	)		(2.66	)		(1.19	)		(0.35	)		(0.45	)		(0.17	)

Total distributions		(0.30	)		(3.00	)		(1.58	)		(0.72	)		(0.74	)		(0.45	)

Net asset value, end of period	$	19.68		$	19.59		$	21.37		$	19.18		$	17.16		$	18.58


Total Return³
Based on net asset value		1.95%	⁴		5.73%			19.82%			16.05%			(3.78)%			13.43%


Ratios to Average Net Assets⁵
Total expenses		0.67%	^6,7,8		0.68%	^7,8		0.71%	^7,8		0.72%	^7,8		0.71%	^7,8		1.09%

Total expenses after fees waived and/or reimbursed		0.66%	^6,7,8		0.67%	^7,8		0.70%	^7,8		0.71%	^7,8		0.68%	^7,8		0.67%

Net investment income		1.66%	^6,7,8		1.51%	^7,8		1.97%	^7,8		1.99%	^7,8		1.69%	^7,8		1.83%


Supplemental Data
Net assets, end of period (000)	$	109,059		$	108,741		$	166,385		$	106,813		$	70,555		$	50,613

Portfolio turnover rate of the LifePath Master Portfolio		11%	⁹		48%	⁹		28%	⁹		5%	¹⁰		13%	¹⁰		5%	¹⁰

Based on average shares outstanding.

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

Where applicable, assumes the reinvestment of distributions.

⁴

Aggregate total return.

⁵

⁶

Annualized.

⁷

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.41%, 0.41%, 0.36%, 0.39% and 0.40% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁸

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.19%

0.17%

0.15%

0.17%

⁹

¹⁰

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 15%, 19% and 12% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights (continued)		BlackRock LifePath 2050 Fund


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	19.56		$	21.35		$	19.17		$	17.15		$	18.58		$	16.82

Net investment income¹		0.14			0.28			0.35			0.33			0.26			0.28
Net realized and unrealized gain (loss)		0.22			0.89			3.36			2.36			(0.99	)		1.90

Net increase (decrease) from investment operations		0.36			1.17			3.71			2.69			(0.73	)		2.18

Distributions from:²
Net investment income		(0.12	)		(0.30	)		(0.34	)		(0.32	)		(0.25	)		(0.25	)
Net realized gain		(0.15	)		(2.66	)		(1.19	)		(0.35	)		(0.45	)		(0.17	)

Total distributions		(0.27	)		(2.96	)		(1.53	)		(0.67	)		(0.70	)		(0.42	)

Net asset value, end of period	$	19.65		$	19.56		$	21.35		$	19.17		$	17.15		$	18.58


Total Return³
Based on net asset value		1.83%	⁴		5.47%			19.48%			15.80%			(4.06)%			13.14%


Ratios to Average Net Assets⁵
Total expenses		0.93%	^6,7,8		0.93%	^7,8		0.96%	^7,8		0.97%	^7,8		0.96%	^7,8		1.34%

Total expenses after fees waived and/or reimbursed		0.92%	^6,7,8		0.92%	^7,8		0.95%	^7,8		0.96%	^7,8		0.94%	^7,8		0.92%

Net investment income		1.41%	^6,7,8		1.30%	^7,8		1.67%	^7,8		1.77%	^7,8		1.44%	^7,8		1.67%


Supplemental Data
Net assets, end of period (000)	$	75,117		$	70,442		$	62,891		$	46,189		$	32,617		$	18,809

Portfolio turnover rate of the LifePath Master Portfolio		11%	⁹		48%	⁹		28%	⁹		5%	¹⁰		13%	¹⁰		5%	¹⁰

Based on average shares outstanding.

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

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

⁴

Aggregate total return.

⁵

⁶

Annualized.

⁷

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.41%, 0.42%, 0.36%, 0.39% and 0.40% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁸

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.19%

0.17%

0.15%

0.17%

⁹

¹⁰

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 15%, 19% and 12% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights (continued)		BlackRock LifePath 2050 Fund


	Investor C
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period May 3, 2010¹ to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period May 3, 2010¹ to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	19.43		$	21.23		$	19.10		$	17.10		$	18.57		$	17.75

Net investment income²		0.07			0.12			0.24			0.17			0.12			0.12
Net realized and unrealized gain (loss)		0.21			0.87			3.30			2.37			(0.99	)		1.02

Net increase (decrease) from investment operations		0.28			0.99			3.54			2.54			(0.87	)		1.14

Distributions from:³
Net investment income		(0.06	)		(0.13	)		(0.22	)		(0.19	)		(0.15	)		(0.15	)
Net realized gain		(0.15	)		(2.66	)		(1.19	)		(0.35	)		(0.45	)		(0.17	)

Total distributions		(0.21	)		(2.79	)		(1.41	)		(0.54	)		(0.60	)		(0.32	)

Net asset value, end of period	$	19.50		$	19.43		$	21.23		$	19.10		$	17.10		$	18.57


Total Return⁴
Based on net asset value		1.43%	⁵		4.67%			18.60%			14.93%			(4.76	)%		6.55%	⁵


Ratios to Average Net Assets⁶
Total expenses		1.68%	^7,8,9		1.69%	^8,9		1.72%	^8,9		1.72%	^8,9		1.71%	^8,9		2.07%	⁷

Total expenses after fees waived and/or reimbursed		1.67%	^7,8,9		1.68%	^8,9		1.71%	^8,9		1.70%	^8,9		1.69%	^8,9		1.64%	⁷

Net investment income		0.70%	^7,8,9		0.55%	^8,9		1.14%	^8,9		0.91%	^8,9		0.63%	^8,9		1.04%	⁷


Supplemental Data
Net assets, end of period (000)	$	778		$	605		$	553		$	118		$	39		$	21

Portfolio turnover rate of the LifePath Master Portfolio		11%	¹⁰		48%	¹⁰		28%	¹⁰		5%	¹¹		13%	¹¹		5%	¹¹

Commencement of operations.

Based on average shares outstanding.

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

⁴

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

⁵

Aggregate total return.

⁶

⁷

Annualized.

⁸

⁹

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.19%

0.17%

0.15%

0.17%

¹⁰

¹¹

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 15%, 19% and 12% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights (continued)		BlackRock LifePath 2050 Fund


	Class K
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	19.66		$	21.44		$	19.24		$	17.20		$	18.63		$	16.85

Net investment income¹		0.21			0.42			0.57			0.45			0.47			0.37
Net realized and unrealized gain (loss)		0.21			0.89			3.28			2.37			(1.10	)		1.91

Net increase (decrease) from investment operations		0.42			1.31			3.85			2.82			(0.63	)		2.28

Distributions from:²
Net investment income		(0.18	)		(0.43	)		(0.46	)		(0.43	)		(0.35	)		(0.33	)
Net realized gain		(0.15	)		(2.66	)		(1.19	)		(0.35	)		(0.45	)		(0.17	)

Total distributions		(0.33	)		(3.09	)		(1.65	)		(0.78	)		(0.80	)		(0.50	)

Net asset value, end of period	$	19.75		$	19.66		$	21.44		$	19.24		$	17.20		$	18.63


Total Return³
Based on net asset value		2.12%	⁴		6.12%			20.19%			16.53%			(3.48	)%		13.79%


Ratios to Average Net Assets⁵
Total expenses		0.32%	^6,7,8		0.33%	^7,8		0.36%	^7,8		0.37%	^7,8		0.36%	^7,8		0.76%

Total expenses after fees waived and/or reimbursed		0.31%	^6,7,8		0.32%	^7,8		0.35%	^7,8		0.36%	^7,8		0.34%	^7,8		0.33%

Net investment income		2.04%	^6,7,8		1.95%	^7,8		2.22%	^7,8		2.38%	^7,8		2.56%	^7,8		2.19%


Supplemental Data
Net assets, end of period (000)	$	1,524		$	1,257		$	821		$	1,018		$	625		$	86

Portfolio turnover rate of the LifePath Master Portfolio		11%	⁹		48%	⁹		28%	⁹		5%	¹⁰		13%	¹⁰		5%	¹⁰

Based on average shares outstanding.

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

Where applicable, assumes the reinvestment of distributions.

⁴

Aggregate total return.

⁵

⁶

Annualized.

⁷

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.41%, 0.43%, 0.36%, 0.39% and 0.40% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁸

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.19%

0.17%

0.15%

0.17%

⁹

¹⁰

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 15%, 19% and 12% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights (concluded)		BlackRock LifePath 2050 Fund


	Class R
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,												Period May 3, 2010¹ to December 31, 2010
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			Period May 3, 2010¹ to December 31, 2010

Per Share Operating Performance
Net asset value, beginning of period	$	19.53		$	21.31		$	19.14		$	17.13		$	18.56		$	17.75

Net investment income²		0.12			0.22			0.30			0.37			0.22			0.22
Net realized and unrealized gain (loss)		0.21			0.89			3.35			2.29			(1.00	)		0.97

Net increase (decrease) from investment operations		0.33			1.11			3.65			2.66			(0.78	)		1.19

Distributions from:³
Net investment income		(0.10	)		(0.23	)		(0.29	)		(0.30	)		(0.20	)		(0.21	)
Net realized gain		(0.15	)		(2.66	)		(1.19	)		(0.35	)		(0.45	)		(0.17	)

Total distributions		(0.25	)		(2.89	)		(1.48	)		(0.65	)		(0.65	)		(0.38	)

Net asset value, end of period	$	19.61		$	19.53		$	21.31		$	19.14		$	17.13		$	18.56


Total Return⁴
Based on net asset value		1.67%	⁵		5.21%			19.19%			15.59%			(4.29	)%		6.87%	⁵


Ratios to Average Net Assets⁶
Total expenses		1.18%	^7,8,9		1.18%	^8,9		1.21%	^8,9		1.22%	^8,9		1.21%	^8,9		1.57%	⁷

Total expenses after fees waived and/or reimbursed		1.17%	^7,8,9		1.17%	^8,9		1.20%	^8,9		1.20%	^8,9		1.19%	^8,9		1.16%	⁷

Net investment income		1.18%	^7,8,9		1.01%	^8,9		1.42%	^8,9		1.98%	^8,9		1.18%	^8,9		1.99%	⁷


Supplemental Data
Net assets, end of period (000)	$	1,214		$	1,091		$	1,126		$	796		$	53		$	40

Portfolio turnover rate of the LifePath Master Portfolio		11%	¹⁰		48%	¹⁰		28%	¹⁰		5%	¹¹		13%	¹¹		5%	¹¹

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

⁷

Annualized.

⁸

Includes the LifePath Fund’s share of the LifePath Master Portfolio’s allocated fees waived of 0.41%, 0.40%, 0.36%, 0.39% and 0.40% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

⁹

Six Months Ended
June 30, 2015
(Unaudited)

Year Ended December 31,

2014

2013

2012

2011

Investments in underlying funds

0.19%

0.17%

0.15%

0.17%

¹⁰

¹¹

Excludes the LifePath Master Portfolio’s purchases and sales of the Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 15%, 19% and 12% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Notes to Financial Statements (Unaudited)

1. Organization:

BlackRock Funds III (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust is organized as a Delaware statutory trust. BlackRock LifePath^® Retirement Fund, BlackRock LifePath^® 2020 Fund, BlackRock LifePath^® 2030 Fund, BlackRock LifePath^® 2040 Fund and BlackRock LifePath^® 2050 Fund (each, a “LifePath Fund” and collectively, the “LifePath Funds”) are each a series of the Trust. Each LifePath Fund seeks to achieve its investment objective by investing substantially all of its assets in a separate series of Master Investment Portfolio (“MIP”): LifePath^® Retirement Master Portfolio, LifePath^® 2020 Master Portfolio, LifePath^® 2030 Master Portfolio, LifePath^® 2040 Master Portfolio and LifePath^® 2050 Master Portfolio (each, a “LifePath Master Portfolio” and collectively, the “LifePath Master Portfolios”). Each LifePath Master Portfolio has the same or substantially similar investment objective as its corresponding LifePath Fund. The performance of a LifePath Fund is directly affected by the performance of its corresponding LifePath Master Portfolio.

The value of each LifePath Fund’s investment in its corresponding LifePath Master Portfolio reflects that LifePath Fund’s proportionate interest in the net assets of that LifePath Master Portfolio (20.0%, 25.4%, 25.2%, 28.1% and 38.6% for LifePath Retirement Fund, LifePath 2020 Fund, LifePath 2030 Fund, LifePath 2040 Fund and LifePath 2050 Fund, respectively, as of June 30, 2015). As such, the financial statements of each corresponding LifePath Master Portfolio, including the Schedule of Investments, are included elsewhere in this report and should be read in conjunction with each LifePath Fund’s financial statements.

Share Class

Initial Sales Charge

CDSC

Conversion Privilege

Institutional, Class K and Class R

None

Investor A

Yes

None

Investor C

Yes

None

Investor A Shares may be subject to a CDSC where no initial sales charge was paid at the time of purchase.

2. Significant Accounting Policies:

Valuation: The LifePath Funds’ investments are valued at fair value as of the close of trading on the New York Stock Exchange (“NYSE”) (generally 4:00 p.m., Eastern time). U.S. GAAP defines fair value as the price the LifePath Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The LifePath Funds’ policy is to fair value its financial instruments at market value. The LifePath Funds record their investments in the LifePath Master Portfolios at fair value based on the LifePath Funds’ proportionate interest in the net assets of the LifePath Master Portfolio. Valuation of securities held by the LifePath Master Portfolio is discussed in Note 2 of the LifePath Master Portfolio’s Notes to Financial Statements, which are included elsewhere in this report.



50	BLACKROCK FUNDS III	JUNE 30, 2015


Notes to Financial Statements (continued)

3. Administration Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock, Inc. (“BlackRock”) for 1940 Act purposes.

Effective June 1, 2015, BAL has voluntarily agreed to waive 0.10% of the administration fee payable with respect to the Investor A, Investor C, Institutional and Class R Shares of LifePath Retirement Fund. These amounts are included in fees waived by the administrator in the Statements of Operations. This voluntary waiver may be reduced or discontinued at any time without notice. For the six months ended June 30, 2015, the amount waived was $27,175.

The fees and expenses of the Trust’s trustees who are not “interested persons” of the Trust, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and the Trust’s independent registered public accounting firm (together, the “independent expenses”) are paid directly by the LifePath Funds. BAL has contractually agreed to provide an offsetting credit against the administration fees paid by the LifePath Funds in an amount equal to the independent expenses through April 30, 2025. These amounts are included in fees waived by the administrator in the Statements of Operations. For the six months ended June 30, 2015, the Administrator waived $9,231 for each LifePath Fund.


	Investor A		Investor C		Class R
Service Fee		0.25%		0.25%		0.25%
Distribution Fee		—		0.75%		0.25%

For the six months ended June 30, 2015, affiliates earned underwriting discounts, direct commissions and dealer concessions on sales of the LifePath Fund’s Investor A Shares as follows:


	LifePath Retirement Fund		LifePath 2020 Fund		LifePath 2030 Fund		LifePath 2040 Fund		LifePath 2050 Fund
Investor A	$	158	$	880	$	746	$	2,467	$	108

For the six months ended June 30, 2015, affiliates received CDSCs as follows:

LifePath 2030
Fund

LifePath 2050

Fund

Investor C

Certain officers and/or trustees of the LifePath Funds are officers and/or directors of BlackRock or its affiliates.

4. Income Tax Information:

The LifePath Funds file U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the LifePath Funds’ U.S. federal tax returns remains open for each of the four years ended December 31, 2014. The statutes of limitations on the LifePath Funds’ state and local tax returns may remain open for an additional year depending upon the jurisdiction.



BLACKROCK FUNDS III	JUNE 30, 2015	51


Notes to Financial Statements (continued)

5. Capital Share Transactions:

Transactions in capital shares for each class were as follows:


	Six Months Ended June 30, 2015						Year Ended December 31, 2014
LifePath Retirement Fund	Shares			Amount			Shares			Amount
Institutional
Shares sold		2,080,074		$	23,346,782			3,901,030		$	46,463,867
Shares issued to shareholders in reinvestment of distributions		329,204			3,631,121			2,226,827			25,197,554
Shares redeemed		(6,856,929	)		(76,886,695	)		(14,214,774	)		(168,660,124	)

Net decrease		(4,447,651	)	$	(49,908,792	)		(8,086,917	)	$	(96,998,703	)


Investor A
Shares sold		559,958		$	5,667,897			2,530,337		$	27,559,878
Shares issued to shareholders in reinvestment of distributions		247,716			2,459,114			1,531,174			15,615,397
Shares redeemed		(2,229,676	)		(22,515,762	)		(4,600,164	)		(49,794,241	)

Net decrease		(1,422,002	)	$	(14,388,751	)		(538,653	)	$	(6,618,966	)


Investor C
Shares sold		28,417		$	314,472			93,516		$	1,101,560
Shares issued to shareholders in reinvestment of distributions		1,931			21,053			10,491			116,780
Shares redeemed		(7,665	)		(84,914	)		(29,952	)		(354,613	)

Net increase		22,683		$	250,611			74,055		$	863,727


Class K
Shares sold		488,207		$	5,442,642			244,334		$	2,914,944
Shares issued to shareholders in reinvestment of distributions		13,044			143,090			30,903			350,175
Shares redeemed		(7,193	)		(80,107	)		(316,285	)		(3,759,750	)

Net increase (decrease)		494,058		$	5,505,625			(41,048	)	$	(494,631	)


Class R
Shares sold		6,973		$	77,745			9,270		$	109,704
Shares issued to shareholders in reinvestment of distributions		1,272			13,925			9,360			106,023
Shares redeemed		(9,727	)		(108,779	)		(114,241	)		(1,359,189	)

Net decrease		(1,482	)	$	(17,109	)		(95,611	)	$	(1,143,462	)

Total Net Decrease		(5,354,394	)	$	(58,558,416	)		(8,688,174	)	$	(104,392,035	)


LifePath 2020 Fund
Institutional
Shares sold		3,144,049		$	49,958,239			5,490,343		$	93,369,522
Shares issued to shareholders in reinvestment of distributions		465,420			7,267,602			3,770,681			60,533,779
Shares redeemed		(12,082,789	)		(192,740,625	)		(19,597,685	)		(330,407,643	)

Net decrease		(8,473,320	)	$	(135,514,784	)		(10,336,661	)	$	(176,504,342	)


Investor A
Shares sold		740,150		$	10,987,494			2,783,548		$	44,566,411
Shares issued to shareholders in reinvestment of distributions		442,383			6,438,180			2,956,438			44,222,933
Shares redeemed		(3,295,694	)		(48,897,481	)		(5,348,859	)		(85,352,258	)

Net increase (decrease)		(2,113,161	)	$	(31,471,807	)		391,127		$	3,437,086


Investor C
Shares sold		27,782		$	437,657			92,681		$	1,568,498
Shares issued to shareholders in reinvestment of distributions		2,733			42,119			19,730			311,205
Shares redeemed		(28,287	)		(443,453	)		(51,937	)		(874,902	)

Net increase		2,228		$	36,323			60,474		$	1,004,801



52	BLACKROCK FUNDS III	JUNE 30, 2015


Notes to Financial Statements (continued)


	Six Months Ended June 30, 2015						Year Ended December 31, 2014
LifePath 2020 Fund (concluded)	Shares			Amount			Shares			Amount
Class K
Shares sold		745,325		$	11,810,920			460,561		$	7,894,629
Shares issued to shareholders in reinvestment of distributions		23,739			368,842			72,788			1,165,258
Shares redeemed		(73,508	)		(1,163,967	)		(310,592	)		(5,281,867	)

Net increase		695,556		$	11,015,795			222,757		$	3,778,020


Class R
Shares sold		82,285		$	1,308,057			91,690		$	1,556,487
Shares issued to shareholders in reinvestment of distributions		3,687			57,205			19,412			310,941
Shares redeemed		(23,545	)		(373,221	)		(135,284	)		(2,292,419	)

Net increase (decrease)		62,427		$	992,041			(24,182	)	$	(424,991	)

Total Net Decrease		(9,826,270	)	$	(154,942,432	)		(9,686,485	)	$	(168,709,426	)


LifePath 2030 Fund
Institutional
Shares sold		3,621,690		$	54,191,313			6,018,990		$	97,829,378
Shares issued to shareholders in reinvestment of distributions		468,097			6,890,102			4,245,327			64,286,433
Shares redeemed		(12,485,352	)		(188,160,932	)		(21,840,580	)		(351,719,418	)

Net decrease		(8,395,565	)	$	(127,079,517	)		(11,576,263	)	$	(189,603,607	)


Investor A
Shares sold		894,908		$	13,083,573			3,382,841		$	53,696,141
Shares issued to shareholders in reinvestment of distributions		440,883			6,289,676			3,223,542			47,165,061
Shares redeemed		(2,417,935	)		(35,222,839	)		(4,890,982	)		(77,053,211	)

Net increase (decrease)		(1,082,144	)	$	(15,849,590	)		1,715,401		$	23,807,991


Investor C
Shares sold		94,276		$	1,398,360			66,719		$	1,073,462
Shares issued to shareholders in reinvestment of distributions		3,959			57,297			24,897			368,390
Shares redeemed		(40,804	)		(603,378	)		(41,087	)		(653,792	)

Net increase		57,431		$	852,279			50,529		$	788,060


Class K
Shares sold		659,400		$	9,923,418			490,402		$	8,085,095
Shares issued to shareholders in reinvestment of distributions		24,578			360,752			89,431			1,353,726
Shares redeemed		(31,308	)		(470,563	)		(473,631	)		(7,722,039	)

Net increase		652,670		$	9,813,607			106,202		$	1,716,782


Class R
Shares sold		22,584		$	337,906			56,386		$	909,776
Shares issued to shareholders in reinvestment of distributions		3,069			44,769			26,690			399,574
Shares redeemed		(52,088	)		(766,013	)		(72,822	)		(1,172,386	)

Net increase (decrease)		(26,435	)	$	(383,338	)		10,254		$	136,964

Total Net Decrease		(8,794,043	)	$	(132,646,559	)		(9,693,877	)	$	(163,153,810	)


LifePath 2040 Fund
Institutional
Shares sold		2,799,652		$	52,502,292			4,547,603		$	92,415,386
Shares issued to shareholders in reinvestment of distributions		361,301			6,662,070			3,351,708			63,432,704
Shares redeemed		(9,925,144	)		(186,882,694	)		(14,960,406	)		(301,406,787	)

Net decrease		(6,764,191	)	$	(127,718,332	)		(7,061,095	)	$	(145,558,697	)



BLACKROCK FUNDS III	JUNE 30, 2015	53


Notes to Financial Statements (continued)


	Six Months Ended June 30, 2015						Year Ended December 31, 2014
LifePath 2040 Fund (concluded)	Shares			Amount			Shares			Amount
Investor A
Shares sold		799,143		$	14,057,695			2,109,212		$	40,550,132
Shares issued to shareholders in reinvestment of distributions		269,965			4,655,749			2,145,088			37,916,491
Shares redeemed		(1,970,755	)		(34,909,001	)		(2,736,990	)		(52,332,409	)

Net increase (decrease)		(901,647	)	$	(16,195,557	)		1,517,310		$	26,134,214


Investor C
Shares sold		47,421		$	885,819			45,298		$	908,758
Shares issued to shareholders in reinvestment of distributions		2,060			37,485			15,261			283,251
Shares redeemed		(26,453	)		(490,798	)		(33,165	)		(673,789	)

Net increase		23,028		$	432,506			27,394		$	518,220


Class K
Shares sold		610,092		$	11,614,497			209,407		$	4,362,508
Shares issued to shareholders in reinvestment of distributions		15,348			283,712			38,807			740,009
Shares redeemed		(24,390	)		(459,005	)		(262,901	)		(5,382,812	)

Net increase (decrease)		601,050		$	11,439,204			(14,687	)	$	(280,295	)


Class R
Shares sold		19,980		$	375,098			46,362		$	942,164
Shares issued to shareholders in reinvestment of distributions		1,286			23,557			8,593			162,063
Shares redeemed		(4,660	)		(87,113	)		(63,404	)		(1,290,801	)

Net increase (decrease)		16,606		$	311,542			(8,449	)	$	(186,574	)

Total Net Decrease		(7,025,154	)	$	(131,730,637	)		(5,539,527	)	$	(119,373,132	)


LifePath 2050 Fund
Institutional
Shares sold		1,573,240		$	31,483,975			2,138,402		$	46,251,744
Shares issued to shareholders in reinvestment of distributions		87,432			1,725,752			762,452			15,338,372
Shares redeemed		(1,669,292	)		(33,497,710	)		(5,137,073	)		(108,715,541	)

Net decrease		(8,620	)	$	(287,983	)		(2,236,219	)	$	(47,125,425	)


Investor A
Shares sold		422,593		$	8,477,160			890,323		$	19,351,097
Shares issued to shareholders in reinvestment of distributions		51,440			1,013,381			475,626			9,543,129
Shares redeemed		(251,931	)		(5,075,114	)		(710,551	)		(15,312,160	)

Net increase		222,102		$	4,415,427			655,398		$	13,582,066


Investor C
Shares sold		14,119		$	282,438			17,404		$	372,119
Shares issued to shareholders in reinvestment of distributions		416			8,123			3,648			72,339
Shares redeemed		(5,800	)		(115,365	)		(15,969	)		(341,292	)

Net increase		8,735		$	175,196			5,083		$	103,166


Class K
Shares sold		12,825		$	258,363			37,882		$	794,194
Shares issued to shareholders in reinvestment of distributions		1,233			24,430			8,661			214,902
Shares redeemed		(865	)		(17,611	)		(20,895	)		(453,493	)

Net increase		13,193		$	265,182			25,648		$	555,603



54	BLACKROCK FUNDS III	JUNE 30, 2015


Notes to Financial Statements (concluded)


	Six Months Ended June 30, 2015						Year Ended December 31, 2014
LifePath 2050 Fund (concluded)	Shares			Amount			Shares			Amount
Class R
Shares sold		9,786		$	196,235			41,449		$	891,512
Shares issued to shareholders in reinvestment of distributions		759			14,912			7,899			159,772
Shares redeemed		(4,510	)		(90,344	)		(46,310	)		(1,008,938	)

Net increase		6,035		$	120,803			3,038		$	42,346

Total Net Increase (Decrease)		241,445		$	4,688,625			(1,547,052	)	$	(32,842,244	)

6. Subsequent Events:



BLACKROCK FUNDS III	JUNE 30, 2015	55


Master Portfolio Information as of June 30, 2015		Master Investment Portfolio


LifePath^® Retirement Master Portfolio


Portfolio Composition		Percent of Affiliated Investment Companies


Fixed Income Funds		59	%
Equity Funds		40
Short-Term Securities		1
Ten Largest Holdings	Percent of Affiliated Investment Companies


CoreAlpha Bond Master Portfolio	50	%
Large Cap Index Master Portfolio	12
iShares TIPS Bond ETF	9
Active Stock Master Portfolio	9
International Tilts Master Portfolio	8
Master Small Cap Index Series	4
BlackRock Commodity Strategies Fund	3
BlackRock Emerging Markets Fund, Inc.	2
iShares MSCI EAFE Small-Cap ETF	1
iShares MSCI Canada ETF	1


LifePath^® 2020 Master Portfolio


Portfolio Composition		Percent of Affiliated Investment Companies


Equity Funds		52	%
Fixed Income Funds		47
Short-Term Securities		1
Ten Largest Holdings	Percent of Affiliated Investment Companies


CoreAlpha Bond Master Portfolio	41	%
Active Stock Master Portfolio	16
International Tilts Master Portfolio	11
Large Cap Index Master Portfolio	11
iShares TIPS Bond ETF	7
Master Small Cap Index Series	4
BlackRock Commodity Strategies Fund	3
BlackRock Emerging Markets Fund, Inc.	3
iShares MSCI EAFE Small-Cap ETF	1
iShares Cohen & Steers REIT ETF	1


LifePath^® 2030 Master Portfolio


Portfolio Composition		Percent of Affiliated Investment Companies


Equity Funds		74	%
Fixed Income Funds		25
Short-Term Securities		1
Ten Largest Holdings	Percent of Affiliated Investment Companies


CoreAlpha Bond Master Portfolio	23	%
Active Stock Master Portfolio	23
International Tilts Master Portfolio	16
Large Cap Index Master Portfolio	15
iShares Cohen & Steers REIT ETF	4
BlackRock Emerging Markets Fund, Inc.	4
iShares International Developed Real Estate ETF	3
BlackRock Commodity Strategies Fund	3
Master Small Cap Index Series	3
iShares TIPS Bond ETF	2



56	BLACKROCK FUNDS III	JUNE 30, 2015


Master Portfolio Information as of June 30, 2015 (concluded)		Master Investment Portfolio


LifePath^® 2040 Master Portfolio


Portfolio Composition		Percent of Affiliated Investment Companies


Equity Funds		92	%
Fixed Income Funds		7
Short-Term Securities		1
Ten Largest Holdings	Percent of Affiliated Investment Companies


Active Stock Master Portfolio	26	%
Large Cap Index Master Portfolio	20
International Tilts Master Portfolio	20
CoreAlpha Bond Master Portfolio	7
iShares Cohen & Steers REIT ETF	6
iShares International Developed Real Estate ETF	6
BlackRock Emerging Markets Fund, Inc.	5
BlackRock Commodity Strategies Fund	3
iShares MSCI EAFE Small-Cap ETF	3
Master Small Cap Index Series	2


LifePath^® 2050 Master Portfolio


Portfolio Composition		Percent of Affiliated Investment Companies


Equity Funds		98	%
Fixed Income Funds		2
Ten Largest Holdings	Percent of Affiliated Investment Companies


Active Stock Master Portfolio	30	%
International Tilts Master Portfolio	21
Large Cap Index Master Portfolio	18
iShares Cohen & Steers REIT ETF	7
iShares International Developed Real Estate ETF	6
BlackRock Emerging Markets Fund, Inc.	5
BlackRock Commodity Strategies Fund	4
iShares MSCI EAFE Small-Cap ETF	3
Master Small Cap Index Series	2
iShares MSCI Canada ETF	2



BLACKROCK FUNDS III	JUNE 30, 2015	57

Schedule of Investments June 30, 2015 (Unaudited)

LifePath Retirement Master Portfolio

(Percentages shown are based on Net Assets)


Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Equity Funds — 40.1%
Active Stock Master Portfolio	$	144,989,639	$	144,989,639
BlackRock Commodity Strategies Fund		6,855,533		53,130,380
BlackRock Emerging Markets Fund, Inc.		1,593,963		31,034,469
International Tilts Master Portfolio	$	127,193,161		127,193,161
iShares Cohen & Steers REIT ETF (b)		45,844		4,108,081
iShares International Developed Real Estate ETF (b)		73,624		2,189,578
iShares MSCI Canada ETF		384,005		10,241,413
iShares MSCI EAFE Small-Cap ETF		333,059		16,992,670
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	189,187,524		189,187,524
Master Small Cap Index Series	$	58,346,547		58,346,547

				637,413,462
Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Fixed Income Funds — 59.7%
CoreAlpha Bond Master Portfolio	$	800,157,894	$	800,157,894
iShares TIPS Bond ETF (b)		1,335,960		149,694,317

				949,852,211
Short-Term Securities — 0.8%
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (c)		3,719,898		3,719,898
BlackRock Cash Funds: Prime, SL Agency Shares, 0.13% (c)(d)		8,821,611		8,821,611

				12,541,509
Total Affiliated Investment Companies (Cost — $1,547,142,642) — 100.6%				1,599,807,182
Liabilities in Excess of Other Assets — (0.6)%				(9,142,079	)

Net Assets — 100.0%			$	1,590,665,103

Notes to Schedule of Investments

(a)


Affiliate	Shares/ Beneficial Interest Held at December 31, 2014		Shares/ Beneficial Interest Purchased			Shares/ Beneficial Interest Sold			Shares/ Beneficial Interest Held at June 30, 2015		Value at June 30, 2015		Net Income			Realized Gain (Loss)
Active Stock Master Portfolio	$	261,549,322		—		$	(116,559,683	)¹	$	144,989,639	$	144,989,639	$	1,739,260		$	21,619,649
BlackRock Cash Funds: Institutional, SL Agency Shares		3,367,223		352,675	²		—			3,719,898	$	3,719,898	$	2,173			—
BlackRock Cash Funds: Prime, SL Agency Shares		—		8,821,611	²		—			8,821,611	$	8,821,611	$	26,995	³		—
BlackRock Commodity Strategies Fund		6,449,996		610,280			(204,743	)		6,855,533	$	53,130,380		—		$	(488,507	)
BlackRock Emerging Markets Fund, Inc.		1,751,608		61,231			(218,876	)		1,593,963	$	31,034,469		—		$	71,177
CoreAlpha Bond Master Portfolio	$	808,534,591		—		$	(8,376,697	)¹	$	800,157,894	$	800,157,894	$	10,047,555		$	2,773,179
International Tilts Master Portfolio	$	113,464,710	$	13,728,451	²		—		$	127,193,161	$	127,193,161	$	2,025,748		$	(143,244	)
iShares Cohen & Steers REIT ETF		45,789		155			(100	)		45,844	$	4,108,081	$	65,925		$	2,116
iShares International Developed Real Estate ETF		71,776		1,848			—			73,624	$	2,189,578	$	48,704			—
iShares MSCI Canada ETF		369,599		22,206			(7,800	)		384,005	$	10,241,413	$	81,590		$	786
iShares MSCI EAFE Small-Cap ETF		338,648		8,611			(14,200	)		333,059	$	16,992,670	$	200,454		$	96,251
iShares TIPS Bond ETF		1,328,000		65,110			(57,150	)		1,335,960	$	149,694,317		—		$	(154,415	)
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	71,857,425	$	117,330,099	²		—		$	189,187,524	$	189,187,524	$	1,231,997		$	732,339
Master Small Cap Index Series	$	61,149,952		—		$	(2,803,405	)¹	$	58,346,547	$	58,346,547	$	380,275		$	1,993,824
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)⁴		—		—			—			—		—	$	114,584			—
¹Represents net shares/beneficial interest sold.
²Represents net shares/beneficial interest purchased.
³ Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.
⁴No longer held by LifePath Master Portfolio as of report date.

(b)

Security, or a portion of security, is on loan.

(c)

Represents the current yield as of report date.

(d)

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

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that LifePath Master Portfolio has the ability to access

•

See Notes to Financial Statements.



58	BLACKROCK FUNDS III	JUNE 30, 2015


Schedule of Investments (concluded)		LifePath Retirement Master Portfolio

•

As of June 30, 2015, the following table summarizes LifePath Master Portfolio’s investments categorized in the disclosure hierarchy:


	Level 1		Level 2		Level 3	Total
Assets:
Investments:
Affiliated Investment Companies	$	279,932,417	$	1,319,874,765	—	$	1,599,807,182

LifePath Master Portfolio may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of June 30, 2015, collateral on securities loaned at value of $8,821,610 is categorized as Level 2 within the disclosure hierarchy.

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	59

Schedule of Investments June 30, 2015 (Unaudited)

LifePath 2020 Master Portfolio

(Percentages shown are based on Net Assets)


Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Equity Funds — 52.1%
Active Stock Master Portfolio	$	442,406,690	$	442,406,690
BlackRock Commodity Strategies Fund		11,681,034		90,528,014
BlackRock Emerging Markets Fund, Inc.		3,876,988		75,484,956
International Tilts Master Portfolio	$	309,747,041		309,747,041
iShares Cohen & Steers REIT ETF (b)		451,616		40,469,310
iShares International Developed Real Estate ETF		1,258,542		37,429,039
iShares MSCI Canada ETF		946,559		25,244,728
iShares MSCI EAFE Small-Cap ETF		809,401		41,295,639
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	309,701,342		309,701,342
Master Small Cap Index Series	$	97,977,549		97,977,549

				1,470,284,308
Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Fixed Income Funds — 47.7%
CoreAlpha Bond Master Portfolio	$	1,153,391,298	$	1,153,391,298
iShares TIPS Bond ETF (b)		1,702,695		190,786,975

				1,344,178,273
Short-Term Securities — 1.0%
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (c)		4,951,920		4,951,920
BlackRock Cash Funds: Prime, SL Agency Shares, 0.13% (c)(d)		23,526,675		23,526,675

				28,478,595
Total Affiliated Investment Companies (Cost — $2,729,139,929) — 100.8%				2,842,941,176
Liabilities in Excess of Other Assets — (0.8)%				(22,896,854	)

Net Assets — 100.0%			$	2,820,044,322

Notes to Schedule of Investments

(a)


Affiliate	Shares/ Beneficial Interest Held at December 31, 2014		Shares/ Beneficial Interest Purchased			Shares/ Beneficial Interest Sold			Shares/ Beneficial Interest Held at June 30, 2015		Value at June 30, 2015		Net Income			Realized Gain (Loss)
Active Stock Master Portfolio	$	627,945,748		—		$	(185,539,058	)¹	$	442,406,690	$	442,406,690	$	4,635,376		$	53,798,246
BlackRock Cash Funds: Institutional, SL Agency Shares		5,279,010		—			(327,090	)¹		4,951,920	$	4,951,920	$	3,975			—
BlackRock Cash Funds: Prime, SL Agency Shares		6,776,550		16,750,125	²		—			23,526,675	$	23,526,675	$	65,606	³		—
BlackRock Commodity Strategies Fund		12,567,336		150,310			(1,036,612	)		11,681,034	$	90,528,014		—		$	(2,468,396	)
BlackRock Emerging Markets Fund, Inc.		4,505,579		47,230			(675,821	)		3,876,988	$	75,484,956		—		$	146,838
CoreAlpha Bond Master Portfolio	$	1,143,592,277	$	9,799,021	²		—		$	1,153,391,298	$	1,153,391,298	$	14,321,832		$	3,973,819
International Tilts Master Portfolio	$	282,798,820	$	26,948,221	²		—		$	309,747,041	$	309,747,041	$	5,080,788		$	(364,153	)
iShares Cohen & Steers REIT ETF		498,805		8,201			(55,390	)		451,616	$	40,469,310	$	672,622		$	2,319,925
iShares International Developed Real Estate ETF		1,382,421		24,766			(148,645	)		1,258,542	$	37,429,039	$	854,744		$	743,924
iShares MSCI Canada ETF		967,873		16,933			(38,247	)		946,559	$	25,244,728	$	201,047		$	(147,375	)
iShares MSCI EAFE Small-Cap ETF		881,531		12,629			(84,759	)		809,401	$	41,295,639	$	493,905		$	522,532
iShares TIPS Bond ETF		1,673,332		99,644			(70,281	)		1,702,695	$	190,786,975		—		$	(177,921	)
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	176,865,168	$	132,836,174	²		—		$	309,701,342	$	309,701,342	$	2,302,086		$	1,540,434
Master Small Cap Index Series	$	99,172,892		—		$	(1,195,343	)¹	$	97,977,549	$	97,977,549	$	625,149		$	3,284,728
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)⁴		—		—			—			—		—	$	163,461			—
¹ Represents net shares/beneficial interest sold.
² Represents net shares/beneficial interest purchased.
³ Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.
⁴ No longer held by LifePath Master Portfolio as of report date.

(b)

Security, or a portion of security, is on loan.

(c)

Represents the current yield as of report date.

(d)

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

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that LifePath Master Portfolio has the ability to access

See Notes to Financial Statements.



60	BLACKROCK FUNDS III	JUNE 30, 2015


Schedule of Investments (concluded)		LifePath 2020 Master Portfolio

•

As of June 30, 2015, the following table summarizes LifePath Master Portfolio’s investments categorized in the disclosure hierarchy:


	Level 1		Level 2		Level 3	Total
Assets:
Investments:
Affiliated Investment Companies	$	529,717,256	$	2,313,223,920	—	$	2,842,941,176

LifePath Master Portfolio may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of June 30, 2015, collateral on securities loaned at value of $23,526,675 is categorized as Level 2 within the disclosure hierarchy.

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	61

Schedule of Investments June 30, 2015 (Unaudited)

LifePath 2030 Master Portfolio

(Percentages shown are based on Net Assets)


Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Equity Funds — 74.1%
Active Stock Master Portfolio	$	615,160,619	$	615,160,619
BlackRock Commodity Strategies Fund		11,708,989		90,744,668
BlackRock Emerging Markets Fund, Inc.		5,392,956		105,000,851
International Tilts Master Portfolio	$	425,056,100		425,056,100
iShares Cohen & Steers REIT ETF (b)		1,179,327		105,679,493
iShares International Developed Real Estate ETF		3,199,566		95,155,093
iShares MSCI Canada ETF (b)		1,324,628		35,327,829
iShares MSCI EAFE Small-Cap ETF		1,154,911		58,923,559
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	405,054,811		405,054,811
Master Small Cap Index Series	$	74,558,885		74,558,885

				2,010,661,908
Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Fixed Income Funds — 25.6%
CoreAlpha Bond Master Portfolio	$	626,836,476	$	626,836,476
iShares TIPS Bond ETF (b)		609,456		68,289,545

				695,126,021
Short-Term Securities — 0.8%
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (c)		8,364,984		8,364,984
BlackRock Cash Funds: Prime, SL Agency Shares, 0.13% (c)(d)		12,446,927		12,446,927

				20,811,911
Total Affiliated Investment Companies (Cost — $2,593,765,975) — 100.5%				2,726,599,840
Liabilities in Excess of Other Assets — (0.5)%				(13,650,906	)

Net Assets — 100.0%			$	2,712,948,934

Notes to Schedule of Investments

(a)


Affiliate	Shares/ Beneficial Interest Held at December 31, 2014		Shares/ Beneficial Interest Purchased			Shares/ Beneficial Interest Sold			Shares/ Beneficial Interest Held at June 30, 2015		Value at June 30, 2015		Net Income			Realized Gain (Loss)
Active Stock Master Portfolio	$	732,007,711		—		$	(116,847,092	)¹	$	615,160,619	$	615,160,619	$	5,784,245		$	64,784,746
BlackRock Cash Funds: Institutional, SL Agency Shares		5,873,387		2,491,597	²		—			8,364,984	$	8,364,984	$	4,158			—
BlackRock Cash Funds: Prime, SL Agency Shares		8,407,500		4,039,427	²		—			12,446,927	$	12,446,927	$	91,806	³		—
BlackRock Commodity Strategies Fund		12,540,270		733,238			(1,564,519	)		11,708,989	$	90,744,668		—		$	(4,068,457	)
BlackRock Emerging Markets Fund, Inc.		6,115,000		166,907			(888,951	)		5,392,956	$	105,000,851		—		$	(3,369	)
CoreAlpha Bond Master Portfolio	$	591,843,692	$	34,992,784	²		—		$	626,836,476	$	626,836,476	$	7,609,420		$	2,001,307
International Tilts Master Portfolio	$	378,538,181	$	46,517,919	²		—		$	425,056,100	$	425,056,100	$	6,874,957		$	(471,454	)
iShares Cohen & Steers REIT ETF		1,164,738		134,533			(119,944	)		1,179,327	$	105,679,493	$	1,643,616		$	2,925,544
iShares International Developed Real Estate ETF		3,234,964		255,884			(291,282	)		3,199,566	$	95,155,093	$	2,093,095		$	198,538
iShares MSCI Canada ETF		1,320,806		50,951			(47,129	)		1,324,628	$	35,327,829	$	281,104		$	(185,232	)
iShares MSCI EAFE Small-Cap ETF		1,198,374		38,785			(82,248	)		1,154,911	$	58,923,559	$	694,297		$	350,973
iShares TIPS Bond ETF		587,067		46,162			(23,773	)		609,456	$	68,289,545		—		$	81,503
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	325,759,398	$	79,295,413	²		—		$	405,054,811	$	405,054,811	$	3,453,856		$	2,569,084
Master Small Cap Index Series	$	75,431,704		—		$	(872,819	)¹	$	74,558,885	$	74,558,885	$	466,621		$	2,451,199
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)⁴		—		—			—			—		—	$	86,921			—
¹Represents net shares/beneficial interest sold.
²Represents net shares/beneficial interest purchased.
³ Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.
⁴No longer held by LifePath Master Portfolio as of report date.

(b)

Security, or a portion of security, is on loan.

(c)

Represents the current yield as of report date.

(d)

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

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that LifePath Master Portfolio has the ability to access

•

See Notes to Financial Statements.



62	BLACKROCK FUNDS III	JUNE 30, 2015


Schedule of Investments (concluded)		LifePath 2030 Master Portfolio

•

As of June 30, 2015, the following table summarizes LifePath Master Portfolio’s investments categorized in the disclosure hierarchy:


	Level 1		Level 2		Level 3	Total
Assets:
Investments:
Affiliated Investment Companies	$	579,932,949	$	2,146,666,891	—	$	2,726,599,840

LifePath Master Portfolio may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of June 30, 2015, collateral on securities loaned at value of $12,446,927 is categorized as Level 2 within the disclosure hierarchy.

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	63

Schedule of Investments June 30, 2015 (Unaudited)

LifePath 2040 Master Portfolio

(Percentages shown are based on Net Assets)


Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Equity Funds — 92.9%
Active Stock Master Portfolio	$	538,247,970	$	538,247,970
BlackRock Commodity Strategies Fund		9,325,340		72,271,386
BlackRock Emerging Markets Fund, Inc.		5,301,528		103,220,757
International Tilts Master Portfolio	$	405,329,662		405,329,662
iShares Cohen & Steers REIT ETF (b)		1,436,643		128,737,579
iShares International Developed Real Estate ETF		3,890,906		115,715,545
iShares MSCI Canada ETF (b)		1,292,596		34,473,535
iShares MSCI EAFE Small-Cap ETF (b)		1,058,710		54,015,385
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	417,828,938		417,828,938
Master Small Cap Index Series	$	46,118,000		46,118,000

				1,915,958,757
Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Fixed Income Fund — 6.8%
CoreAlpha Bond Master Portfolio	$	141,202,298	$	141,202,298
Short-Term Securities — 0.5%
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (c)		4,881,868		4,881,868
BlackRock Cash Funds: Prime, SL Agency Shares, 0.13% (c)(d)		5,760,219		5,760,219

				10,642,087
Total Affiliated Investment Companies (Cost — $1,946,219,650) — 100.2%				2,067,803,142
Liabilities in Excess of Other Assets — (0.2)%				(5,045,476	)

Net Assets — 100.0%			$	2,062,757,666

Notes to Schedule of Investments

(a)


Affiliate	Shares/ Beneficial Interest Held at December 31, 2014		Shares/ Beneficial Interest Purchased			Shares/ Beneficial Interest Sold			Shares/ Beneficial Interest Held at June 30, 2015		Value at June 30, 2015		Net Income			Realized Gain (Loss)
Active Stock Master Portfolio	$	617,793,419		—		$	(79,545,449	)¹	$	538,247,970	$	538,247,970	$	5,009,069		$	55,441,192
BlackRock Cash Funds: Institutional, SL Agency Shares		4,210,819		671,049	²		—			4,881,868	$	4,881,868	$	3,234			—
BlackRock Cash Funds: Prime, SL Agency Shares		16,314,800		—			(10,554,581	)¹		5,760,219	$	5,760,219	$	82,855	³		—
BlackRock Commodity Strategies Fund		10,188,103		739,637			(1,602,400	)		9,325,340	$	72,271,386		—		$	(4,299,494	)
BlackRock Emerging Markets Fund, Inc.		5,989,668		185,996			(874,136	)		5,301,528	$	103,220,757		—		$	(76,641	)
CoreAlpha Bond Master Portfolio	$	124,444,002	$	16,758,296	²		—		$	141,202,298	$	141,202,298	$	1,650,252		$	403,619
International Tilts Master Portfolio	$	367,981,472	$	37,348,190	²		—		$	405,329,662	$	405,329,662	$	6,677,693		$	(468,075	)
iShares Cohen & Steers REIT ETF		1,402,976		177,627			(143,960	)		1,436,643	$	128,737,579	$	2,001,057		$	3,452,518
iShares International Developed Real Estate ETF		3,883,740		347,863			(340,697	)		3,890,906	$	115,715,545	$	2,557,053		$	81,930
iShares MSCI Canada ETF		1,285,655		66,705			(59,764	)		1,292,596	$	34,473,535	$	274,168		$	(246,283	)
iShares MSCI EAFE Small-Cap ETF		1,170,755		37,611			(149,656	)		1,058,710	$	54,015,385	$	670,701		$	669,231
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	379,569,351	$	38,259,587	²		—		$	417,828,938	$	417,828,938	$	3,784,339		$	2,914,849
Master Small Cap Index Series	$	50,915,660		—		$	(4,797,660	)¹	$	46,118,000	$	46,118,000	$	309,958		$	1,599,845
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)⁴		—		—			—			—		—	$	18,936			—
¹Represents net shares/beneficial interest sold.
²Represents net shares/beneficial interest purchased.
³ Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.
⁴No longer held by LifePath Master Portfolio as of report date.

(b)

Security, or a portion of security, is on loan.

(c)

Represents the current yield as of report date.

(d)

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

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that LifePath Master Portfolio has the ability to access

•

See Notes to Financial Statements.



64	BLACKROCK FUNDS III	JUNE 30, 2015


Schedule of Investments (concluded)		LifePath 2040 Master Portfolio

As of June 30, 2015, the following table summarizes LifePath Master Portfolio’s investments categorized in the disclosure hierarchy:


	Level 1		Level 2		Level 3	Total
Assets:
Investments:
Affiliated Investment Companies	$	519,076,274	$	1,548,726,868	—	$	2,067,803,142

LifePath Master Portfolio may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of June 30, 2015, collateral on securities loaned at value of $5,760,220 is categorized as Level 2 within the disclosure hierarchy.

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	65

Schedule of Investments June 30, 2015 (Unaudited)

LifePath 2050 Master Portfolio

(Percentages shown are based on Net Assets)


Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Equity Funds — 98.5%
Active Stock Master Portfolio	$	143,666,018	$	143,666,018
BlackRock Commodity Strategies Fund		2,262,442		17,533,925
BlackRock Emerging Markets Fund, Inc.		1,314,492		25,593,151
International Tilts Master Portfolio	$	102,057,615		102,057,615
iShares Cohen & Steers REIT ETF		388,438		34,807,929
iShares International Developed Real Estate ETF		1,052,407		31,298,584
iShares MSCI Canada ETF		318,769		8,501,569
iShares MSCI EAFE Small-Cap ETF		277,242		14,144,887
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	89,967,968		89,967,968
Master Small Cap Index Series	$	11,057,362		11,057,362

				478,629,008
Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Fixed Income Fund — 1.5%
CoreAlpha Bond Master Portfolio	$	7,135,882	$	7,135,882
Short-Term Securities — 0.3%
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (b)		1,696,716		1,696,716
Total Affiliated Investment Companies (Cost — $469,220,606) — 100.3%				487,461,606
Liabilities in Excess of Other Assets — (0.3)%				(1,315,303	)

Net Assets — 100.0%			$	486,146,303

Notes to Schedule of Investments

(a)


Affiliate	Shares/ Beneficial Interest Held at December 31, 2014		Shares/ Beneficial Interest Purchased			Shares/ Beneficial Interest Sold			Shares/ Beneficial Interest Held at June 30, 2015		Value at June 30, 2015		Net Income			Realized Gain (Loss)
Active Stock Master Portfolio	$	147,719,967		—		$	(4,053,949	)¹	$	143,666,018	$	143,666,018	$	1,261,129		$	13,897,370
BlackRock Cash Funds: Institutional, SL Agency Shares		1,215,707		481,009	²		—			1,696,716	$	1,696,716	$	983			—
BlackRock Cash Funds: Prime, SL Agency Shares		2,950,000		—			(2,950,000	)¹		—		—	$	24,408	³		—
BlackRock Commodity Strategies Fund		2,193,346		284,474			(215,378	)		2,262,442	$	17,533,925		—		$	(608,055	)
BlackRock Emerging Markets Fund, Inc.		1,329,101		142,787			(157,396	)		1,314,492	$	25,593,151		—		$	(22,652	)
CoreAlpha Bond Master Portfolio	$	4,957,761	$	2,178,121	²		—		$	7,135,882	$	7,135,882	$	75,216		$	14,805
International Tilts Master Portfolio	$	81,873,561	$	20,184,054	²		—		$	102,057,615	$	102,057,615	$	1,606,010		$	(70,345	)
iShares Cohen & Steers REIT ETF		327,853		90,160			(29,575	)		388,438	$	34,807,929	$	505,366		$	641,680
iShares International Developed Real Estate ETF		901,660		214,025			(63,278	)		1,052,407	$	31,298,584	$	658,815		$	(65,370	)
iShares MSCI Canada ETF		285,386		42,757			(9,374	)		318,769	$	8,501,569	$	67,518		$	(9,460	)
iShares MSCI EAFE Small-Cap ETF		260,026		28,556			(11,340	)		277,242	$	14,144,887	$	166,367		$	(14,868	)
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	69,086,943	$	20,881,025	²		—		$	89,967,968	$	89,967,968	$	753,974		$	565,684
Master Small Cap Index Series	$	11,565,177		—		$	(507,815	)¹	$	11,057,362	$	11,057,362	$	73,478		$	389,849
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)⁴		—		—			—			—		—	$	868			—
¹Represents net shares/beneficial interest sold.
²Represents net shares/beneficial interest purchased.
³ Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.
⁴No longer held by LifePath Master Portfolio as of report date.

(b)

Represents the current yield as of report date.

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that LifePath Master Portfolio has the ability to access

•

See Notes to Financial Statements.



66	BLACKROCK FUNDS III	JUNE 30, 2015


Schedule of Investments (concluded)		LifePath 2050 Master Portfolio

As of June 30, 2015, the following table summarizes LifePath Master Portfolio’s investments categorized in the disclosure hierarchy:


	Level 1		Level 2		Level 3	Total
Assets:
Investments:
Affiliated Investment Companies	$	133,576,761	$	353,884,845	—	$	487,461,606

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	67


Statements of Assets and Liabilities		Master Investment Portfolio


June 30, 2015 (Unaudited)	LifePath Retirement Master Portfolio		LifePath 2020 Master Portfolio		LifePath 2030 Master Portfolio		LifePath 2040 Master Portfolio		LifePath 2050 Master Portfolio

Assets
Investments at value — affiliated^1,2	$	1,599,807,182	$	2,842,941,176	$	2,726,599,840	$	2,067,803,142	$	487,461,606
Receivables:
Investments sold		15,989,672		26,686,848		33,255,119		49,734,240		9,102,023
Contributions from investors		1,135,620		423,822		1,336,180		778,802		885,895
Dividends — affiliated		282,045		694,952		975,401		944,869		233,885
Securities lending income — affiliated		839		6,095		9,876		3,735		627

Total assets		1,617,215,358		2,870,752,893		2,762,176,416		2,119,264,788		497,684,036


Liabilities
Collateral on securities loaned at value		8,821,610		23,526,675		12,446,927		5,760,220		—
Payables:
Investments purchased		3,300,000		3,700,000		12,327,776		2,543,866		3,247,257
Trustees’ fees		8,283		15,078		13,613		10,311		1,422
Investment advisory fees		98,270		144,241		93,518		41,961		4,475
Professional fees		17,072		19,888		19,113		17,540		13,404
Withdrawals to investors		14,305,020		23,302,689		24,326,535		48,133,224		8,271,175

Total liabilities		26,550,255		50,708,571		49,227,482		56,507,122		11,537,733

Net Assets	$	1,590,665,103	$	2,820,044,322	$	2,712,948,934	$	2,062,757,666	$	486,146,303


Net Assets Consist of
Investors’ capital	$	1,538,000,563	$	2,706,243,075	$	2,580,115,069	$	1,941,174,174	$	467,905,303
Net unrealized appreciation (depreciation)		52,664,540		113,801,247		132,833,865		121,583,492		18,241,000

Net Assets	$	1,590,665,103	$	2,820,044,322	$	2,712,948,934	$	2,062,757,666	$	486,146,303

¹ Investments at cost — affiliated	$	1,547,142,642	$	2,729,139,929	$	2,593,765,975	$	1,946,219,650	$	469,220,606
² Securities loaned at value	$	8,638,272	$	23,012,781	$	12,083,964	$	5,597,971		—


Statements of Operations		Master Investment Portfolio


Six Months Ended June 30, 2015 (Unaudited)	LifePath Retirement Master Portfolio			LifePath 2020 Master Portfolio			LifePath 2030 Master Portfolio			LifePath 2040 Master Portfolio			LifePath 2050 Master Portfolio

Investment Income
Dividends — affiliated	$	396,673		$	2,222,318		$	4,712,112		$	5,502,979		$	1,398,066
Securities lending — affiliated — net		26,995			65,606			91,806			82,855			24,408
Income — affiliated		2,173			3,975			4,158			3,234			983
Net investment income allocated from the applicable Underlying Master Portfolios:
Dividends		5,845,500			13,742,489			17,939,179			17,008,396			3,986,051
Interest		11,139,104			15,947,117			8,610,900			2,046,031			137,435
Expenses		(1,682,245	)		(3,163,168	)		(3,003,172	)		(2,227,748	)		(508,635	)
Fees waived		237,060			602,254			729,113			623,568			155,824

Total income		15,965,260			29,420,591			29,084,096			23,039,315			5,194,132


Expenses
Investment advisory		2,789,343			5,036,171			4,801,525			3,724,118			828,943
Professional		13,215			13,670			13,670			13,488			13,014
Independent Trustees		24,532			42,181			39,739			31,322			8,696

Total expenses		2,827,090			5,092,022			4,854,934			3,768,928			850,653
Less fees waived by the Manager		(2,234,828	)		(4,231,537	)		(4,303,845	)		(3,512,841	)		(813,125	)

Total expenses after fees waived		592,262			860,485			551,089			256,087			37,528

Net investment income		15,372,998			28,560,106			28,533,007			22,783,228			5,156,604


Realized and Unrealized Gain (Loss)
Net realized gain (loss) from:
Investments — affiliated		(472,592	)		939,527			(700,500	)		(418,739	)		(78,725	)
Allocated from the applicable Underlying Master Portfolios from investments, financial futures contracts, swaps and foreign currency transactions		26,975,747			62,233,074			71,334,882			59,891,430			14,797,363

		26,503,155			63,172,601			70,634,382			59,472,691			14,718,638

Net change in unrealized depreciation on:
Investments — affiliated		(1,161,109	)		(5,951,726	)		(9,633,389	)		(11,484,044	)		(3,344,592	)
Allocated from the applicable Underlying Master Portfolios from investments, financial futures contracts, swaps and foreign currency translations		(23,447,876	)		(45,023,609	)		(40,640,935	)		(25,438,075	)		(7,036,221	)

		(24,608,985	)		(50,975,335	)		(50,274,324	)		(36,922,119	)		(10,380,813	)

Net realized and unrealized gain		1,894,170			12,197,266			20,360,058			22,550,572			4,337,825

Net Increase in Net Assets Resulting from Operations	$	17,267,168		$	40,757,372		$	48,893,065		$	45,333,800		$	9,494,429


Statements of Changes in Net Assets		Master Investment Portfolio


	LifePath Retirement Master Portfolio
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	15,372,998		$	32,131,672
Net realized gain		26,503,155			83,848,609
Net change in unrealized appreciation (depreciation)		(24,608,985	)		(33,798,562	)

Net increase in net assets resulting from operations		17,267,168			82,181,719


Capital Transactions
Proceeds from contributions		192,569,500			175,047,598
Value of withdrawals		(209,366,894	)		(253,441,996	)

Net decrease in net assets derived from capital transactions		(16,797,394	)		(78,394,398	)


Net Assets
Total increase in net assets		469,774			3,787,321
Beginning of period		1,590,195,329			1,586,408,008

End of period	$	1,590,665,103		$	1,590,195,329


Statements of Changes in Net Assets		Master Investment Portfolio


	LifePath 2020 Master Portfolio
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	28,560,106		$	57,673,762
Net realized gain		63,172,601			189,153,644
Net change in unrealized appreciation (depreciation)		(50,975,335	)		(94,650,978	)

Net increase in net assets resulting from operations		40,757,372			152,176,428


Capital Transactions
Proceeds from contributions		321,381,033			288,154,878
Value of withdrawals		(417,588,544	)		(396,106,580	)

Net decrease in net assets derived from capital transactions		(96,207,511	)		(107,951,702	)


Net Assets
Total increase (decrease) in net assets		(55,450,139	)		44,224,726
Beginning of period		2,875,494,461			2,831,269,735

End of period	$	2,820,044,322		$	2,875,494,461


Statements of Changes in Net Assets		Master Investment Portfolio


	LifePath 2030 Master Portfolio
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	28,533,007		$	54,291,020
Net realized gain		70,634,382			209,284,609
Net change in unrealized appreciation (depreciation)		(50,274,324	)		(114,220,706	)

Net increase in net assets resulting from operations		48,893,065			149,354,923


Capital Transactions
Proceeds from contributions		346,578,830			299,751,622
Value of withdrawals		(385,318,729	)		(397,791,695	)

Net decrease in net assets derived from capital transactions		(38,739,899	)		(98,040,073	)


Net Assets
Total increase in net assets		10,153,166			51,314,850
Beginning of period		2,702,795,768			2,651,480,918

End of period	$	2,712,948,934		$	2,702,795,768


Statements of Changes in Net Assets		Master Investment Portfolio


	LifePath 2040 Master Portfolio
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	22,783,228		$	42,311,359
Net realized gain		59,472,691			184,817,567
Net change in unrealized appreciation (depreciation)		(36,922,119	)		(107,609,728	)

Net increase in net assets resulting from operations		45,333,800			119,519,198


Capital Transactions
Proceeds from contributions		273,081,995			231,414,329
Value of withdrawals		(344,971,494	)		(326,313,422	)

Net decrease in net assets derived from capital transactions		(71,889,499	)		(94,899,093	)


Net Assets
Total increase (decrease) in net assets		(26,555,699	)		24,620,105
Beginning of period		2,089,313,365			2,064,693,260

End of period	$	2,062,757,666		$	2,089,313,365


Statements of Changes in Net Assets		Master Investment Portfolio


	LifePath 2050 Master Portfolio
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	5,156,604		$	8,351,985
Net realized gain		14,718,638			32,258,986
Net change in unrealized appreciation (depreciation)		(10,380,813	)		(18,115,900	)

Net increase in net assets resulting from operations		9,494,429			22,495,071


Capital Transactions
Proceeds from contributions		98,945,964			110,692,340
Value of withdrawals		(61,737,741	)		(109,007,078	)

Net increase in net assets derived from capital transactions		37,208,223			1,685,262


Net Assets
Total increase in net assets		46,702,652			24,180,333
Beginning of period		439,443,651			415,263,318

End of period	$	486,146,303		$	439,443,651


Financial Highlights		Master Investment Portfolio


	LifePath Retirement Master Portfolio
				Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Total Return
Total return		1.09%	¹		5.25%			6.75%			9.11%			4.46%			9.83%


Ratios to Average Net Assets
Total expenses		0.54%	^2,3,4,5		0.54%	^3,4,5		0.54%	^3,4,5		0.55%	^6,7,8		0.55%	^6,7,8		0.61%	⁶

Total expenses after fees waived and/or reimbursed		0.26%	^2,3,4,5		0.25%	^3,4,5		0.25%	^3,4,5		0.28%	^6,7,8		0.27%	^6,7,8		0.26%	⁶

Net investment income⁹		1.93%	^2,3,4,5		2.02%	^3,4,5		1.83%	^3,4,5		2.22%	^6,7,8		2.77%	^6,7,8		2.60%	⁶


Supplemental Data
Net assets, end of period (000)		$1,590,665			$1,590,195			$1,586,408			$1,491,576			$1,387,033			$1,380,141

Portfolio turnover rate		12%	¹⁰		14%	¹⁰		17%	¹⁰		4%	¹¹		4%	¹¹		4%	¹¹

Aggregate total return.

Annualized.

⁴

Includes the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated fees waived of 0.03% for the six months ended June 30, 2015 and each of the years ended December 31, 2014 and December 31, 2013, respectively.

⁵

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.10% for the six months ended June 30, 2015 and for the years ended December 31, 2014 and December 31, 2013, respectively, although the ratio does include the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series, Large Cap Index Master Portfolio and Total International ex U.S. Index Master Portfolio allocated expenses and/or net investment income.

⁶

Includes the LifePath Master Portfolio’s pro rata portion of expenses from Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series, and Total International ex U.S. Index Master Portfolio, except the total expenses for the year ended December 31, 2010, which include gross expenses. These ratios do not reflect any expenses incurred indirectly as a result of investments in BlackRock Cash Funds: Institutional, BlackRock Commodity Strategies Fund, BlackRock Emerging Markets Fund, Inc. and iShares exchange-traded funds.

⁷

Includes the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated fees waived of 0.03% and 0.02% for the years ended December 31, 2012 and December 31, 2011, respectively.

⁸

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.08% for each of the years ended December 31, 2012 and December 31, 2011, respectively, although the ratio does include the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated expenses and/or net investment income.

⁹

¹⁰

¹¹

Excludes purchases and sales of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 13%, 20% and 14% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights		Master Investment Portfolio


	LifePath 2020 Master Portfolio
				Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Total Return
Total return		1.35%	¹		5.56%			10.17%			11.49%			1.96%			11.40%


Ratios to Average Net Assets
Total expenses		0.53%	^2,3,4,5		0.54%	^3,4,5		0.53%	^3,4,5		0.53%	^6,7,8		0.53%	^6,7,8		0.59%	⁶

Total expenses after fees waived and/or reimbursed		0.24%	^2,3,4,5		0.24%	^3,4,5		0.23%	^3,4,5		0.25%	^6,7,8		0.25%	^6,7,8		0.23%	⁶

Net investment income⁹		1.98%	^2,3,4,5		2.01%	^3,4,5		1.97%	^3,4,5		2.30%	^6,7,8		2.56%	^6,7,8		2.45%	⁶


Supplemental Data
Net assets, end of period (000)		$2,820,044			$2,875,494			$2,831,270			$2,524,316			$2,358,583			$2,343,961

Portfolio turnover rate		10%	¹⁰		21%	¹⁰		19%	¹⁰		5%	¹¹		5%	¹¹		4%	¹¹

Aggregate total return.

Annualized.

⁴

Includes the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated fees waived of 0.04% for the six months ended June 30, 2015 and 0.04% and 0.03% for the years ended December 31, 2014 and December 31, 2013, respectively.

⁵

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.11%, 0.11% and 0.12%, for the six months ended June 30, 2015 and for the years ended December 31, 2014 and December 31, 2013, respectively, although the ratio does include the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series, Large Cap Index Master Portfolio and Total International ex U.S. Index Master Portfolio allocated expenses and/or net investment income.

⁶

Includes the LifePath Master Portfolio’s pro rata portion of expenses from Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series, and Total International ex U.S. Index Master Portfolio, except the total expenses for the year ended December 31, 2010, which include gross expenses. These ratios do not reflect any expenses incurred indirectly as a result of investments in BlackRock Cash Funds: Institutional, BlackRock Commodity Strategies Fund, BlackRock Emerging Markets Fund, Inc. and iShares exchange-traded funds.

⁷

Includes the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated fees waived of 0.03% for each of the years ended December 31, 2012 and December 31, 2011, respectively.

⁸

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.11% for each of the years ended December 31, 2012 and December 31, 2011, respectively, although the ratio does include the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated expenses and/or net investment income.

⁹

¹⁰

¹¹

Excludes purchases and sales of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 15%, 23% and 13% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights		Master Investment Portfolio


	LifePath 2030 Master Portfolio
				Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Total Return
Total return		1.77%	¹		5.82%			14.16%			13.59%			(0.13)%			12.36%


Ratios to Average Net Assets
Total expenses		0.52%	^2,3,4,5		0.53%	^3,4,5		0.52%	^3,4,5		0.53%	^6,7,8		0.52%	^6,7,8		0.57%	⁶

Total expenses after fees waived and/or reimbursed		0.21%	^2,3,4,5		0.21%	^3,4,5		0.20%	^3,4,5		0.23%	^6,7,8		0.22%	^6,7,8		0.21%	⁶

Net investment income⁹		2.08%	^2,3,4,5		2.02%	^3,4,5		2.13%	^3,4,5		2.37%	^6,7,8		2.39%	^6,7,8		2.34%	⁶


Supplemental Data
Net assets, end of period (000)		$2,712,949			$2,702,796			$2,651,481			$2,237,444			$2,014,111			$1,972,075

Portfolio turnover rate		12%	¹⁰		33%	¹⁰		22%	¹⁰		5%	¹¹		7%	¹¹		3%	¹¹

Aggregate total return.

Annualized.

⁴

Includes the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated fees waived of 0.05% for the six months ended June 30, 2015 and 0.05% and 0.04% for the years ended December 31, 2014 and December 31, 2013, respectively.

⁵

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.15%, 0.14% and 0.15% for the six months ended June 30, 2015 and for the years ended December 31, 2014 and December 31, 2013, respectively, although the ratio does include the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series, Large Cap Index Master Portfolio and Total International ex U.S. Index Master Portfolio allocated expenses and/or net investment income.

⁶

Includes the LifePath Master Portfolio’s pro rata portion of expenses from Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series, and Total International ex U.S. Index Master Portfolio, except the total expenses for the year ended December 31, 2010, which include gross expenses. These ratios do not reflect any expenses incurred indirectly as a result of investments in BlackRock Cash Funds: Institutional, BlackRock Commodity Strategies Fund, BlackRock Emerging Markets Fund, Inc. and iShares exchange-traded funds.

⁷

Includes the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated fees waived of 0.04% for each the years ended December 31, 2012 and December 31, 2011.

⁸

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.13% for each of the years ended December 31, 2012 and December 31, 2011, although the ratio does include the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated expenses and/or net investment income.

⁹

¹⁰

¹¹

Excludes purchases and sales of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 16%, 20% and 10% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights		Master Investment Portfolio


	LifePath 2040 Master Portfolio
				Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Total Return
Total return		2.10%	¹		5.98%			17.42%			15.23%			(1.88)%			13.21%


Ratios to Average Net Assets
Total expenses		0.50%	^2,3,4,5		0.53%	^3,4,5		0.51%	^3,4,5		0.52%	^6,7,8		0.52%	^6,7,8		0.55%	⁶

Total expenses after fees waived and/or reimbursed		0.17%	^2,3,4,5		0.19%	^3,4,5		0.18%	^3,4,5		0.21%	^6,7,8		0.20%	^6,7,8		0.19%	⁶

Net investment income⁹		2.14%	^2,3,4,5		2.03%	^3,4,5		2.26%	^3,4,5		2.44%	^6,7,8		2.24%	^6,7,8		2.24%	⁶


Supplemental Data
Net assets, end of period (000)		$2,062,758			$2,089,313			$2,064,693			$1,701,257			$1,509,756			$1,519,203

Portfolio turnover rate		10%	¹⁰		42%	¹⁰		26%	¹⁰		4%	¹¹		8%	¹¹		4%	¹¹

Aggregate total return.

Annualized.

⁴

Includes the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated fees waived of 0.06% for the six months ended June 30, 2015 and 0.06% and 0.05% for the years ended December 31, 2014 and December 31, 2013, respectively.

⁵

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.18%, 0.16% and 0.17% for the six months ended June 30, 2015 and for the years ended December 31, 2014 and December 31, 2013, respectively, although the ratio does include the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series, Large Cap Index Master Portfolio and Total International ex U.S. Index Master Portfolio allocated expenses and/or net investment income.

⁶

Includes the LifePath Master Portfolio’s pro rata portion of expenses from Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series, and Total International ex U.S. Index Master Portfolio, except the total expenses for the year ended December 31, 2010, which include gross expenses. These ratios do not reflect any expenses incurred indirectly as a result of investments in BlackRock Cash Funds: Institutional, BlackRock Commodity Strategies Fund, BlackRock Emerging Markets Fund, Inc. and iShares exchange-traded funds.

⁷

Includes the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated fees waived of 0.05% and 0.04% for the years ended December 31, 2012 and December 31, 2011, respectively.

⁸

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.15% for each of the years ended December 31, 2012 and December 31, 2013, respectively, although the ratio does include the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated expenses and/or net investment income.

⁹

¹⁰

¹¹

Excludes purchases and sales of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 14%, 20% and 9% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Financial Highlights		Master Investment Portfolio


	LifePath 2050 Master Portfolio
				Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Total Return
Total return		2.20%	¹		6.23%			20.32%			16.55%			(3.28)%			13.93%


Ratios to Average Net Assets
Total expenses		0.51%	^2,3,4,5		0.53%	^3,4,5		0.53%	^3,4,5		0.54%	^6,7,8		0.53%	^6,7,8		0.56%	⁶

Total expenses after fees waived and/or reimbursed		0.16%	^2,3,4,5		0.18%	^3,4,5		0.20%	^3,4,5		0.21%	^6,7,8		0.18%	^6,7,8		0.17%	⁶

Net investment income⁹		2.18%	^2,3,4,5		2.04%	^3,4,5		2.46%	^3,4,5		2.51%	^6,7,8		2.18%	^6,7,8		2.31%	⁶


Supplemental Data
Net assets, end of period (000)		$486,146			$439,444			$415,263			$267,851			$180,087			$119,391

Portfolio turnover rate		11%	¹⁰		48%	¹⁰		28%	¹⁰		5%	¹¹		13%	¹¹		5%	¹¹

Aggregate total return.

Annualized.

⁴

Includes the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated fees waived of 0.07% for the six months ended June 30, 2015 and 0.07% and 0.06% for the years ended December 31, 2014 and December 31, 2013, respectively.

⁵

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.19%, 0.17% and 0.15% for the six months ended June 30, 2015 and for the years ended December 31, 2014 and December 31, 2013, respectively, although the ratio does include the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series, Large Cap Index Master Portfolio and Total International ex U.S. Index Master Portfolio allocated expenses and/or net investment income.

⁶

Includes the LifePath Master Portfolio’s pro rata portion of expenses from Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series, and Total International ex U.S. Index Master Portfolio, except the total expenses for the year ended December 31, 2010, which include gross expenses. These ratios do not reflect any expenses incurred indirectly as a result of investments in BlackRock Cash Funds: Institutional, BlackRock Commodity Strategies Fund, BlackRock Emerging Markets Fund, Inc. and iShares exchange-traded funds.

⁷

Includes the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Large Cap Index Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated fees waived of 0.06% and 0.05% for the years ended December 31, 2012 and December 31, 2011, respectively.

⁸

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.15% and 0.17% for the years ended December 31, 2012 and December 31, 2011, respectively, although the ratio does include the LifePath Master Portfolio’s share of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio allocated expenses and/or net investment income.

⁹

¹⁰

¹¹

Excludes purchases and sales of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, Master Small Cap Index Series and Total International ex U.S. Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 15%, 19% and 12% for the years ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively.


Notes to Financial Statements (Unaudited)				Master Investment Portfolio

1. Organization:

Master Investment Portfolio (“MIP”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a diversified, open-end management investment company. MIP is organized as a Delaware statutory trust. The financial statements and these accompanying notes relate to five series of MIP: LifePath^® Retirement Master Portfolio, LifePath^® 2020 Master Portfolio, LifePath^® 2030 Master Portfolio, LifePath^® 2040 Master Portfolio and LifePath^® 2050 Master Portfolio (each, a “LifePath Master Portfolio” and collectively, the “LifePath Master Portfolios”).

As of June 30, 2015, the investment of LifePath 2040 Master Portfolio and LifePath 2050 Master Portfolio in the Active Stock Master Portfolio represented 26.1% and 29.6%, respectively, of net assets. The investment of LifePath Retirement Master Portfolio and LifePath 2020 Master Portfolio in CoreAlpha Bond Master Portfolio represented 50.3% and 40.9%, respectively, of net assets. As such, financial statements of Active Stock Master Portfolio and CoreAlpha Bond Master Portfolio, including the Schedule of Investments, should be read in conjunction with each respective the LifePath Master Portfolio’s financial statements. Active Stock Master Portfolio’s and CoreAlpha Bond Master Portfolio’s financial statements are available, without charge, on the SEC’s website at http://www.sec.gov.

The LifePath Master Portfolios will generally invest in other registered investment companies (each, an “Underlying Fund” and collectively, the “Underlying LifePath Master Portfolios”) that are managed by subsidiaries of BlackRock, Inc. (“BlackRock”) and its affiliates and affiliates of the LifePath Master Portfolios. The LifePath Master Portfolios may also invest in other master portfolios (“Underlying Master Portfolios”) that are managed by subsidiaries of BlackRock.

The value of a LifePath Master Portfolio’s investment in each of Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio and Master Small Cap Index Series reflects that LifePath Master Portfolio’s proportionate interest in the net assets of that master portfolio. As of June 30, 2015, the LifePath Master Portfolios held interests in Active Stock Master Portfolio, CoreAlpha Bond Master Portfolio, International Tilts Master Portfolio, Large Cap Index Master Portfolio and Master Small Cap Index Series as follows:


	Active Stock Master Portfolio		CoreAlpha Bond Master Portfolio		International Tilts Master Portfolio		Large Cap Index Master Portfolio		Master Small Cap Index Series
LifePath Retirement Master Portfolio		7.5%		26.7%		9.1%		5.5%		5.8%
LifePath 2020 Master Portfolio		22.9%		38.4%		22.1%		8.9%		9.8%
LifePath 2030 Master Portfolio		31.9%		20.9%		30.4%		11.7%		7.4%
LifePath 2040 Master Portfolio		27.9%		4.7%		28.9%		12.1%		4.6%
LifePath 2050 Master Portfolio		7.5%		0.2%		7.3%		2.6%		1.1%

2. Significant Accounting Policies:

Valuation: The LifePath Master Portfolios’ investments are valued at fair value as of the close of trading on the New York Stock Exchange (“NYSE”) (generally 4:00 p.m., Eastern time). U.S. GAAP defines fair value as the price the LifePath Master Portfolios would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The LifePath Master Portfolios determine the fair values of their financial instruments at market value using independent dealers or pricing services under policies approved by the Board of Trustees of MIP (the “Board”). 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 provide oversight of the pricing function for the LifePath Master Portfolios for all financial instruments. Investments in open-end registered investment companies are valued at net asset value (“NAV”) each business day. The market value of the LifePath Master Portfolios’ investments in the Underlying Funds is based on the published NAV of each Underlying Fund computed as of the close of regular trading on the NYSE on days when the NYSE is open. The LifePath Master Portfolios record their proportionate investment in the Underlying Master Portfolios at fair value which is based upon their pro rata ownership in the net assets of the Underlying Master Portfolios.



80	BLACKROCK FUNDS III	JUNE 30, 2015


Notes to Financial Statements (continued)		Master Investment Portfolio

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 consistent with the principles of fair value measurement. The pricing of all Fair Value Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.

Investment Transactions and Investment Income: For financial reporting purposes, investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on investment transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend date. Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when the LifePath Master Portfolios are informed of the ex-dividend date. 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, some 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 on the accrual basis.

Other: Expenses directly related to a LifePath Master Portfolio are charged to that LifePath Master Portfolio. Other operating expenses shared by several Funds are prorated among those Funds on the basis of relative net assets or other appropriate methods.

3. Securities and Other Investments:

Securities Lending: Certain LifePath Master Portfolios may lend their securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the LifePath Master Portfolios 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 LifePath Master Portfolios 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 LifePath Master Portfolios and any additional required collateral is delivered to the LifePath Master Portfolios, or excess collateral returned by the LifePath Master Portfolios, on the next business day. During the term of the loan, the LifePath Master Portfolios are entitled to all distributions made on or in respect of the loaned securities. 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.

The market value of securities on loan, all of which were classified as affiliated investments in the LifePath Master Portfolios’ Schedules of Investments, and the value of the related collateral are shown separately in the Statements of Assets and Liabilities as a component of investments at value-affiliated, and collateral on securities loaned at value, respectively. As of June 30, 2015, any securities on loan were collateralized by cash. The cash collateral invested by the securities lending agent, BlackRock Institutional Trust Company, N.A. (“BTC”), if any, is disclosed in the Schedules of Investments.

As of June 30, 2015, the following table is a summary of the LifePath Master Portfolios securities lending agreements by counterparty, which are subject to offset under an MSLA:


LifePath Retirement Master Portfolio
Counterparty	Securities Loaned at Value		Cash Collateral Received¹			Net Amount
Citigroup Global Markets, Inc.	$	3,249,450	$	(3,249,450	)		—
JP Morgan Securities LLC		952,425		(952,425	)		—
UBS Securities LLC		4,436,397		(4,436,397	)		—

Total	$	8,638,272	$	(8,638,272	)		—



BLACKROCK FUNDS III	JUNE 30, 2015	81


Notes to Financial Statements (continued)		Master Investment Portfolio


LifePath 2020 Master Portfolio
Counterparty	Securities Loaned at Value		Cash Collateral Received¹			Net Amount
Citigroup Global Markets, Inc.	$	22,342,770	$	(22,342,770	)		—
SG Americas Securities LLC		526,635		(526,635	)		—
UBS Securities LLC		143,376		(143,376	)		—

Total	$	23,012,781	$	(23,012,781	)		—


LifePath 2030 Master Portfolio
Counterparty	Securities Loaned at Value		Cash Collateral Received¹			Net Amount
Barclays Capital Inc.	$	10,567,507	$	(10,567,507	)		—
SG Americas Securities LLC		315,353		(315,353	)		—
UBS Securities LLC		1,201,104		(1,201,104	)		—

Total	$	12,083,964	$	(12,083,964	)		—


LifePath 2040 Master Portfolio
Counterparty	Securities Loaned at Value		Cash Collateral Received¹			Net Amount
Barclays Capital Inc.	$	4,595,241	$	(4,595,241	)		—
Credit Suisse Securities (USA) LLC		5,102		(5,102	)		—
SG Americas Securities LLC		155,294		(155,294	)		—
UBS Securities LLC		842,334		(842,334	)		—

Total	$	5,597,971	$	(5,597,971	)		—

Excess of collateral received from the individual counterparty is not shown for financial reporting purposes. Collateral has been received in connection with securities lending agreements as follows:

LifePath Retirement
Master Portfolio

LifePath 2020

Master Portfolio

LifePath 2030

Master Portfolio

LifePath 2040

Master Portfolio

$8,821,610

$23,526,675

$12,446,927

$5,760,220

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 LifePath Master Portfolios benefit from a borrower default indemnity provided by BlackRock. BlackRock’s indemnity allows for full replacement of the securities loaned if the collateral received does not cover the value on the securities loaned in the event of borrower default. Each LifePath Master Portfolio could suffer 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.

4. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock for 1940 Act purposes.

MIP, on behalf of the LifePath Master Portfolios, entered into an Administration Agreement with BlackRock Advisors, LLC (“BAL” or the “Administrator”), which has agreed to provide general administration services (other than investment advice and related portfolio activities). BAL, in consideration thereof, has agreed to bear all of the LifePath Master Portfolios’ and MIP’s ordinary operating expenses, excluding, generally, investment advisory fees, distribution fees, brokerage and other expenses related to the execution of portfolio transactions, extraordinary expenses and certain other expenses which are borne by the LifePath Master Portfolios.



82	BLACKROCK FUNDS III	JUNE 30, 2015


Notes to Financial Statements (continued)		Master Investment Portfolio

BAL is not entitled to compensation for providing administration services to the LifePath Master Portfolios, for so long as BAL is entitled to compensation for providing administration services to corresponding feeder funds that invest substantially all of their assets in the LifePath Master Portfolios, or BAL (or an affiliate) receives investment advisory fees from the LifePath Master Portfolios.

The U.S. Securities and Exchange Commission has issued an exemptive order which permits BTC, an affiliate of the Manager, to serve as securities lending agent for the LifePath Master Portfolios, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending. The LifePath Master Portfolios are responsible for fees in connection with the investment of cash collateral received for securities on loan in a money market fund managed by the Manager or its affiliates, however, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees the LifePath Master Portfolios bear to an annual rate of 0.04% (the “collateral investment fees”).

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 fees. Each LifePath Master Portfolio retains a portion of securities lending income and remits a remaining portion to BTC as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, each LifePath Master Portfolio retains 80% of securities lending income, and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees. In addition, commencing the business day following the date that the aggregate securities lending income earned across certain funds in the Equity-Liquidity Complex in a calendar year exceeds a specified threshold, each LifePath Master Portfolio, pursuant to the securities lending agreement, will retain for the remainder of the calendar year securities lending income in an amount equal to 85% of securities lending income, and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.

The share of securities lending income earned by the LifePath Master Portfolios is shown as securities lending — affiliated — net in the Statements of Operations. For the six months ended June 30, 2015, the LifePath Master Portfolios paid BTC the following amounts in total for securities lending agent services and collateral investment fees:


LifePath Retirement Master Portfolio	LifePath 2020 Master Portfolio	LifePath 2030 Master Portfolio	LifePath 2040 Master Portfolio	LifePath 2050 Master Portfolio
$6,696	$16,263	$22,949	$20,714	$6,102

Certain officers and/or trustees of MIP are officers and/or directors of BlackRock or its affiliates.

5. Purchases and Sales:

For the six months ended June 30, 2015, purchases and sales of investments in the Underlying Funds and Underlying Master Portfolios, excluding short-term securities, were as follows:


	LifePath Retirement Master Portfolio		LifePath 2020 Master Portfolio		LifePath 2030 Master Portfolio		LifePath 2040 Master Portfolio		LifePath 2050 Master Portfolio
Purchases	$	197,851,297	$	300,945,970	$	315,614,896	$	219,942,948	$	89,370,487
Sales	$	212,783,537	$	392,164,388	$	348,624,577	$	287,070,498	$	49,804,984

6. Income Tax Information:



BLACKROCK FUNDS III	JUNE 30, 2015	83


Notes to Financial Statements (concluded)		Master Investment Portfolio

As of June 30, 2015, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:


	LifePath Retirement Master Portfolio			LifePath 2020 Master Portfolio			LifePath 2030 Master Portfolio			LifePath 2040 Master Portfolio			LifePath 2050 Master Portfolio
Tax cost	$	1,548,003,404		$	2,734,879,350		$	2,601,255,512		$	1,951,043,373		$	470,192,277

Gross unrealized appreciation		67,848,076			139,583,852			157,138,224			140,748,899			22,645,696
Gross unrealized depreciation		(16,044,298	)		(31,522,026	)		(31,793,896	)		(23,989,130	)		(5,376,367	)

Net unrealized appreciation	$	51,803,778		$	108,061,826		$	125,344,328		$	116,759,769		$	17,269,329

7. Bank Borrowings:

MIP, on behalf of the LifePath Master Portfolios, along with certain other LifePath Master Portfolios managed by the Manager and its affiliates (“Participating Funds”), is a party to a 364-day, $2.1 billion credit agreement with a group of lenders, under which the LifePath Master Portfolios may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual LifePath Master Portfolios, the Participating Funds, including the LifePath Master Portfolios, can borrow up to an aggregate commitment amount of $1.6 billion, subject to asset coverage and other limitations as specified in the agreement. The credit agreement has the following terms: a fee of 0.06% 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 2016 unless extended or renewed. Participating Funds paid administration, legal and arrangement fees, which are included in miscellaneous expenses in the Statements of Operations, and along with commitment fees, were allocated among such LifePath Master Portfolios based upon portions of the aggregate commitment available to them and relative net assets of Participating LifePath Master Portfolios. During the six months ended June 30, 2015, the LifePath Master Portfolios did not borrow under the credit agreement.

8. Principal Risks:

9. Subsequent Events:



84	BLACKROCK FUNDS III	JUNE 30, 2015


Disclosure of Investment Advisory Agreement

The Board of Trustees of Master Investment Portfolio (the “Master Fund”) met in person on April 21, 2015 (the “April Meeting”) and May 18-20, 2015 (the “May Meeting”) to consider the approval of the investment advisory agreement (the “Agreement”) between the Master Fund, on behalf of LifePath Retirement Master Portfolio, LifePath 2020 Master Portfolio, LifePath 2030 Master Portfolio, LifePath 2040 Master Portfolio and LifePath 2050 Master Portfolio (each, a “Master Portfolio” and collectively, the “Master Portfolios”), each a series of the Master Fund, and BlackRock Fund Advisors (the “Manager” or “BlackRock”), the Master Fund’s investment advisor. Each of LifePath Retirement Fund, LifePath 2020 Fund, LifePath 2030 Fund, LifePath 2040 Fund and LifePath 2050 Fund (each, a “Portfolio” and collectively, the “Portfolios”), each a series of BlackRock Funds III (the “Fund”), is a “feeder” fund that invests all of its investable assets in the corresponding Master Portfolio. Accordingly, the Board of Trustees of the Fund also considered the approval of the Agreement with respect to each Master Portfolio. For simplicity: (a) the Board of Trustees of the Master Fund and the Board of Trustees of the Fund are referred to herein collectively as the “Board,” and the members are referred to as “Board Members;” and (b) the shareholders of each Portfolio and the interest holders of each Master Portfolio are referred to as “shareholders.”

Activities and Composition of the Board

The Agreement

Pursuant to the 1940 Act, the Board is required to consider the continuation of the Agreement on an annual basis. The Board has four quarterly meetings per year, each extending over two days, a fifth one-day meeting to consider specific information surrounding the consideration of renewing the Agreement, and additional in-person and telephonic meetings as needed. In connection with this year-long deliberative process, the Board assessed, among other things, the nature, extent and quality of the services provided to the Master Portfolios and the Portfolios by BlackRock, BlackRock’s personnel and affiliates, including (as applicable) investment management services; administrative and shareholder services; the oversight of fund service providers; marketing services; risk oversight; compliance; and ability to meet applicable legal and regulatory requirements.

The Board, acting directly and through its committees, considers at each of its meetings, and from time to time as appropriate, factors that are relevant to its annual consideration of the renewal of the Agreement, including the services and support provided by BlackRock to the Master Portfolios, the Portfolios and their shareholders. Among the matters the Board considered were: (a) investment performance for one-year, three-year, five-year and/or since inception periods, as applicable, against peer funds, applicable benchmark, and performance metrics, as applicable, as well as senior management’s and portfolio managers’ analysis of the reasons for any over performance or underperformance of a Master Portfolio/Portfolio relative to its peers, benchmark, and other performance metrics, as applicable; (b) fees, including advisory, administration, if applicable, and other amounts paid to BlackRock and its affiliates by the Master Portfolios and/or the Portfolios for services, such as marketing and distribution, call center and fund accounting; (c) the Master Portfolios’ and /or the Portfolios’ operating expenses and how BlackRock allocates expenses to the Master Portfolios and the Portfolios; (d) the resources devoted to, risk oversight of, and compliance reports relating to, implementation of each Master Portfolio’s and Portfolio’s investment objective(s), policies and restrictions, and meeting new regulatory requirements; (e) the Master Fund’s and the Fund’s compliance with its respective compliance policies and procedures; (f) the nature, cost and character of non-investment management services provided by BlackRock and its affiliates; (g) BlackRock’s and other service providers’ internal controls and risk and compliance oversight mechanisms; (h) BlackRock’s implementation of the proxy voting policies approved by the Board; (i) the use of brokerage commissions and execution quality of portfolio transactions; (j) BlackRock’s implementation of the Master Fund’s and/or the Fund’s valuation and liquidity procedures; (k) an analysis of management fees for products with similar investment mandates across the open-end fund, exchange-traded fund (“ETF”), closed-end fund and institutional account product channels, as applicable, and the similarities and differences between these products and the services provided as compared to the Master Portfolios and/or the Portfolios; (l) BlackRock’s compensation methodology for its investment professionals and the incentives it creates, along with investment professionals’ investments in the fund(s) they manage; and (m) periodic updates on BlackRock’s business.



BLACKROCK FUNDS III	JUNE 30, 2015	85


Disclosure of Investment Advisory Agreement (continued)

Board Considerations in Approving the Agreement

The Approval Process: Prior to the April Meeting, the Board requested and received materials specifically relating to the Agreement. The Board is continuously engaged in a process with its independent legal counsel and BlackRock to review the nature and scope of the information provided to better assist its deliberations. The materials provided in connection with the April Meeting included (a) information independently compiled and prepared by Lipper, Inc. (“Lipper”) on fees and expenses of each Master Portfolio and Portfolio, as applicable, as compared with a peer group of funds as determined by Lipper (“Expense Peers”) and the investment performance of each Portfolio as compared with a peer group of funds as determined by Lipper¹ and the applicable Morningstar Classification; (b) information on the profits realized by BlackRock and its affiliates pursuant to the Agreement and a discussion of fall-out benefits to BlackRock and its affiliates; (c) a general analysis provided by BlackRock concerning investment management fees charged to other clients, such as institutional clients, sub-advised mutual funds, ETFs and closed-end funds, under similar investment mandates, as well as the performance of such other clients, as applicable; (d) review of non-management fees; (e) the existence, impact and sharing of potential economies of scale; (f) a summary of aggregate amounts paid by each Master Portfolio and/or Portfolio to BlackRock; (g) sales and redemption data regarding each Portfolio’s shares; and (h) if applicable, a comparison of management fees to similar BlackRock open-end funds, as classified by Lipper.

At the May Meeting, the Board of the Master Fund, including the Independent Board Members, approved the continuation of the Agreement between the Manager and the Master Fund with respect to each Master Portfolio for a one-year term ending June 30, 2016. The Board of the Fund, including the Independent Board Members, also considered the continuation of the Agreement with respect to each Master Portfolio and found the Agreement to be satisfactory. In approving the continuation of the Agreement, the Board of the Master Fund considered: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of each Master Portfolio, each Portfolio and BlackRock; (c) the advisory fee and the cost of the services and profits to be realized by BlackRock and its affiliates from their relationship with the Master Portfolios and the Portfolios; (d) each Portfolio’s costs to investors compared to the costs of Expense Peers and performance compared to the relevant performance comparison as previously discussed; (e) the sharing of potential economies of scale; (f) fall-out benefits to BlackRock and its affiliates as a result of its relationship with the Master Portfolios and the Portfolios; and (g) other factors deemed relevant by the Board Members.

The Board also considered other matters it deemed important to the approval process, such as payments made to BlackRock or its affiliates relating to the distribution of Portfolio shares, securities lending and cash management, services related to the valuation and pricing of portfolio holdings of each Master Portfolio, direct and indirect benefits to BlackRock and its affiliates from their relationship with the Master Portfolios and the Portfolios and advice from independent legal counsel with respect to the review process and materials submitted for the Board’s review. The Board noted the willingness of BlackRock personnel to engage in open, candid discussions with the Board. The Board did not identify any particular information as determinative, and each Board Member may have attributed different weights to the various items considered.

A. Nature, Extent and Quality of the Services Provided by BlackRock: The Board, including the Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of each Portfolio. Throughout the year, the Board compared each Portfolio’s performance to the performance of a comparable group of mutual funds, relevant benchmark, and performance metrics, as applicable. The Board met with BlackRock’s senior management personnel responsible for investment activities, including the senior investment officers. The Board also reviewed the materials provided by each Master Portfolio’s portfolio management team discussing the relevant Master Portfolio’s performance and the Master Portfolio’s investment objective(s), strategies and outlook.

Funds are ranked by Lipper in quartiles, ranging from first to fourth, where first is the most desirable quartile position and fourth is the least desirable.



86	BLACKROCK FUNDS III	JUNE 30, 2015


Disclosure of Investment Advisory Agreement (continued)

B. The Investment Performance of the Master Portfolios, the Portfolios and BlackRock: The Board, including the Independent Board Members, also reviewed and considered the performance history of each Master Portfolio and Portfolio, as applicable. The Board noted that each Portfolio’s investment results correspond directly to the investment results of the applicable Master Portfolio. In preparation for the April Meeting, the Board worked with its independent legal counsel, BlackRock and Lipper to develop a template for, and was provided with, reports independently prepared by Lipper, which included a comprehensive analysis of each Portfolio’s performance. The Board also reviewed a narrative and statistical analysis of the Lipper data that was prepared by BlackRock. In connection with its review, the Board received and reviewed information regarding the investment performance of each Portfolio as compared to other funds in its applicable Lipper category and the applicable Morningstar Classification. The Board was provided with a description of the methodology used by Lipper to select peer funds and periodically meets with Lipper representatives to review its methodology. The Board and its Performance Oversight and Contract Committee regularly review, and meet with Master Portfolio management to discuss, the performance of each Master Portfolio and Portfolio, as applicable, throughout the year.

BlackRock believes that the Morningstar Performance Universe is an appropriate performance metric for each of the Portfolios.

The Board noted that for the one-, three- and five-year periods reported, each of LifePath Retirement Fund, LifePath 2020 Fund, LifePath 2040 Fund and LifePath 2050 Fund ranked in the second, third and third quartiles, respectively, against its respective Morningstar Performance Universe. The Board noted the improved performance of each of these Portfolios during the one-year period. The Board and BlackRock reviewed and discussed the reasons for the underperformance of these Portfolios during the three- and five-year periods. With respect to each of these Portfolios, the Board was informed that, among other things, asset allocation was the primary driver of underperformance relative to the Portfolio’s Morningstar Performance Universe. Given each Portfolio’s more measured glidepath, performance has lagged somewhat given the substantial rally of equity and equity-like asset classes over the three- and five-year periods.

The Board noted that for the one-, three- and five-year periods reported, LifePath 2030 Fund ranked in the third, third and fourth quartiles, respectively, against its Morningstar Performance Universe. The Board and BlackRock reviewed and discussed the reasons for the underperformance of the Portfolio during these periods. The Board was informed that, among other things, asset allocation was the primary driver of underperformance relative to the Portfolio’s Morningstar Performance Universe. Given the Portfolio’s more measured glidepath, performance has lagged somewhat given the substantial rally of equity and equity-like asset classes over the one-, three- and five-year periods.

The Board and BlackRock also discussed BlackRock’s strategy for improving the performance of each Master Portfolio/Portfolio and BlackRock’s commitment to providing the resources necessary to assist the portfolio managers of each Master Portfolio in seeking to do so.

C. Consideration of the Advisory/Management Fees and the Cost of the Services and Profits to be Realized by BlackRock and its Affiliates from their Relationship with the Master Portfolios and the Portfolios: The Board, including the Independent Board Members, reviewed each Master Portfolio’s contractual advisory fee rate compared with the other funds in the corresponding Portfolio’s Lipper category. The contractual advisory fee rate is shown before taking into account any reimbursements or fee waivers. The Board also compared each Portfolio’s total expense ratio, as well as each Master Portfolio’s actual advisory fee rate, to those of other funds in the corresponding Portfolio’s Lipper category. The total expense ratio represents a fund’s total net operating expenses, including any 12b-1 or non-12b-1 service fees. The total expense ratio gives effect to any expense reimbursements or fee waivers that benefit a fund, and the actual advisory fee rate gives effect to any advisory fee reimbursements or waivers that benefit a fund. The Board considered the services provided and the fees charged by BlackRock and its affiliates to other types of clients with similar investment mandates, as applicable, including institutional accounts and sub-advised mutual funds.



BLACKROCK FUNDS III	JUNE 30, 2015	87


Disclosure of Investment Advisory Agreement (continued)

waivers and expense reimbursements by the Manager, the types of funds managed, precision of expense allocations and business mix. As a result, calculating and comparing profitability at individual fund levels is difficult.

The Board noted that the varying fee structures for fund of funds can limit the value of advisory fee comparisons.

The Board also noted that LifePath Retirement Master Portfolio’s contractual advisory fee rate ranked second out of two funds, and that the actual advisory fee rate and the corresponding Portfolio’s total expense ratio ranked second out of two funds and in the fourth quartile, respectively, relative to the Portfolio’s Expense Peers.

The Board also noted that LifePath 2020 Master Portfolio’s contractual advisory fee rate ranked in the second quartile, and that the actual advisory fee rate and the corresponding Portfolio’s total expense ratio ranked in the second and fourth quartiles, respectively, relative to the Portfolio’s Expense Peers.

The Board also noted that LifePath 2030 Master Portfolio’s contractual advisory fee rate ranked in the third quartile, and that the actual advisory fee rate and the corresponding Portfolio’s total expense ratio ranked in the second and fourth quartiles, respectively, relative to the Portfolio’s Expense Peers. The Board determined that the Portfolio’s total expense ratio was appropriate in light of the median total expense ratio paid by its Expense Peers.

The Board also noted that LifePath 2040 Master Portfolio’s contractual advisory fee rate ranked in the third quartile, and that the actual advisory fee rate and the corresponding Portfolio’s total expense ratio ranked in the second and third quartiles, respectively, relative to the Portfolio’s Expense Peers. The Board determined that the Portfolio’s total expense ratio was appropriate in light of the median total expense ratio paid by its Expense Peers.

The Board also noted that LifePath 2050 Master Portfolio’s contractual advisory fee rate ranked in the third quartile, and that the actual advisory fee rate and the corresponding Portfolio’s total expense ratio ranked in the first and third quartiles, respectively, relative to the Portfolio’s Expense Peers. The Board determined that the Portfolio’s total expense ratio was appropriate in light of the median total expense ratio paid by its Expense Peers.

D. Economies of Scale: The Board, including the Independent Board Members, considered the extent to which economies of scale might be realized as the assets of the Master Portfolios and the Portfolios increase, as well as the existence of expense caps, as applicable. The Board also considered the extent to which the Master Portfolios and the Portfolios benefit from such economies and whether there should be changes in the advisory fee rate or breakpoint structure in order to enable the Master Portfolios and the Portfolios to participate in these economies of scale, for example through the use of breakpoints in the advisory fee based upon the asset level of the Master Portfolios. In their consideration, the Board Members took into account the existence of any expense caps and further considered the continuation and/or implementation, as applicable, of such caps.

E. Other Factors Deemed Relevant by the Board Members: The Board, including the Independent Board Members, also took into account other ancillary or “fall-out” benefits that BlackRock or its affiliates may derive from their respective relationships with the Master Portfolios and the Portfolios, both tangible and intangible, such as BlackRock’s ability to leverage its investment professionals who manage other portfolios and risk management personnel, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates as service providers to the Master Portfolios and the Portfolios, including for administrative, distribution, securities lending and cash management services. The Board also considered BlackRock’s overall operations and its efforts to expand the scale of, and improve the quality of, its operations. The Board also noted that BlackRock may use and benefit from third party research obtained by soft dollars generated by certain registered fund transactions to assist in managing all or a number of its



88	BLACKROCK FUNDS III	JUNE 30, 2015


Disclosure of Investment Advisory Agreement (concluded)

other client accounts. The Board further noted that it had considered the investment by BlackRock’s funds in affiliated ETFs without any offset against the management fees payable by the funds to BlackRock.

Conclusion



BLACKROCK FUNDS III	JUNE 30, 2015	89


Officers and Trustees

Rodney D. Johnson, Chair of the Board and Trustee

David O. Beim, Trustee

Collette Chilton, Trustee

Frank J. Fabozzi, Trustee

Dr. Matina S. Horner, Trustee

Herbert I. London, Trustee

Cynthia A. Montgomery, Trustee

Barbara G. Novick, Trustee

Joseph P. Platt, Trustee

Robert C. Robb, Jr., Trustee

Toby Rosenblatt, Trustee

Mark Stalnecker, Trustee

Kenneth L. Urish, Trustee

Frederick W. Winter, Trustee

John M. Perlowski, President and Chief Executive Officer

Richard Hoerner, CFA, Vice President

Jennifer McGovern, Vice President

Neal Andrews, Chief Financial Officer

Jay Fife, Treasurer

Charles Park, Chief Compliance Officer

Fernanda Piedra, Anti-Money Laundering Compliance Officer

Benjamin Archibald, Secretary

Effective March 1, 2015, Charles Park resigned as Anti-Money Laundering Compliance Officer of the Trust/MIP and Fernanda Piedra became Anti-Money Laundering Compliance Officer of the Trust/MIP.

Effective May 18, 2015, Ian MacKinnon resigned as a Trustee of the Trust/MIP.



90	BLACKROCK FUNDS III	JUNE 30, 2015


Additional Information


General Information

Householding

Availability of Quarterly Schedule of Investments

The LifePath Funds/LifePath Master Portfolios file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The LifePath Funds’/LifePath Master Portfolios’ Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The LifePath Funds’/LifePath Master Portfolios’ Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762.

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the LifePath Funds/LifePath Master Portfolios use to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling (800) 441-7762; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.

Availability of Proxy Voting Record

Information about how the LifePath Funds/LifePath Master Portfolios voted proxies relating to securities held in the LifePath Funds’/LifePath Master Portfolios’ portfolios during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com or by calling (800) 441-7762 and (2) on the SEC’s website at http://www.sec.gov.

BlackRock’s Mutual Fund Family


Shareholder Privileges

Account Information

Automatic Investment Plans

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

Systematic Withdrawal Plans

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

Retirement Plans

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



BLACKROCK FUNDS III	JUNE 30, 2015	91


Additional Information (concluded)


BlackRock Privacy Principles



92	BLACKROCK FUNDS III	JUNE 30, 2015

This report are 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 a LifePath Fund unless preceded or accompanied by that LifePath 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.

LOGO


LifePath-6/15-SAR

JUNE 30, 2015

SEMI-ANNUAL REPORT (UNAUDITED)

BlackRock Funds III

^Ø	BlackRock LifePath^® Index Retirement Fund

^Ø	BlackRock LifePath^® Index 2020 Fund

^Ø	BlackRock LifePath^® Index 2025 Fund

^Ø	BlackRock LifePath^® Index 2030 Fund

^Ø	BlackRock LifePath^® Index 2035 Fund

^Ø	BlackRock LifePath^® Index 2040 Fund

^Ø	BlackRock LifePath^® Index 2045 Fund

^Ø	BlackRock LifePath^® Index 2050 Fund

^Ø	BlackRock LifePath^® Index 2055 Fund

Not FDIC Insured • May Lose Value • No Bank Guarantee


Table of Contents


	Page
The Markets in Review		3
Semi-Annual Report:
Fund Summaries		4
About Fund Performance		14
Disclosure of Expenses		15
Fund Financial Statements:
Statements of Assets and Liabilities		16
Statements of Operations		18
Statements of Changes in Net Assets		20
Fund Financial Highlights		25
Fund Notes to Financial Statements		52
Master Portfolio Information		60
Master Portfolio Financial Statements:
Schedules of Investments		63
Statements of Assets and Liabilities		81
Statements of Operations		83
Statements of Changes in Net Assets		85
Master Portfolio Financial Highlights		90
Master Portfolio Notes to Financial Statements		99
Disclosure of Investment Advisory Agreement		105
Officers and Trustees		110
Additional Information		111

LOGO



2	BLACKROCK FUNDS III	JUNE 30, 2015

The Markets in Review

Dear Shareholder,

Sincerely,

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

LOGO

Rob Kapito

President, BlackRock Advisors, LLC


Total Returns as of June 30, 2015
	6-month			12-month
U.S. large cap equities (S&P 500^® Index)		1.23	%		7.42	%
U.S. small cap equities (Russell 2000^® Index)		4.75			6.49
International equities (MSCI Europe, Australasia, Far East Index)		5.52			(4.22	)
Emerging market equities (MSCI Emerging Markets Index)		2.95			(5.12	)
3-month Treasury bills (BofA Merrill Lynch 3-Month U.S. Treasury Bill Index)		0.01			0.02
U.S. Treasury securities (BofA Merrill Lynch 10-Year U.S. Treasury Index)		(0.51	)		3.79
U.S. investment-grade bonds (Barclays U.S. Aggregate Bond Index)		(0.10	)		1.86
Tax-exempt municipal bonds (S&P Municipal Bond Index)		0.01			3.00
U.S. high yield bonds (Barclays U.S. Corporate High Yield 2% Issuer Capped Index)		2.53			(0.39	)
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.



		THIS PAGE NOT PART OF YOUR FUND REPORT				3


Fund Summary as of June 30, 2015				BlackRock LifePath Index Funds

Portfolio Management Commentary

How did each Fund perform?

•

Each of the BlackRock LifePath Index Funds with target dates of 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055 and BlackRock LifePath Index Retirement Fund (together, the “LifePath Index Funds”) invest in their respective LifePath Index Master Portfolio.

•

For the six-month period ended June 30, 2015, the LifePath Index Fund with a target date of 2045 outperformed the custom benchmark, while the LifePath Index Funds with target dates of 2035, 2040, 2050 and 2055 had mixed performance with Institutional Shares and Class K Shares outperforming and Investor A Shares performing in line with the custom benchmark. For the same period, Institutional Shares and Class K Shares of the LifePath Index 2020, 2030, and Retirement Funds performed in line while Investor A Shares underperformed the custom benchmark. Also for the same period, LifePath Index 2025 Fund’s Institutional Shares outperformed the custom benchmark while Investor A Shares underperformed and Class K Shares performed in line. The returns for the LifePath Index Fund include fund expenses. The custom benchmarks have no expenses associated with performance.

What factors influenced performance?

•

Equity markets outperformed fixed income markets during the period. As a result, the LifePath Index Funds with longer time horizons generated higher returns on an absolute basis given their larger allocations to equity investments.

•

While most of the LifePath Index Funds outperformed their benchmark, outperformance was greater in the longer-dated LifePath Index Funds (2035 to 2055). Positive performance differences were largely due to the impact of the pricing dislocation of international assets that occurred at the end of 2014 and reversed at the beginning of the period in 2015, favorably affecting the BlackRock Total International ex U.S. Index Master Portfolio’s performance.

•

During the period, there were no material detractors from fund performance relative to the benchmark.

Describe recent Fund activity.

•

Each LifePath Index Fund has its own time horizon, which affects its acceptable level of risk and, in turn, the strategic allocation of its holdings across asset classes. On a quarterly basis, the strategic allocation of each LifePath Index Fund is systematically adjusted to reflect the shareholders’ remaining investment time horizon. During the period, the LifePath Index Funds were rebalanced in accordance with their updated strategic allocations. Daily cash flows were allocated to the underlying funds and instruments as appropriate.

Describe Fund positioning at period end.

•

At period end, each of the LifePath Index Funds was invested according to its respective strategic allocation benchmark within tolerance limits.

Glide Path Evolution

Under normal circumstances, the asset allocation of each LifePath Index Fund will change over time according to a “glide path” as each LifePath Index Fund approaches its respective target date. The glide path represents the shifting of asset classes over time. Each LifePath Index Fund’s asset mix becomes more conservative prior to retirement as time elapses. This reflects the need for reduced investment risks as retirement approaches and the need for lower volatility of each LifePath Index Fund, which may be a primary source of income after retirement. As each LifePath Index Fund approaches its target date, its asset allocation will shift so that each LifePath Index Fund invests a greater percentage of its assets in fixed income funds. The asset allocation targets are established by a committee of BlackRock investment professionals that includes the portfolio managers. The investment team, including the portfolio managers and this investment committee, meets regularly to assess market conditions, review the asset allocation targets of each LifePath Index Fund, and determine whether any changes are required to enable each LifePath Index Fund to achieve its investment objective.

Although the asset allocation targets listed for the glide path are general, long-term targets, BlackRock investment professionals may periodically adjust the proportion of equity and fixed income funds in each LifePath Index Fund, based on an assessment of the current market conditions, the potential contribution of each asset class to the expected risk and return characteristics of each LifePath Index Fund, reallocations of each LifePath Index Fund’s composition to reflect intra-year movement along the glide path and other factors. In general, such adjustments will be limited, however, BlackRock investment professionals may determine that a greater degree of variation is warranted to protect each LifePath Index Fund or achieve each LifePath Index Fund’s investment objective.



4	BLACKROCK FUNDS III	JUNE 30, 2015


				BlackRock LifePath Index Retirement Fund

Investment Objective

BlackRock LifePath^® Index Retirement Fund’s (“LifePath Index Retirement Fund” or the “LifePath Index Fund”) investment objective is to seek to provide for retirement outcomes based on quantitatively measured risk. In pursuit of this objective, the LifePath Index Fund will be broadly diversified across global asset classes.

Effective March 31, 2015, the LifePath^® Index Retirement Portfolio changed its name to the BlackRock LifePath^® Index Retirement Fund.

Total Return Based on a $10,000 Investment

LOGO

The LifePath Index Fund compares its performance to that of a customized weighted index (the “LifePath Index Retirement Fund Custom Benchmark”), comprised of the indexes indicated below, which reflects the investment advisor’s changes to the benchmark’s weightings over time. The investment advisor adjusts the weightings of these indexes periodically based upon its evaluation and adjustment of the LifePath Index Fund’s asset allocation strategy. The weightings are presented annually but they are adjusted quarterly.

Commencement of operations.

LifePath Index Fund’s custom benchmark consists of the following:


Period	Barclays U.S. Aggregate Bond Index			Barclays U.S. Treasury Inflation Protected Securities (TIPS) Index (Series L)			FTSE EPRA/NAREIT Developed Real Estate Index			MSCI ACWI ex-USA IMI Index			Russell 1000^® Index			Russell 2000^® Index
7/01/11 to 6/30/12		52.9	%		9.1	%		N/A			10.9	%		23.2	%		3.9	%
7/01/12 to 6/30/13		52.9			9.1			0.4	%		11.8			21.6			4.2
7/01/13 to 6/30/14		52.9			9.1			0.2			12.0			21.3			4.5
7/01/14 to 6/30/15		51.9			8.9			0.5			12.7			22.1			4.0

See “About Fund Performance” on page 14 for descriptions of the indexes.

Performance Summary for the Period Ended June 30, 2015


				Average Annual Total Returns
	6-Month Total Returns			1 Year			Since Inception³
Institutional		1.18	%		1.89	%		5.61	%
Investor A		1.06			1.75			5.36
Class K		1.20			2.03			5.65
LifePath Index Retirement Fund Custom Benchmark		1.22			2.15			5.78
Barclays U.S. Aggregate Bond Index		(0.10	)		1.86			3.07
Barclays U.S. TIPS Index (Series L)		0.34			(1.73	)		2.36
FTSE EPRA/NAREIT Developed Real Estate Index		(3.20	)		(0.36	)		6.06
MSCI ACWI ex-USA IMI Index		4.59			(4.97	)		2.60
Russell 1000^® Index		1.71			7.37			13.44
Russell 2000^® Index		4.75			6.49			11.58

The LifePath Index Fund commenced operations on May 31, 2011.

Past performance is not indicative of future results.



BLACKROCK FUNDS III	JUNE 30, 2015	5


		BlackRock LifePath Index 2020 Fund

Investment Objective

BlackRock LifePath^® Index 2020 Fund’s (“LifePath Index 2020 Fund” or the “LifePath Index Fund”) investment objective is to seek to provide for retirement outcomes based on quantitatively measured risk. In pursuit of this objective, the LifePath Index Fund will be broadly diversified across global asset classes, with asset allocations becoming more conservative over time.

Effective March 31, 2015, the LifePath^® Index 2020 Portfolio changed its name to the BlackRock LifePath^® Index 2020 Fund.

Total Return Based on a $10,000 Investment

LOGO

The LifePath Index Fund compares its performance to that of a customized weighted index (the “LifePath Index 2020 Fund Custom Benchmark”), comprised of the indexes indicated below, which reflects the investment advisor’s changes to the benchmark’s weightings over time. The investment advisor adjusts the weightings of these indexes periodically based upon its evaluation and adjustment of the LifePath Index Fund’s asset allocation strategy. The weightings are presented annually but they are adjusted quarterly.

Commencement of operations.

LifePath Index Fund’s custom benchmark consists of the following:


Period	Barclays U.S. Aggregate Bond Index			Barclays U.S. Treasury Inflation Protected Securities (TIPS) Index (Series L)			FTSE EPRA/NAREIT Developed Real Estate Index			MSCI ACWI ex-USA IMI Index			Russell 1000^® Index			Russell 2000^® Index
7/01/11 to 6/30/12		37.9	%		6.1	%		N/A			17.3	%		35.0	%		3.7	%
7/01/12 to 6/30/13		39.9			6.4			3.3	%		16.1			30.7			3.6
7/01/13 to 6/30/14		41.9			6.8			2.9			15.8			28.7			3.9
7/01/14 to 6/30/15		41.1			6.7			3.2			16.4			29.0			3.5

See “About Fund Performance” on page 14 for descriptions of the indexes.

Performance Summary for the Period Ended June 30, 2015


	6-Month			Average Annual Total Returns
	Total Returns			1 Year			Since Inception³
Institutional		1.43	%		2.12	%		6.32	%
Investor A		1.32			1.81			6.03
Class K		1.46			2.18			6.35
LifePath Index 2020 Fund Custom Benchmark		1.41			2.26			6.46
Barclays U.S. Aggregate Bond Index		(0.10	)		1.86			3.07
Barclays U.S. TIPS Index (Series L)		0.34			(1.73	)		2.36
FTSE EPRA/NAREIT Developed Real Estate Index		(3.20	)		(0.36	)		6.06
MSCI ACWI ex-USA IMI Index		4.59			(4.97	)		2.60
Russell 1000^® Index		1.71			7.37			13.44
Russell 2000^® Index		4.75			6.49			11.58

The LifePath Index Fund commenced operations on May 31, 2011.

Past performance is not indicative of future results.



6	BLACKROCK FUNDS III	JUNE 30, 2015


				BlackRock LifePath Index 2025 Fund

Investment Objective

BlackRock LifePath^® Index 2025 Fund’s (“LifePath Index 2025 Fund” or the “LifePath Index Fund”) investment objective is to seek to provide for retirement outcomes based on quantitatively measured risk. In pursuit of this objective, the LifePath Index Fund will be broadly diversified across global asset classes, with asset allocations becoming more conservative over time.

Effective March 31, 2015, the LifePath^® Index 2025 Portfolio changed its name to the BlackRock LifePath^® Index 2025 Fund.

Total Return Based on a $10,000 Investment

LOGO

The LifePath Index Fund compares its performance to that of a customized weighted index (the “LifePath Index 2025 Fund Custom Benchmark”), comprised of the indexes indicated below, which reflects the investment advisor’s changes to the benchmark’s weightings over time. The investment advisor adjusts the weightings of these indexes periodically based upon its evaluation and adjustment of the LifePath Index Fund’s asset allocation strategy. The weightings are presented annually but they are adjusted quarterly.

Commencement of operations.

LifePath Index Fund’s custom benchmark consists of the following:


Period	Barclays U.S. Aggregate Bond Index			Barclays U.S. Treasury Inflation Protected Securities (TIPS) Index (Series L)			FTSE EPRA/NAREIT Developed Real Estate Index			MSCI ACWI ex-USA IMI Index			Russell 1000^® Index			Russell 2000^® Index
7/01/11 to 6/30/12		30.9	%		4.8	%		N/A			20.3	%		40.5	%		3.5	%
7/01/12 to 6/30/13		32.9			5.1			4.8	%		18.4			35.6			3.2
7/01/13 to 6/30/14		34.8			5.4			4.7			18.2			33.5			3.4
7/01/14 to 6/30/15		32.6			5.1			5.4			19.4			34.4			3.1

See “About Fund Performance” on page 14 for descriptions of the indexes.

Performance Summary for the Period Ended June 30, 2015


	6-Month			Average Annual Total Returns
	Total Returns			1 Year			Since Inception³
Institutional		1.62	%		2.22	%		6.77	%
Investor A		1.50			1.99			6.52
Class K		1.56			2.27			6.80
LifePath Index 2025 Fund Custom Benchmark		1.56			2.34			6.95
Barclays U.S. Aggregate Bond Index		(0.10	)		1.86			3.07
Barclays U.S. TIPS Index (Series L)		0.34			(1.73	)		2.36
FTSE EPRA/NAREIT Developed Real Estate Index		(3.20	)		(0.36	)		6.06
MSCI ACWI ex-USA IMI Index		4.59			(4.97	)		2.60
Russell 1000^® Index		1.71			7.37			13.44
Russell 2000^® Index		4.75			6.49			11.58

The LifePath Index Fund commenced operations on May 31, 2011.

Past performance is not indicative of future results.



BLACKROCK FUNDS III	JUNE 30, 2015	7


		BlackRock LifePath Index 2030 Fund

Investment Objective

BlackRock LifePath^® Index 2030 Fund’s (“LifePath Index 2030 Fund” or the “LifePath Index Fund”) investment objective is to seek to provide for retirement outcomes based on quantitatively measured risk. In pursuit of this objective, the LifePath Index Fund will be broadly diversified across global asset classes, with asset allocations becoming more conservative over time.

Effective March 31, 2015, the LifePath^® Index 2030 Portfolio changed its name to the BlackRock LifePath^® Index 2030 Fund.

Total Return Based on a $10,000 Investment

LOGO

The LifePath Index Fund compares its performance to that of a customized weighted index (the “LifePath Index 2030 Fund Custom Benchmark”), comprised of the indexes indicated below, which reflects the investment advisor’s changes to the benchmark’s weightings over time. The investment advisor adjusts the weightings of these indexes periodically based upon its evaluation and adjustment of the LifePath Index Fund’s asset allocation strategy. The weightings are presented annually but they are adjusted quarterly.

Commencement of operations.

LifePath Index Fund’s custom benchmark consists of the following:


Period	Barclays U.S. Aggregate Bond Index			Barclays U.S. Treasury Inflation Protected Securities (TIPS) Index (Series L)			FTSE EPRA/NAREIT Developed Real Estate Index			MSCI ACWI ex-USA IMI Index			Russell 1000^® Index			Russell 2000^® Index
7/01/11 to 6/30/12		24.7	%		3.6	%		N/A			22.9	%		45.4	%		3.4	%
7/01/12 to 6/30/13		26.6			4.0			6.2	%		20.4			39.9			2.9
7/01/13 to 6/30/14		28.6			4.2			6.2			20.3			37.7			3.0
7/01/14 to 6/30/15		24.6			3.7			7.5			22.1			39.5			2.7

See “About Fund Performance” on page 14 for descriptions of the indexes.

Performance Summary for the Period Ended June 30, 2015


	6-Month			Average Annual Total Returns
	Total Returns			1 Year			Since Inception³
Institutional		1.73	%		2.33	%		7.20	%
Investor A		1.61			2.01			6.93
Class K		1.75			2.39			7.22
LifePath Index 2030 Fund Custom Benchmark		1.70			2.42			7.36
Barclays U.S. Aggregate Bond Index		(0.10	)		1.86			3.07
Barclays U.S. TIPS Index (Series L)		0.34			(1.73	)		2.36
FTSE EPRA/NAREIT Developed Real Estate Index		(3.20	)		(0.36	)		6.06
MSCI ACWI ex-USA IMI Index		4.59			(4.97	)		2.60
Russell 1000^® Index		1.71			7.37			13.44
Russell 2000^® Index		4.75			6.49			11.58

The LifePath Index Fund commenced operations on May 31, 2011.

Past performance is not indicative of future results.



8	BLACKROCK FUNDS III	JUNE 30, 2015


				BlackRock LifePath Index 2035 Fund

Investment Objective

BlackRock LifePath^® Index 2035 Fund’s (“LifePath Index 2035 Fund” or the “LifePath Index Fund”) investment objective is to seek to provide for retirement outcomes based on quantitatively measured risk. In pursuit of this objective, the LifePath Index Fund will be broadly diversified across global asset classes, with asset allocations becoming more conservative over time.

Effective March 31, 2015, the LifePath^® Index 2035 Portfolio changed its name to the BlackRock LifePath^® Index 2035 Fund.

Total Return Based on a $10,000 Investment

LOGO

The LifePath Index Fund compares its performance to that of a customized weighted index (the “LifePath Index 2035 Fund Custom Benchmark”), comprised of the indexes indicated below, which reflects the investment advisor’s changes to the benchmark’s weightings over time. The investment advisor adjusts the weightings of these indexes periodically based upon its evaluation and adjustment of the LifePath Index Fund’s asset allocation strategy. The weightings are presented annually but they are adjusted quarterly.

Commencement of operations.

LifePath Index Fund’s custom benchmark consists of the following:


Period	Barclays U.S. Aggregate Bond Index			Barclays U.S. Treasury Inflation Protected Securities (TIPS) Index (Series L)			FTSE EPRA/NAREIT Developed Real Estate Index			MSCI ACWI ex-USA IMI Index			Russell 1000^® Index			Russell 2000^® Index
7/01/11 to 6/30/12		19.1	%		2.5	%		N/A			25.3	%		49.8	%		3.3	%
7/01/12 to 6/30/13		21.1			2.8			7.4	%		22.2			43.8			2.7
7/01/13 to 6/30/14		23.1			3.0			7.6			22.2			41.4			2.7
7/01/14 to 6/30/15		17.3			2.3			9.3			24.6			44.1			2.4

See “About Fund Performance” on page 14 for descriptions of the indexes.

Performance Summary for the Period Ended June 30, 2015


	6-Month			Average Annual Total Returns
	Total Returns			1 Year			Since Inception³
Institutional		1.97	%		2.39	%		7.54	%
Investor A		1.77			2.08			7.24
Class K		1.91			2.44			7.55
LifePath Index 2035 Fund Custom Benchmark		1.82			2.48			7.71
Barclays U.S. Aggregate Bond Index		(0.10	)		1.86			3.07
Barclays U.S. TIPS Index (Series L)		0.34			(1.73	)		2.36
FTSE EPRA/NAREIT Developed Real Estate Index		(3.20	)		(0.36	)		6.06
MSCI ACWI ex-USA IMI Index		4.59			(4.97	)		2.60
Russell 1000^® Index		1.71			7.37			13.44
Russell 2000^® Index		4.75			6.49			11.58

The LifePath Index Fund commenced operations on May 31, 2011.

Past performance is not indicative of future results.



BLACKROCK FUNDS III	JUNE 30, 2015	9


		BlackRock LifePath Index 2040 Fund

Investment Objective

BlackRock LifePath^® Index 2040 Fund’s (“LifePath Index 2040 Fund” or the “LifePath Index Fund”) investment objective is to seek to provide for retirement outcomes based on quantitatively measured risk. In pursuit of this objective, the LifePath Index Fund will be broadly diversified across global asset classes, with asset allocations becoming more conservative over time.

Effective March 31, 2015, the LifePath^® Index 2040 Portfolio changed its name to the BlackRock LifePath^® Index 2040 Fund.

Total Return Based on a $10,000 Investment

LOGO

The LifePath Index Fund compares its performance to that of a customized weighted index (the “LifePath Index 2040 Fund Custom Benchmark”), comprised of the indexes indicated below, which reflects the investment advisor’s changes to the benchmark’s weightings over time. The investment advisor adjusts the weightings of these indexes periodically based upon its evaluation and adjustment of the LifePath Index Fund’s asset allocation strategy. The weightings are presented annually but they are adjusted quarterly.

Commencement of operations.

LifePath Index Fund’s custom benchmark consists of the following:


Period	Barclays U.S. Aggregate Bond Index			Barclays U.S. Treasury Inflation Protected Securities (TIPS) Index (Series L)			FTSE EPRA/NAREIT Developed Real Estate Index			MSCI ACWI ex-USA IMI Index			Russell 1000^® Index			Russell 2000^® Index
7/01/11 to 6/30/12		14.1	%		1.4	%		N/A			27.4	%		53.8	%		3.3	%
7/01/12 to 6/30/13		16.1			1.6			8.6	%		23.9			47.4			2.4
7/01/13 to 6/30/14		18.2			1.9			8.8			23.9			44.8			2.4
7/01/14 to 6/30/15		10.9			1.2			11.1			26.8			47.8			2.2

See “About Fund Performance” on page 14 for descriptions of the indexes.

Performance Summary for the Period Ended June 30, 2015


	6-Month			Average Annual Total Returns
	Total Returns			1 Year			Since Inception³
Institutional		2.00	%		2.44	%		7.87	%
Investor A		1.88			2.21			7.58
Class K		2.11			2.50			7.90
LifePath Index 2040 Fund Custom Benchmark		1.92			2.54			8.04
Barclays U.S. Aggregate Bond Index		(0.10	)		1.86			3.07
Barclays U.S. TIPS Index (Series L)		0.34			(1.73	)		2.36
FTSE EPRA/NAREIT Developed Real Estate Index		(3.20	)		(0.36	)		6.06
MSCI ACWI ex-USA IMI Index		4.59			(4.97	)		2.60
Russell 1000^® Index		1.71			7.37			13.44
Russell 2000^® Index		4.75			6.49			11.58

The LifePath Index Fund commenced operations on May 31, 2011.

Past performance is not indicative of future results.



10	BLACKROCK FUNDS III	JUNE 30, 2015


				BlackRock LifePath Index 2045 Fund

Investment Objective

BlackRock LifePath^® Index 2045 Fund’s (“LifePath Index 2045 Fund” or the “LifePath Index Fund”) investment objective is to seek to provide for retirement outcomes based on quantitatively measured risk. In pursuit of this objective, the LifePath Index Fund will be broadly diversified across global asset classes, with asset allocations becoming more conservative over time.

Effective March 31, 2015, the LifePath^® Index 2045 Portfolio changed its name to the BlackRock LifePath^® Index 2045 Fund.

Total Return Based on a $10,000 Investment

LOGO

The LifePath Index Fund compares its performance to that of a customized weighted index (the “LifePath Index 2045 Fund Custom Benchmark”), comprised of the indexes indicated below, which reflects the investment advisor’s changes to the benchmark’s weightings over time. The investment advisor adjusts the weightings of these indexes periodically based upon its evaluation and adjustment of the LifePath Index Fund’s asset allocation strategy. The weightings are presented annually but they are adjusted quarterly.

Commencement of operations.

LifePath Index Fund’s custom benchmark consists of the following:


Period	Barclays U.S. Aggregate Bond Index			Barclays U.S. Treasury Inflation Protected Securities (TIPS) Index (Series L)			FTSE EPRA/NAREIT Developed Real Estate Index			MSCI ACWI ex-USA IMI Index			Russell 1000^® Index			Russell 2000^® Index
7/01/11 to 6/30/12		9.8	%		N/A			N/A			29.5	%		57.5	%		3.2	%
7/01/12 to 6/30/13		12.1			N/A			9.6	%		25.4			50.7			2.2
7/01/13 to 6/30/14		14.5			N/A			9.9			25.5			48.0			2.1
7/01/14 to 6/30/15		7.3			0.1	%		12.4			28.2			49.9			2.1

See “About Fund Performance” on page 14 for descriptions of the indexes.

Performance Summary for the Period Ended June 30, 2015


	6-Month			Average Annual Total Returns
	Total Returns			1 Year			Since Inception³
Institutional		2.06	%		2.50	%		8.08	%
Investor A		2.03			2.35			7.83
Class K		2.09			2.63			8.14
LifePath Index 2045 Fund Custom Benchmark		1.96			2.61			8.34
Barclays U.S. Aggregate Bond Index		(0.10	)		1.86			3.07
Barclays U.S. TIPS Index (Series L)		0.34			(1.73	)		2.36
FTSE EPRA/NAREIT Developed Real Estate Index		(3.20	)		(0.36	)		6.06
MSCI ACWI ex-USA IMI Index		4.59			(4.97	)		2.60
Russell 1000^® Index		1.71			7.37			13.44
Russell 2000^® Index		4.75			6.49			11.58

The LifePath Index Fund commenced operations on May 31, 2011.

Past performance is not indicative of future results.



BLACKROCK FUNDS III	JUNE 30, 2015	11


		BlackRock LifePath Index 2050 Fund

Investment Objective

BlackRock LifePath^® Index 2050 Fund’s (“LifePath Index 2050 Fund” or the “LifePath Index Fund”) investment objective is to seek to provide for retirement outcomes based on quantitatively measured risk. In pursuit of this objective, the LifePath Index Fund will be broadly diversified across global asset classes, with asset allocations becoming more conservative over time.

Effective March 31, 2015, the LifePath^® Index 2050 Portfolio changed its name to the BlackRock LifePath^® Index 2050 Fund.

Total Return Based on a $10,000 Investment

LOGO

The LifePath Index Fund compares its performance to that of a customized weighted index (the “LifePath Index 2050 Fund Custom Benchmark”), comprised of the indexes indicated below, which reflects the investment advisor’s changes to the benchmark’s weightings over time. The investment advisor adjusts the weightings of these indexes periodically based upon its evaluation and adjustment of the LifePath Index Fund’s asset allocation strategy. The weightings are presented annually but they are adjusted quarterly.

Commencement of operations.

LifePath Index Fund’s custom benchmark consists of the following:


Period	Barclays U.S. Aggregate Bond Index			FTSE EPRA/NAREIT Developed Real Estate Index			MSCI ACWI ex-USA IMI Index			Russell 1000^® Index			Russell 2000^® Index
7/01/11 to 6/30/12		4.4	%		N/A			31.5	%		60.8	%		3.3	%
7/01/12 to 6/30/13		6.8			10.6	%		26.9			53.7			2.0
7/01/13 to 6/30/14		9.2			11.0			27.0			51.0			1.8
7/01/14 to 6/30/15		4.8			13.0			29.0			51.2			2.1

See “About Fund Performance” on page 14 for descriptions of the indexes.

Performance Summary for the Period Ended June 30, 2015


	6-Month			Average Annual Total Returns
	Total Returns			1 Year			Since Inception³
Institutional		2.12	%		2.57	%		8.37	%
Investor A		2.00			2.35			8.09
Class K		2.14			2.62			8.40
LifePath Index 2050 Fund Custom Benchmark		1.97			2.61			8.59
Barclays U.S. Aggregate Bond Index		(0.10	)		1.86			3.07
FTSE EPRA/NAREIT Developed Real Estate Index		(3.20	)		(0.36	)		6.06
MSCI ACWI ex-USA IMI Index		4.59			(4.97	)		2.60
Russell 1000^® Index		1.71			7.37			13.44
Russell 2000^® Index		4.75			6.49			11.58

The LifePath Index Fund commenced operations on May 31, 2011.

Past performance is not indicative of future results.



12	BLACKROCK FUNDS III	JUNE 30, 2015


				BlackRock LifePath Index 2055 Fund

Investment Objective

BlackRock LifePath^® Index 2055 Fund’s (“LifePath Index 2055 Fund” or the “LifePath Index Fund”) investment objective is to seek to provide for retirement outcomes based on quantitatively measured risk. In pursuit of this objective, the LifePath Index Fund will be broadly diversified across global asset classes, with asset allocations becoming more conservative over time.

Effective March 31, 2015, the LifePath^® Index 2055 Portfolio changed its name to the BlackRock LifePath^® Index 2055 Fund.

Total Return Based on a $10,000 Investment

LOGO

The LifePath Index Fund compares its performance to that of a customized weighted index (the “LifePath Index 2055 Fund Custom Benchmark”), comprised of the indexes indicated below, which reflects the investment advisor’s changes to the benchmark’s weightings over time. The investment advisor adjusts the weightings of these indexes periodically based upon its evaluation and adjustment of the LifePath Index Fund’s asset allocation strategy. The weightings are presented annually but they are adjusted quarterly.

Commencement of operations.

LifePath Index Fund’s custom benchmark consists of the following:


Period	Barclays U.S. Aggregate Bond Index			FTSE EPRA/NAREIT Developed Real Estate Index			MSCI ACWI ex-USA IMI Index			Russell 1000^® Index			Russell 2000^® Index
7/01/11 to 6/30/12		1.0	%		N/A			33.9	%		58.7	%		6.4	%
7/01/12 to 6/30/13		1.6			11.9	%		28.3			56.2			2.0
7/01/13 to 6/30/14		4.0			12.5			28.5			53.2			1.8
7/01/14 to 6/30/15		2.7			13.5			29.6			52.1			2.0

See “About Fund Performance” on page 14 for descriptions of the indexes.

Performance Summary for the Period Ended June 30, 2015


	6-Month			Average Annual Total Returns
	Total Returns			1 Year			Since Inception³
Institutional		2.13	%		2.54	%		8.63	%
Investor A		2.02			2.31			8.35
Class K		2.16			2.59			8.67
LifePath Index 2055 Fund Custom Benchmark		1.97			2.58			8.80
Barclays U.S. Aggregate Bond Index		(0.10	)		1.86			3.07
FTSE EPRA/NAREIT Developed Real Estate Index		(3.20	)		(0.36	)		6.06
MSCI ACWI ex-USA IMI Index		4.59			(4.97	)		2.60
Russell 1000^® Index		1.71			7.37			13.44
Russell 2000^® Index		4.75			6.49			11.58

The LifePath Index Fund commenced operations on May 31, 2011.

Past performance is not indicative of future results.



BLACKROCK FUNDS III	JUNE 30, 2015	13


About Fund Performance

•

Institutional 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 not subject to any sales charge and bear no ongoing distribution fee. These shares are subject to an ongoing service fee of 0.25% per year.

•

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.

The LifePath Index Funds’ administrator waived and/or reimbursed a portion of each LifePath Index Fund’s expenses. Without such waiver and/or reimbursement, each LifePath Index Fund’s performance would have been lower.

The LifePath Index Funds’ custom benchmarks are hypothetical representations of the performance of the respective LifePath Index Fund’s asset classes according to their weightings as of the most recent quarter- end. The weightings of the various indexes that are included in the LifePath Index Funds’ custom benchmarks are adjusted quarterly to reflect the LifePath Index Fund’s changing asset allocations over time. As of June 30, 2015, the following indexes are used to calculate the LifePath Index Funds’ custom benchmarks: Barclays U.S. Aggregate Bond Index, Barclays U.S. TIPS Index (Series L), FTSE EPRA/NAREIT Developed Real Estate Index, MSCI ACWI ex-U.S. IMI Index, Russell 1000^® Index and Russell 2000^® Index.

The Barclays U.S. Aggregate Bond Index is a widely recognized unmanaged market-weighted index comprised of investment-grade corporate bonds rated BBB or better, mortgages and U.S. Treasury and U.S. Government agency issues with at least one year to maturity. The Barclays U.S. TIPS Index (Series L) is a market value-weighted index that tracks inflation-protected securities issued by the U.S. Treasury. The FTSE EPRA/NAREIT Developed Real Estate Index a global market capitalization weighted index composed of listed real estate securities from developed market countries in North America, Europe, and Asia. The MSCI ACWI ex-U.S. IMI Index is a free float-adjusted market capitalization weighted index that measures the equity market performance of the developed (excluding the U.S.) and emerging investable market universe. The Russell 1000^® Index is an index that measures the performance of the large cap segment of the U.S. equity universe. It is a subset of the Russell 3000^® Index and includes approximately 1,000 of the largest securities based on a combination of their market capitalization and current index membership. The Index represents approximately 92% of the total market capitalization of the Russell 3000^® Index. The Russell 2000^® Index is an unmanaged index that is a subset of the Russell 3000^® Index representing approximately 10% of the total market capitalization of that Index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.



14	BLACKROCK FUNDS III	JUNE 30, 2015


Disclosure of Expenses

Shareholders of each LifePath Index Fund may incur the following charges: (a) transactional expenses, such as sales charges; and (b) operating expenses, including administration fees, service and distribution fees, including 12b-1 fees, and other fund expenses. The expense examples shown below (which are based on a hypothetical investment of $1,000 invested on January 1, 2015 and held through June 30, 2015) are intended to assist shareholders both in calculating expenses based on an investment in a LifePath Index Fund and in comparing these expenses with similar costs of investing in other mutual funds.

The expense examples provide information about actual account values and actual expenses. 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 LifePath Index Fund and their share class under the heading entitled “Expenses Paid During the Period.”

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

Expense Examples


	Actual						Hypothetical²
	Beginning Account Value January 1, 2015		Ending Account Value June 30, 2015		Expenses Paid During the Period¹		Beginning Account Value January 1, 2015		Ending Account Value June 30, 2015		Expenses Paid During the Period¹		Annualized Expense Ratio
LifePath Index Retirement Fund
Institutional		$1,000.00		$1,011.80		$0.75		$1,000.00		$1,024.05		$0.75		0.15%
Investor A		$1,000.00		$1,010.60		$1.99		$1,000.00		$1,022.81		$2.01		0.40%
Class K		$1,000.00		$1,012.00		$0.50		$1,000.00		$1,024.30		$0.50		0.10%
LifePath Index 2020 Fund
Institutional		$1,000.00		$1,014.30		$0.75		$1,000.00		$1,024.05		$0.75		0.15%
Investor A		$1,000.00		$1,013.20		$2.00		$1,000.00		$1,022.81		$2.01		0.40%
Class K		$1,000.00		$1,014.60		$0.50		$1,000.00		$1,024.30		$0.50		0.10%
LifePath Index 2025 Fund
Institutional		$1,000.00		$1,016.20		$0.75		$1,000.00		$1,024.05		$0.75		0.15%
Investor A		$1,000.00		$1,015.00		$2.00		$1,000.00		$1,022.81		$2.01		0.40%
Class K		$1,000.00		$1,015.60		$0.50		$1,000.00		$1,024.30		$0.50		0.10%
LifePath Index 2030 Fund
Institutional		$1,000.00		$1,017.30		$0.75		$1,000.00		$1,024.05		$0.75		0.15%
Investor A		$1,000.00		$1,016.10		$2.00		$1,000.00		$1,022.81		$2.01		0.40%
Class K		$1,000.00		$1,017.50		$0.50		$1,000.00		$1,024.30		$0.50		0.10%
LifePath Index 2035 Fund
Institutional		$1,000.00		$1,019.70		$0.70		$1,000.00		$1,024.10		$0.70		0.14%
Investor A		$1,000.00		$1,017.70		$1.95		$1,000.00		$1,022.86		$1.96		0.39%
Class K		$1,000.00		$1,019.10		$0.45		$1,000.00		$1,024.35		$0.45		0.09%
LifePath Index 2040 Fund
Institutional		$1,000.00		$1,020.00		$0.70		$1,000.00		$1,024.10		$0.70		0.14%
Investor A		$1,000.00		$1,018.80		$1.95		$1,000.00		$1,022.86		$1.96		0.39%
Class K		$1,000.00		$1,021.10		$0.45		$1,000.00		$1,024.35		$0.45		0.09%
LifePath Index 2045 Fund
Institutional		$1,000.00		$1,020.60		$0.70		$1,000.00		$1,024.10		$0.70		0.14%
Investor A		$1,000.00		$1,020.30		$1.95		$1,000.00		$1,022.86		$1.96		0.39%
Class K		$1,000.00		$1,020.90		$0.45		$1,000.00		$1,024.35		$0.45		0.09%
LifePath Index 2050 Fund
Institutional		$1,000.00		$1,021.20		$0.70		$1,000.00		$1,024.10		$0.70		0.14%
Investor A		$1,000.00		$1,020.00		$1.95		$1,000.00		$1,022.86		$1.96		0.39%
Class K		$1,000.00		$1,021.40		$0.45		$1,000.00		$1,024.35		$0.45		0.09%
LifePath Index 2055 Fund
Institutional		$1,000.00		$1,021.30		$0.65		$1,000.00		$1,024.15		$0.65		0.13%
Investor A		$1,000.00		$1,020.20		$1.90		$1,000.00		$1,022.91		$1.91		0.38%
Class K		$1,000.00		$1,021.60		$0.40		$1,000.00		$1,024.40		$0.40		0.08%

For each class of the LifePath Index Fund, expenses are equal to the annualized net expense ratio for the class, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period shown). Because each LifePath Index Fund invests significantly in a LifePath Index Master Portfolio, the expense examples reflect the net expenses of both the LifePath Index Fund and the LifePath Index Master Portfolio in which it invests.

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



BLACKROCK FUNDS III	JUNE 30, 2015	15


Statements of Assets and Liabilities


June 30, 2015 (Unaudited)	BlackRock LifePath Index Retirement Fund			BlackRock LifePath Index 2020 Fund		BlackRock LifePath Index 2025 Fund		BlackRock LifePath Index 2030 Fund		BlackRock LifePath Index 2035 Fund

Assets
Investments at value — from the applicable LifePath Index Master Portfolio¹	$	474,077,728		$	1,029,690,921	$	628,800,618	$	991,857,382	$	488,399,622
Receivables:
Capital shares sold		3,103,015			4,857,537		2,104,795		4,296,543		1,482,064
From the advisor		26,209			37,437		29,545		36,430		27,728
Prepaid expenses		37,958			44,168		35,219		44,508		34,284

Total assets		477,244,910			1,034,630,063		630,970,177		996,234,863		489,943,698


Liabilities
Payables:
Contributions to the LifePath Index Master Portfolio		2,718,260			4,200,261		1,347,127		3,420,000		1,355,438
Capital shares redeemed		384,755			657,276		757,668		876,543		126,626
Income dividends		81,681			59,931		9,011		67,020		7,147
Capital gains distributions		38,807			19,554		1,571		6,228		421
Professional fees		17,650			15,007		16,955		15,251		17,448
Service fees		13,890			26,538		21,141		29,651		19,793
Printing fees		6,805			9,268		5,503		8,213		4,816
Registration fees		1,240			3,894		4,405		5,110		3,726
Trustees’ fees		160			306		183		293		163
Transfer agent fees		—			11,094		6,349		8,962		2,297
Other accrued expenses payable		5,316			7,160		7,805		7,875		7,751

Total liabilities		3,268,564			5,010,289		2,177,718		4,445,146		1,545,626

Net Assets	$	473,976,346		$	1,029,619,774	$	628,792,459	$	991,789,717	$	488,398,072


Net Assets Consist of
Paid-in capital	$	443,316,133		$	955,682,854	$	589,819,541	$	912,322,583	$	453,212,292
Undistributed (distributions in excess of) net investment income		(154,473	)		172,366		566,868		834,647		708,261
Accumulated net realized gain (loss) allocated from the LifePath Index Master Portfolio		746,117			2,174,658		1,574,190		2,428,000		1,561,714
Net unrealized appreciation (depreciation) allocated from the LifePath Index Master Portfolio		30,068,569			71,589,896		36,831,860		76,204,487		32,915,805

Net Assets	$	473,976,346		$	1,029,619,774	$	628,792,459	$	991,789,717	$	488,398,072


Net Asset Value
Institutional:
Net assets	$	68,267,793		$	85,690,922	$	64,716,447	$	82,241,567	$	46,312,922

Shares outstanding²		6,012,801			7,375,030		5,474,719		6,881,160		3,827,893

Net asset value	$	11.35		$	11.62	$	11.82	$	11.95	$	12.10

Investor A:
Net assets	$	69,359,849		$	130,174,587	$	103,742,433	$	143,037,000	$	95,629,907

Shares outstanding²		6,113,338			11,220,534		8,784,530		11,974,874		7,920,133

Net asset value	$	11.35		$	11.60	$	11.81	$	11.94	$	12.07

Class K:
Net assets	$	336,348,704		$	813,754,265	$	460,333,579	$	766,511,150	$	346,455,243

Shares outstanding²		29,637,471			70,045,580		38,929,004		64,195,765		28,659,516

Net asset value	$	11.35		$	11.62	$	11.82	$	11.94	$	12.09

¹ Investments at cost — from the applicable LifePath Index Master Portfolio	$	444,009,159		$	958,101,025	$	591,968,758	$	915,652,895	$	455,483,817
² No par value, unlimited number of shares authorized.


Statements of Assets and Liabilities


June 30, 2015 (Unaudited)	BlackRock LifePath Index 2040 Fund		BlackRock LifePath Index 2045 Fund		BlackRock LifePath Index 2050 Fund		BlackRock LifePath Index 2055 Fund

Assets
Investments at value — from the applicable LifePath Index Master Portfolio¹	$	671,960,937	$	280,413,030	$	297,373,714	$	84,350,845
Receivables:
Capital shares sold		3,268,490		860,134		1,847,163		489,063
From the advisor		33,831		26,933		31,527		29,153
Prepaid expenses		44,787		33,090		38,967		32,288

Total assets		675,308,045		281,333,187		299,291,371		84,901,349


Liabilities
Payables:
Contributions to the LifePath Index Master Portfolio		2,961,697		766,610		1,698,653		464,841
Capital shares redeemed		306,793		93,524		148,510		24,222
Income dividends		53,269		4,884		6,696		764
Professional fees		16,962		18,333		18,084		19,313
Service fees		16,901		8,692		6,156		2,451
Printing fees		5,971		3,892		3,719		3,605
Registration fees		3,912		2,329		2,575		735
Transfer agent fees		3,813		—		—		—
Capital gains distributions		1,800		303		264		36
Trustees’ fees		168		—		29		2
Other accrued expenses payable		5,911		5,149		3,195		1,714

Total liabilities		3,377,197		903,716		1,887,881		517,683

Net Assets	$	671,930,848	$	280,429,471	$	297,403,490	$	84,383,666


Net Assets Consist of
Paid-in capital	$	615,986,648	$	260,785,106	$	277,446,193	$	79,718,477
Undistributed (distributions in excess of) net investment income		965,091		572,537		638,816		220,348
Accumulated net realized gain (loss) allocated from the LifePath Index Master Portfolio		2,270,687		1,171,939		1,392,265		(415,434	)
Net unrealized appreciation (depreciation) allocated from the LifePath Index Master Portfolio		52,708,422		17,899,889		17,926,216		4,860,275

Net Assets	$	671,930,848	$	280,429,471	$	297,403,490	$	84,383,666


Net Asset Value
Institutional:
Net assets	$	60,017,230	$	39,020,207	$	35,888,479	$	15,442,686

Shares outstanding²		4,906,921		3,150,652		2,859,116		1,211,074

Net asset value	$	12.23	$	12.38	$	12.55	$	12.75

Investor A:
Net assets	$	82,010,710	$	42,630,147	$	30,445,011	$	12,267,558

Shares outstanding²		6,714,742		3,447,472		2,429,559		963,451

Net asset value	$	12.21	$	12.37	$	12.53	$	12.73

Class K:
Net assets	$	529,902,908	$	198,779,117	$	231,070,000	$	56,673,422

Shares outstanding²		43,331,042		16,040,288		18,409,436		4,444,514

Net asset value	$	12.23	$	12.39	$	12.55	$	12.75

¹ Investments at cost — from the applicable LifePath Index Master Portfolio	$	619,252,515	$	262,513,141	$	279,447,498	$	79,490,570
² No par value, unlimited number of shares authorized.


Statements of Operations


Six Months Ended June 30, 2015 (Unaudited)	BlackRock LifePath Index Retirement Fund			BlackRock LifePath Index 2020 Fund			BlackRock LifePath Index 2025 Fund			BlackRock LifePath Index 2030 Fund			BlackRock LifePath Index 2035 Fund

Investment Income
Net investment income allocated from the applicable LifePath Index Master Portfolio:
Dividends — affiliated	$	2,127,759		$	6,331,305		$	4,730,207		$	8,856,965		$	5,041,636
Interest — affiliated		2,282,492			3,812,930			1,772,539			1,991,274			616,386
Securities lending — affiliated — net		2,769			7,448			12,455			5,779			4,012
Income — affiliated		—			1,943			1,247			—			—
Expenses		(281,060	)		(565,770	)		(338,362	)		(518,176	)		(260,894	)
Fees waived		52,572			79,238			50,637			60,480			44,889

Total income		4,184,532			9,667,094			6,228,723			10,396,322			5,446,029


Fund Expenses
Administration		69,771			148,591			89,687			140,861			70,356
Registration		30,323			38,790			30,630			38,635			28,522
Service — Investor A		82,235			156,736			123,555			173,871			114,152
Transfer agent — Institutional		18,335			21,833			14,665			19,761			10,122
Transfer agent — Investor A		13,711			28,781			22,225			31,359			20,118
Transfer agent — Class K		15,291			15,041			8,018			15,556			8,501
Professional		16,655			16,566			16,293			16,474			16,293
Printing		7,320			10,848			6,691			9,943			5,697
Independent Trustees		153			270			163			270			144
Miscellaneous		4,034			4,307			4,034			4,034			4,034
Recoupment of past waived fees — class specific		4,558			6,783			7,008			7,728			6,923

Total expenses		262,386			448,546			322,969			458,492			284,862
Less administration fees waived		(70,311	)		(149,223	)		(90,268	)		(141,486	)		(70,909	)
Less transfer agent fees waived and/or reimbursed — Institutional		(1,233	)		(1,210	)		(305	)		(613	)		(302	)
Less transfer agent fees waived and/or reimbursed — Investor A		(1,696	)		(2,564	)		(2,102	)		(2,323	)		(2,037	)
Less transfer agent fees waived and/or reimbursed — Class K		(15,291	)		(15,041	)		(8,017	)		(15,555	)		(8,500	)
Less fees reimbursed by the administrator		(57,621	)		(69,823	)		(56,904	)		(68,406	)		(53,813	)

Total expenses after fees waived and/or reimbursed		116,234			210,685			165,373			230,109			149,301

Net investment income		4,068,298			9,456,409			6,063,350			10,166,213			5,296,728


Realized and Unrealized Gain (Loss) Allocated from the LifePath Index Master Portfolio
Net realized gain from investments, financial futures contracts and foreign currency transactions		1,926,420			4,756,807			3,031,681			5,286,542			2,893,039

Net change in unrealized appreciation (depreciation) on investments, financial futures contracts and foreign currency translations		(719,835	)		(1,268,847	)		(492,796	)		(589,171	)		53,207

Net realized and unrealized gain		1,206,585			3,487,960			2,538,885			4,697,371			2,946,246

Net Increase in Net Assets Resulting from Operations	$	5,274,883		$	12,944,369		$	8,602,235		$	14,863,584		$	8,242,974


Statements of Operations


Six Months Ended June 30, 2015 (Unaudited)	BlackRock LifePath Index 2040 Fund			BlackRock LifePath Index 2045 Fund			BlackRock LifePath Index 2050 Fund			BlackRock LifePath Index 2055 Fund

Investment Income
Net investment income allocated from the applicable LifePath Index Master Portfolio:
Dividends — affiliated	$	7,639,278		$	3,366,105		$	3,565,652		$	1,002,225
Interest — affiliated		396,417			73,628			64,232			17,653
Securities lending — affiliated — net		4,761			1,813			8,508			1,310
Income — affiliated		1,430			602			—			—
Expenses		(344,930	)		(152,642	)		(159,110	)		(58,637	)
Fees waived		49,966			36,947			38,272			27,308

Total income		7,746,922			3,326,453			3,517,554			989,859


Fund Expenses
Administration		95,356			40,107			42,074			11,732
Registration		37,110			27,260			30,774			24,875
Service — Investor A		97,723			48,687			34,918			13,373
Transfer agent — Institutional		13,528			7,645			7,410			3,088
Transfer agent — Investor A		17,309			9,162			7,209			2,986
Transfer agent — Class K		15,109			8,722			14,950			7,512
Professional		16,385			16,204			16,204			16,204
Printing		7,142			4,160			4,068			2,804
Independent Trustees		163			28			28			—
Miscellaneous		4,034			4,034			4,034			4,037
Recoupment of past waived fees — class specific		5,116			4,270			2,227			733

Total expenses		308,975			170,279			163,896			87,344
Less administration fees waived		(95,939	)		(40,621	)		(42,576	)		(12,193	)
Less transfer agent fees waived and/or reimbursed — Institutional		(321	)		(307	)		(180	)		(189	)
Less transfer agent fees waived and/or reimbursed — Investor A		(1,004	)		(998	)		(795	)		(414	)
Less transfer agent fees waived and/or reimbursed — Class K		(15,108	)		(8,721	)		(14,949	)		(7,512	)
Less fees reimbursed by administrator		(63,926	)		(50,847	)		(54,281	)		(47,132	)

Total expenses after fees waived and/or reimbursed		132,677			68,785			51,115			19,904

Net investment income		7,614,245			3,257,668			3,466,439			969,955


Realized and Unrealized Gain (Loss) Allocated from the LifePath Index Master Portfolio
Net realized gain from investments, financial futures contracts and foreign currency transactions		4,146,249			1,785,515			1,947,490			526,877

Net change in unrealized appreciation (depreciation) on investments, financial futures contracts and foreign currency translations		(13,483	)		122,782			(41,875	)		(44,106	)

Net realized and unrealized gain		4,132,766			1,908,297			1,905,615			482,771

Net Increase in Net Assets Resulting from Operations	$	11,747,011		$	5,165,965		$	5,372,054		$	1,452,726


Statements of Changes in Net Assets


	BlackRock LifePath Index Retirement Fund						BlackRock LifePath Index 2020 Fund
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014			Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	4,068,298		$	6,754,544		$	9,456,409		$	14,578,806
Net realized gain		1,926,420			5,266,766			4,756,807			9,750,563
Net change in unrealized appreciation (depreciation)		(719,835	)		8,358,774			(1,268,847	)		19,682,605

Net increase in net assets resulting from operations		5,274,883			20,380,084			12,944,369			44,011,974


Distributions to Shareholders From¹
Net investment income:
Institutional		(550,334	)		(1,003,476	)		(720,823	)		(1,290,937	)
Investor A		(447,840	)		(645,501	)		(917,310	)		(1,371,308	)
Class K		(2,692,341	)		(5,189,643	)		(6,827,859	)		(12,046,964	)
Net realized gain:
Institutional		(141,946	)		(831,394	)		(133,501	)		(946,287	)
Investor A		(139,618	)		(642,610	)		(200,278	)		(1,151,106	)
Class K		(698,514	)		(3,851,560	)		(1,266,652	)		(8,329,236	)

Decrease in net assets resulting from distributions to shareholders		(4,670,593	)		(12,164,184	)		(10,066,423	)		(25,135,838	)


Capital Share Transactions
Net increase in net assets derived from capital share transactions		41,885,956			101,799,062			145,669,424			246,310,875


Net Assets
Total increase in net assets		42,490,246			110,014,962			148,547,370			265,187,011
Beginning of period		431,486,100			321,471,138			881,072,404			615,885,393

End of period	$	473,976,346		$	431,486,100		$	1,029,619,774		$	881,072,404

Undistributed (distributions in excess of) net investment income, end of period	$	(154,473	)	$	(532,256	)	$	172,366		$	(818,051	)

¹ Distributions for annual periods determined in accordance with federal income tax regulations.


Statements of Changes in Net Assets


	BlackRock LifePath Index 2025 Fund						BlackRock LifePath Index 2030 Fund
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014			Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	6,063,350		$	7,980,893		$	10,166,213		$	14,132,713
Net realized gain		3,031,681			4,243,950			5,286,542			7,450,237
Net change in unrealized appreciation (depreciation)		(492,796	)		11,493,129			(589,171	)		20,621,536

Net increase in net assets resulting from operations		8,602,235			23,717,972			14,863,584			42,204,486


Distributions to Shareholders From¹
Net investment income:
Institutional		(554,690	)		(813,427	)		(757,321	)		(1,216,088	)
Investor A		(724,984	)		(1,216,103	)		(1,119,470	)		(1,658,504	)
Class K		(3,900,426	)		(5,998,530	)		(6,910,834	)		(11,318,329	)
Net realized gain:
Institutional		(55,486	)		(508,503	)		(41,462	)		(827,120	)
Investor A		(87,728	)		(853,702	)		(71,661	)		(1,251,411	)
Class K		(395,708	)		(3,603,809	)		(385,244	)		(7,287,063	)

Decrease in net assets resulting from distributions to shareholders		(5,719,022	)		(12,994,074	)		(9,285,992	)		(23,558,515	)


Capital Share Transactions
Net increase in net assets derived from capital share transactions		107,770,573			228,806,845			168,145,443			271,075,569


Net Assets
Total increase in net assets		110,653,786			239,530,743			173,723,035			289,721,540
Beginning of period		518,138,673			278,607,930			818,066,682			528,345,142

End of period	$	628,792,459		$	518,138,673		$	991,789,717		$	818,066,682

Undistributed (distributions in excess of) net investment income, end of period	$	566,868		$	(316,382	)	$	834,647		$	(543,941	)

¹ Distributions for annual periods determined in accordance with federal income tax regulations.


Statements of Changes in Net Assets


	BlackRock LifePath Index 2035 Fund						BlackRock LifePath Index 2040 Fund
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014			Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	5,296,728		$	6,623,719		$	7,614,245		$	9,659,334
Net realized gain		2,893,039			2,777,692			4,146,249			4,084,987
Net change in unrealized appreciation (depreciation)		53,207			9,904,332			(13,483	)		14,271,549

Net increase in net assets resulting from operations		8,242,974			19,305,743			11,747,011			28,015,870


Distributions to Shareholders From¹
Net investment income:
Institutional		(436,487	)		(576,033	)		(586,641	)		(851,152	)
Investor A		(756,881	)		(1,172,332	)		(686,703	)		(918,989	)
Class K		(3,221,746	)		(4,885,446	)		(5,135,134	)		(7,898,009	)
Net realized gain:
Institutional		(15,147	)		(326,421	)		(12,167	)		(501,303	)
Investor A		(31,297	)		(731,035	)		(16,419	)		(597,551	)
Class K		(114,029	)		(2,643,917	)		(107,131	)		(4,405,145	)

Decrease in net assets resulting from distributions to shareholders		(4,575,587	)		(10,335,184	)		(6,544,195	)		(15,172,149	)


Capital Share Transactions
Net increase in net assets derived from capital share transactions		74,739,698			193,854,314			120,380,534			206,933,374


Net Assets
Total increase in net assets		78,407,085			202,824,873			125,583,350			219,777,095
Beginning of period		409,990,987			207,166,114			546,347,498			326,570,403

End of period	$	488,398,072		$	409,990,987		$	671,930,848		$	546,347,498

Undistributed (distributions in excess of) net investment income, end of period	$	708,261		$	(173,353	)	$	965,091		$	(240,676	)

¹ Distributions for annual periods determined in accordance with federal income tax regulations.


Statements of Changes in Net Assets


	BlackRock LifePath Index 2045 Fund						BlackRock LifePath Index 2050 Fund
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014			Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	3,257,668		$	3,764,889		$	3,466,439		$	3,822,906
Net realized gain		1,785,515			1,288,242			1,947,490			1,120,653
Net change in unrealized appreciation (depreciation)		122,782			5,861,300			(41,875	)		6,166,502

Net increase in net assets resulting from operations		5,165,965			10,914,431			5,372,054			11,110,061


Distributions to Shareholders From¹
Net investment income:
Institutional		(379,765	)		(414,254	)		(332,224	)		(394,456	)
Investor A		(341,098	)		(497,652	)		(243,377	)		(371,110	)
Class K		(1,904,926	)		(2,855,754	)		(2,206,945	)		(3,060,125	)
Net realized gain:
Institutional		(14,196	)		(196,532	)		(8,295	)		(161,182	)
Investor A		(15,319	)		(250,858	)		(6,860	)		(169,181	)
Class K		(72,367	)		(1,230,202	)		(53,296	)		(1,223,613	)

Decrease in net assets resulting from distributions to shareholders		(2,727,671	)		(5,445,252	)		(2,850,997	)		(5,379,667	)


Capital Share Transactions
Net increase in net assets derived from capital share transactions		51,233,498			116,729,238			62,013,614			123,424,472


Net Assets
Total increase in net assets		53,671,792			122,198,417			64,534,671			129,154,866
Beginning of period		226,757,679			104,559,262			232,868,819			103,713,953

End of period	$	280,429,471		$	226,757,679		$	297,403,490		$	232,868,819

Undistributed (distributions in excess of) net investment income, end of period	$	572,537		$	(59,342	)	$	638,816		$	(45,077	)

¹ Distributions for annual periods determined in accordance with federal income tax regulations.


Statements of Changes in Net Assets


	BlackRock LifePath Index 2055 Fund
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	969,955		$	965,125
Net realized gain		526,877			249,732
Net change in unrealized appreciation (depreciation)		(44,106	)		1,523,881

Net increase in net assets resulting from operations		1,452,726			2,738,738


Distributions to Shareholders From¹
Net investment income:
Institutional		(135,897	)		(107,419	)
Investor A		(90,172	)		(133,343	)
Class K		(518,076	)		(723,754	)
Net realized gain:
Institutional		(4,027	)		(39,649	)
Investor A		(3,124	)		(48,206	)
Class K		(14,805	)		(236,207	)

Decrease in net assets resulting from distributions to shareholders		(766,101	)		(1,288,578	)


Capital Share Transactions
Net increase in net assets derived from capital share transactions		21,838,719			36,470,547


Net Assets
Total increase in net assets		22,525,344			37,920,707
Beginning of period		61,858,322			23,937,615

End of period	$	84,383,666		$	61,858,322

Undistributed (distributions in excess of) net investment income, end of period	$	220,348		$	(5,462	)

¹ Distributions for annual periods determined in accordance with federal income tax regulations.


Financial Highlights		BlackRock LifePath Index Retirement Fund


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	11.33		$	11.05		$	10.49		$	9.77		$	10.00

Net investment income²		0.10			0.21			0.18			0.21			0.16
Net realized and unrealized gain (loss)		0.03			0.42			0.62			0.68			(0.22	)

Net increase (decrease) from investment operations		0.13			0.63			0.80			0.89			(0.06	)

Distributions from:³
Net investment income		(0.09	)		(0.21	)		(0.19	)		(0.15	)		(0.16	)
Net realized gain		(0.02	)		(0.14	)		(0.05	)		(0.02	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.11	)		(0.35	)		(0.24	)		(0.17	)		(0.17	)

Net asset value, end of period	$	11.35		$	11.33		$	11.05		$	10.49		$	9.77


Total Return⁴
Based on net asset value		1.18%	⁵		5.73%			7.68%			9.16%			(0.61)%	⁵


Ratios to Average Net Assets⁶
Total expenses^7,8		0.21%	⁹		0.23%			0.26%			0.38%			6.81%	^9,10

Total expenses after fees waived and/or reimbursed^7,8		0.15%	⁹		0.16%			0.18%			0.16%			0.18%	⁹

Net investment income^7,8		1.73%	⁹		1.82%			1.70%			2.00%			2.84%	⁹


Supplemental Data
Net assets, end of period (000)	$	68,268		$	68,385		$	39,793		$	20,223		$	24

Portfolio turnover rate of the LifePath Index Master Portfolio		9%	¹¹		15%	¹¹		18%	¹¹		1%	¹²		1%	¹²

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁷

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.02%, 0.03%, 0.02%, 0.06% and 3.37% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁸

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated expenses and/or net investment income. Excludes expenses incurred indirectly as a result of the LifePath Index Master Portfolio’s investments in underlying funds as follows:

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,

2011

2014

2013

2012

Investments in underlying funds

0.03%

0.02%

0.04%

⁹

Annualized.

¹⁰

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 6.84%.

¹¹

Includes the LifePath Index Master Portfolio’s purchases and sales of the underlying funds and Large Cap Index Master Portfolio, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio.

¹²

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 15% and 9% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.


Financial Highlights (continued)		BlackRock LifePath Index Retirement Fund


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	11.33		$	11.05		$	10.49		$	9.77		$	10.00

Net investment income²		0.09			0.17			0.16			0.18			0.15
Net realized and unrealized gain (loss)		0.03			0.43			0.62			0.69			(0.23	)

Net increase (decrease) from investment operations		0.12			0.60			0.78			0.87			(0.08	)

Distributions from:³
Net investment income		(0.08	)		(0.18	)		(0.17	)		(0.13	)		(0.14	)
Net realized gain		(0.02	)		(0.14	)		(0.05	)		(0.02	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.10	)		(0.32	)		(0.22	)		(0.15	)		(0.15	)

Net asset value, end of period	$	11.35		$	11.33		$	11.05		$	10.49		$	9.77


Total Return⁴
Based on net asset value		1.06%	⁵		5.50%			7.44%			8.88%			(0.76)%	⁵


Ratios to Average Net Assets⁶
Total expenses^7,8		0.46%	⁹		0.48%			0.51%			0.81%			7.16%	^9,10

Total expenses after fees waived and/or reimbursed^7,8		0.40%	⁹		0.41%			0.43%			0.41%			0.43%	⁹

Net investment income^7,8		1.50%	⁹		1.55%			1.45%			1.71%			2.58%	⁹


Supplemental Data
Net assets, end of period (000)	$	69,360		$	55,156		$	28,215		$	7,967		$	24

Portfolio turnover rate of the LifePath Index Master Portfolio		9%	¹¹		15%	¹¹		18%	¹¹		1%	¹²		1%	¹²

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁷

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.02%, 0.03%, 0.02%, 0.13% and 3.37% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁸

Six Months Ended
June 30,
2015

(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,

2011

2014

2013

2012

Investments in underlying funds

0.03%

0.02%

0.04%

⁹

Annualized.

¹⁰

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 7.10%.

¹¹

¹²


Financial Highlights (concluded)		BlackRock LifePath Index Retirement Fund


	Class K
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	11.33		$	11.05		$	10.49		$	9.77		$	10.00

Net investment income²		0.10			0.21			0.19			0.21			0.16
Net realized and unrealized gain (loss)		0.03			0.42			0.61			0.69			(0.22	)

Net increase (decrease) from investment operations		0.13			0.63			0.80			0.90			(0.06	)

Distributions from:³
Net investment income		(0.09	)		(0.21	)		(0.19	)		(0.16	)		(0.16	)
Net realized gain		(0.02	)		(0.14	)		(0.05	)		(0.02	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.11	)		(0.35	)		(0.24	)		(0.18	)		(0.17	)

Net asset value, end of period	$	11.35		$	11.33		$	11.05		$	10.49		$	9.77


Total Return⁴
Based on net asset value		1.20%	⁵		5.78%			7.72%			9.17%			(0.59)%	⁵


Ratios to Average Net Assets⁶
Total expenses^7,8		0.16%	⁹		0.19%			0.22%			0.28%			6.71%	^9,10

Total expenses after fees waived and/or reimbursed^7,8		0.10%	⁹		0.11%			0.14%			0.15%			0.15%	⁹

Net investment income^7,8		1.79%	⁹		1.87%			1.74%			2.02%			2.87%	⁹


Supplemental Data
Net assets, end of period (000)	$	336,349		$	307,946		$	253,463		$	173,667		$	1,905

Portfolio turnover rate of the LifePath Index Master Portfolio		9%	¹¹		15%	¹¹		18%	¹¹		1%	¹²		1%	¹²

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁷

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.02%, 0.03%, 0.02%, 0.04% and 3.38% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁸

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,

2011

2014

2013

2012

Investments in underlying funds

0.03%

0.02%

0.04%

⁹

Annualized.

¹⁰

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 6.74%.

¹¹

¹²


Financial Highlights		BlackRock LifePath Index 2020 Fund


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	11.57		$	11.25		$	10.36		$	9.48		$	10.00

Net investment income²		0.11			0.22			0.22			0.22			0.15
Net realized and unrealized gain (loss)		0.06			0.46			0.94			0.85			(0.53	)

Net increase (decrease) from investment operations		0.17			0.68			1.16			1.07			(0.38	)

Distributions from:³
Net investment income		(0.10	)		(0.22	)		(0.21	)		(0.16	)		(0.13	)
Net realized gain		(0.02	)		(0.14	)		(0.06	)		(0.03	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.12	)		(0.36	)		(0.27	)		(0.19	)		(0.14	)

Net asset value, end of period	$	11.62		$	11.57		$	11.25		$	10.36		$	9.48


Total Return⁴
Based on net asset value		1.43%	⁵		6.10%			11.32%			11.35%			(3.72)%	⁵


Ratios to Average Net Assets⁶
Total expenses^7,8		0.20%	⁹		0.22%			0.26%			0.36%			6.91%	^9,10

Total expenses after fees waived and/or reimbursed^7,8		0.15%	⁹		0.16%			0.18%			0.17%			0.20%	⁹

Net investment income^7,8		1.88%	⁹		1.93%			1.98%			2.14%			2.66%	⁹


Supplemental Data
Net assets, end of period (000)	$	85,691		$	81,485		$	42,447		$	19,786		$	24

Portfolio turnover rate of the LifePath Index Master Portfolio		6%	¹¹		12%	¹¹		12%	¹¹		1%	¹²		1%	¹²

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁷

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.02%, 0.02%, 0.01%, 0.06% and 3.48% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁸

Six Months Ended
June 30,
2015

(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,

2011

2014

2013

2012

Investments in underlying funds

0.04%

0.03%

0.05%

⁹

Annualized.

¹⁰

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 6.94%.

¹¹

¹²

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 13% and 8% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.


Financial Highlights (continued)		BlackRock LifePath Index 2020 Fund


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	11.55		$	11.23		$	10.35		$	9.48		$	10.00

Net investment income²		0.10			0.19			0.19			0.19			0.13
Net realized and unrealized gain (loss)		0.05			0.46			0.94			0.85			(0.52	)

Net increase (decrease) from investment operations		0.15			0.65			1.13			1.04			(0.39	)

Distributions from:³
Net investment income		(0.08	)		(0.19	)		(0.19	)		(0.14	)		(0.12	)
Net realized gain		(0.02	)		(0.14	)		(0.06	)		(0.03	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.10	)		(0.33	)		(0.25	)		(0.17	)		(0.13	)

Net asset value, end of period	$	11.60		$	11.55		$	11.23		$	10.35		$	9.48


Total Return⁴
Based on net asset value		1.32%	⁵		5.87%			10.99%			10.98%			(3.87)%	⁵


Ratios to Average Net Assets⁶
Total expenses^7,8		0.45%	⁹		0.47%			0.51%			0.68%			7.16%	^9,10

Total expenses after fees waived and /or reimbursed^7,8		0.40%	⁹		0.41%			0.44%			0.42%			0.46%	⁹

Net investment income^7,8		1.65%	⁹		1.68%			1.75%			1.85%			2.42%	⁹


Supplemental Data
Net assets, end of period (000)	$	130,175		$	99,790		$	61,996		$	17,944		$	24

Portfolio turnover rate of the LifePath Index Master Portfolio		6%	¹¹		12%	¹¹		12%	¹¹		1%	¹²		1%	¹²

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁷

⁸

Six Months Ended
June 30,
2015

(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,

2011

2014

2013

2012

Investments in underlying funds

0.04%

0.03%

0.05%

⁹

Annualized.

¹⁰

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 7.19%.

¹¹

¹²

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 13% and 8% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.


Financial Highlights (concluded)		BlackRock LifePath Index 2020 Fund


	Class K
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	11.57		$	11.25		$	10.36		$	9.48		$	10.00

Net investment income²		0.11			0.23			0.22			0.22			0.15
Net realized and unrealized gain (loss)		0.06			0.46			0.94			0.85			(0.52	)

Net increase (decrease) from investment operations		0.17			0.69			1.16			1.07			(0.37	)

Distributions from:³
Net investment income		(0.10	)		(0.23	)		(0.21	)		(0.16	)		(0.14	)
Net realized gain		(0.02	)		(0.14	)		(0.06	)		(0.03	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.12	)		(0.37	)		(0.27	)		(0.19	)		(0.15	)

Net asset value, end of period	$	11.62		$	11.57		$	11.25		$	10.36		$	9.48


Total Return⁴
Based on net asset value		1.46%	⁵		6.15%			11.36%			11.36%			(3.71)%	⁵


Ratios to Average Net Assets⁶
Total expenses^7,8		0.15%	⁹		0.17%			0.21%			0.28%			6.81%	^9,10

Total expenses after fees waived and/or reimbursed^7,8		0.10%	⁹		0.11%			0.14%			0.16%			0.18%	⁹

Net investment income^7,8		1.95%	⁹		1.98%			2.00%			2.20%			2.70%	⁹


Supplemental Data
Net assets, end of period (000)	$	813,754		$	699,797		$	511,443		$	249,157		$	1,848

Portfolio turnover rate of the LifePath Index Master Portfolio		6%	¹¹		12%	¹¹		12%	¹¹		1%	¹²		1%	¹²

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁷

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.02%, 0.02%, 0.01%, 0.04% and 3.48% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁸

Six Months Ended
June 30,
2015

(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,

2011

2014

2013

2012

Investments in underlying funds

0.04%

0.03%

0.05%

⁹

Annualized.

¹⁰

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 6.84%.

¹¹

¹²

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 13% and 8% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.


Financial Highlights		BlackRock LifePath Index 2025 Fund


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	11.74		$	11.37		$	10.30		$	9.35		$	10.00

Net investment income²		0.12			0.24			0.25			0.23			0.14
Net realized and unrealized gain (loss)		0.07			0.47			1.12			0.92			(0.65	)

Net increase (decrease) from investment operations		0.19			0.71			1.37			1.15			(0.51	)

Distributions from:³
Net investment income		(0.10	)		(0.22	)		(0.22	)		(0.16	)		(0.13	)
Net realized gain		(0.01	)		(0.12	)		(0.08	)		(0.04	)		—
Return of capital		—			—			—			—			(0.01	)²

Total distributions		(0.11	)		(0.34	)		(0.30	)		(0.20	)		(0.14	)

Net asset value, end of period	$	11.82		$	11.74		$	11.37		$	10.30		$	9.35


Total Return⁴
Based on net asset value		1.62%	⁵		6.33%			13.46%			12.34%			(5.12)%	⁵


Ratios to Average Net Assets⁶
Total expenses^7,8		0.20%	⁹		0.23%			0.27%			0.51%			6.97%	^9,10

Total expenses after fees waived and/or reimbursed^7,8		0.15%	⁹		0.16%			0.17%			0.18%			0.21%	⁹

Net investment income^7,8		2.00%	⁹		2.03%			2.25%			2.26%			2.55%	⁹


Supplemental Data
Net assets, end of period (000)	$	64,717		$	53,760		$	21,097		$	4,844		$	23

Portfolio turnover rate of the LifePath Index Master Portfolio		7%	¹¹		15%	¹¹		13%	¹¹		0%	^12,13		0%	^12,13

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁷

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.02%, 0.02%, 0.02%, 0.12% and 3.53% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁸

Six Months Ended
June 30,
2015

(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,

2011

2014

2013

2012

Investments in underlying funds

0.05%

0.04%

0.03%

0.06%

⁹

Annualized.

¹⁰

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 6.99%.

¹¹

¹²

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 14% and 8% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹³

Rounds to less than 1%.


Financial Highlights (continued)		BlackRock LifePath Index 2025 Fund


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	11.73		$	11.36		$	10.30		$	9.35		$	10.00

Net investment income²		0.11			0.21			0.23			0.22			0.13
Net realized and unrealized gain (loss)		0.07			0.48			1.11			0.91			(0.66	)

Net increase (decrease) from investment operations		0.18			0.69			1.34			1.13			(0.53	)

Distributions from:³
Net investment income		(0.09	)		(0.20	)		(0.20	)		(0.14	)		(0.11	)
Net realized gain		(0.01	)		(0.12	)		(0.08	)		(0.04	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.10	)		(0.32	)		(0.28	)		(0.18	)		(0.12	)

Net asset value, end of period	$	11.81		$	11.73		$	11.36		$	10.30		$	9.35


Total Return⁴
Based on net asset value		1.50%	⁵		6.10%			13.13%			12.12%			(5.26)%	⁵


Ratios to Average Net Assets⁶
Total expenses^7,8		0.45%	⁹		0.48%			0.52%			0.85%			7.22%	^9,10

Total expenses after fees waived and/or reimbursed^7,8		0.40%	⁹		0.41%			0.43%			0.44%			0.46%	⁹

Net investment income^7,8		1.78%	⁹		1.77%			2.04%			2.21%			2.30%	⁹


Supplemental Data
Net assets, end of period (000)	$	103,742		$	89,983		$	49,232		$	3,918		$	23

Portfolio turnover rate of the LifePath Index Master Portfolio		7%	¹¹		15%	¹¹		13%	¹¹		0%	^12,13		0%	^12,13

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁷

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.02%, 0.02%, 0.02%, 0.13% and 3.53% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁸

Six Months Ended
June 30,
2015

(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,

2011

2014

2013

2012

Investments in underlying funds

0.05%

0.04%

0.03%

0.06%

⁹

Annualized.

¹⁰

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 7.24%.

¹¹

¹²

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 14% and 8% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹³

Rounds to less than 1%.


Financial Highlights (concluded)		BlackRock LifePath Index 2025 Fund


	Class K
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	11.75		$	11.37		$	10.30		$	9.35		$	10.00

Net investment income²		0.13			0.24			0.24			0.23			0.14
Net realized and unrealized gain (loss)		0.05			0.49			1.14			0.92			(0.65	)

Net increase (decrease) from investment operations		0.18			0.73			1.38			1.15			(0.51	)

Distributions from:³
Net investment income		(0.10	)		(0.23	)		(0.23	)		(0.16	)		(0.13	)
Net realized gain		(0.01	)		(0.12	)		(0.08	)		(0.04	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.11	)		(0.35	)		(0.31	)		(0.20	)		(0.14	)

Net asset value, end of period	$	11.82		$	11.75		$	11.37		$	10.30		$	9.35


Total Return⁴
Based on net asset value		1.56%	⁵		6.47%			13.48%			12.34%			(5.10)%	⁵


Ratios to Average Net Assets⁶
Total expenses^7,8		0.15%	⁹		0.18%			0.23%			0.37%			6.87%	^9,10

Total expenses after fees waived and/or reimbursed^7,8		0.10%	⁹		0.11%			0.14%			0.16%			0.18%	⁹

Net investment income^7,8		2.08%	⁹		2.08%			2.16%			2.26%			2.58%	⁹


Supplemental Data
Net assets, end of period (000)	$	460,334		$	374,396		$	208,280		$	113,655		$	1,823

Portfolio turnover rate of the LifePath Index Master Portfolio		7%	¹¹		15%	¹¹		13%	¹¹		0%	^12,13		0%	^12,13

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁷

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.02%, 0.02%, 0.02%, 0.07% and 3.53% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁸

Six Months Ended
June 30,
2015

(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,

2011

2014

2013

2012

Investments in underlying funds

0.05%

0.04%

0.03%

0.06%

⁹

Annualized.

¹⁰

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 6.89%.

¹¹

¹²

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 14% and 8% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹³

Rounds to less than 1%.


Financial Highlights		BlackRock LifePath Index 2030 Fund


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	11.86		$	11.49		$	10.26		$	9.24		$	10.00

Net investment income²		0.13			0.25			0.25			0.23			0.13
Net realized and unrealized gain (loss)		0.08			0.51			1.31			1.00			(0.76	)

Net increase (decrease) from investment operations		0.21			0.76			1.56			1.23			(0.63	)

Distributions from:³
Net investment income		(0.11	)		(0.24	)		(0.24	)		(0.17	)		(0.12	)
Net realized gain		(0.01	)		(0.15	)		(0.09	)		(0.04	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.12	)		(0.39	)		(0.33	)		(0.21	)		(0.13	)

Net asset value, end of period	$	11.95		$	11.86		$	11.49		$	10.26		$	9.24


Total Return⁴
Based on net asset value		1.73%	⁵		6.58%			15.34%			13.38%			(6.30)%	⁵


Ratios to Average Net Assets⁶
Total expenses^7,8		0.19%	⁹		0.22%			0.27%			0.41%			7.04%	^9,10

Total expenses after fees waived and/or reimbursed^7,8		0.15%	⁹		0.16%			0.19%			0.18%			0.22%	⁹

Net investment income^7,8		2.13%	⁹		2.10%			2.30%			2.27%			2.47%	⁹


Supplemental Data
Net assets, end of period (000)	$	82,242		$	73,640		$	32,538		$	16,158		$	23

Portfolio turnover rate of the LifePath Index Master Portfolio		5%	¹¹		20%	¹¹		12%	¹¹		2%	¹²		0%	^12,13

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁷

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.01%, 0.02%, 0.01%, 0.07% and 3.57% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁸

Six Months Ended
June 30,
2015

(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,

2011

2014

2013

2012

Investments in underlying funds

0.06%

0.05%

0.04%

0.06%

⁹

Annualized.

¹⁰

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 7.06%.

¹¹

¹²

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 18% and 6% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹³

Rounds to less than 1%.


Financial Highlights (continued)		BlackRock LifePath Index 2030 Fund


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	11.85		$	11.49		$	10.26		$	9.24		$	10.00

Net investment income²		0.11			0.22			0.23			0.20			0.12
Net realized and unrealized gain (loss)		0.08			0.50			1.30			1.01			(0.77	)

Net increase (decrease) from investment operations		0.19			0.72			1.53			1.21			(0.65	)

Distributions from:³
Net investment income		(0.09	)		(0.21	)		(0.21	)		(0.15	)		(0.10	)
Net realized gain		(0.01	)		(0.15	)		(0.09	)		(0.04	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.10	)		(0.36	)		(0.30	)		(0.19	)		(0.11	)

Net asset value, end of period	$	11.94		$	11.85		$	11.49		$	10.26		$	9.24


Total Return⁴
Based on net asset value		1.61%	⁵		6.26%			15.09%			13.11%			(6.44)%	⁵


Ratios to Average Net Assets⁶
Total expenses^7,8		0.45%	⁹		0.47%			0.52%			0.72%			7.29%	^9,10

Total expenses after fees waived and/or reimbursed^7,8		0.40%	⁹		0.41%			0.45%			0.44%			0.47%	⁹

Net investment income^7,8		1.91%	⁹		1.84%			2.10%			1.99%			2.22%	⁹


Supplemental Data
Net assets, end of period (000)	$	143,037		$	111,333		$	62,487		$	13,908		$	23

Portfolio turnover rate of the LifePath Index Master Portfolio		5%	¹¹		20%	¹¹		12%	¹¹		2%	¹²		0%	^12,13

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁷

⁸

Six Months Ended
June 30,
2015

(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,

2011

2014

2013

2012

Investments in underlying funds

0.06%

0.05%

0.04%

0.06%

⁹

Annualized.

¹⁰

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 7.32%.

¹¹

¹²

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 18% and 6% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹³

Rounds to less than 1%.


Financial Highlights (concluded)		BlackRock LifePath Index 2030 Fund


	Class K
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	11.85		$	11.48		$	10.25		$	9.24		$	10.00

Net investment income²		0.13			0.25			0.26			0.24			0.14
Net realized and unrealized gain (loss)		0.08			0.51			1.30			0.98			(0.77	)

Net increase (decrease) from investment operations		0.21			0.76			1.56			1.22			(0.63	)

Distributions from:³
Net investment income		(0.11	)		(0.24	)		(0.24	)		(0.17	)		(0.12	)
Net realized gain		(0.01	)		(0.15	)		(0.09	)		(0.04	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.12	)		(0.39	)		(0.33	)		(0.21	)		(0.13	)

Net asset value, end of period	$	11.94		$	11.85		$	11.48		$	10.25		$	9.24


Total Return⁴
Based on net asset value		1.75%	⁵		6.64%			15.40%			13.28%			(6.28)%	⁵


Ratios to Average Net Assets⁶
Total expenses^7,8		0.15%	⁹		0.17%			0.22%			0.31%			6.94%	^9,10

Total expenses after fees waived and/or reimbused^7,8		0.10%	⁹		0.11%			0.15%			0.17%			0.19%	⁹

Net investment income^7,8		2.22%	⁹		2.14%			2.32%			2.37%			2.50%	⁹


Supplemental Data
Net assets, end of period (000)	$	766,511		$	633,093		$	433,320		$	175,849		$	1,802

Portfolio turnover rate of the LifePath Index Master Portfolio		5%	¹¹		20%	¹¹		12%	¹¹		2%	¹²		0%	^12,13

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁷

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.01%, 0.02%, 0.01%, 0.09% and 3.57% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁸

Six Months Ended
June 30,
2015

(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,

2011

2014

2013

2012

Investments in underlying funds

0.06%

0.05%

0.04%

0.06%

⁹

Annualized.

¹⁰

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 6.96%.

¹¹

¹²

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 18% and 6% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹³

Rounds to less than 1%.


Financial Highlights		BlackRock LifePath Index 2035 Fund


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	11.98		$	11.57		$	10.21		$	9.14		$	10.00

Net investment income²		0.14			0.26			0.29			0.25			0.13
Net realized and unrealized gain (loss)		0.09			0.51			1.43			1.04			(0.87	)

Net increase (decrease) from investment operations		0.23			0.77			1.72			1.29			(0.74	)

Distributions from:³
Net investment income		(0.11	)		(0.24	)		(0.25	)		(0.17	)		(0.11	)
Net realized gain		(0.00	)⁴		(0.12	)		(0.11	)		(0.05	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.11	)		(0.36	)		(0.36	)		(0.22	)		(0.12	)

Net asset value, end of period	$	12.10		$	11.98		$	11.57		$	10.21		$	9.14


Total Return⁵
Based on net asset value		1.97%	⁶		6.68%			16.98%			14.16%			(7.37)%	⁶


Ratios to Average Net Assets⁷
Total expenses^8,9		0.20%	¹⁰		0.24%			0.28%			0.86%			7.12%	^10,11

Total expenses after fees waived and/or reimbursed^8,9		0.14%	¹⁰		0.15%			0.18%			0.20%			0.23%	¹⁰

Net investment income^8,9		2.23%	¹⁰		2.18%			2.59%			2.52%			2.40%	¹⁰


Supplemental Data
Net assets, end of period (000)	$	46,313		$	37,073		$	10,605		$	1,835		$	23

Portfolio turnover rate of the LifePath Index Master Portfolio		6%	¹²		25%	¹²		12%	¹²		1%	¹³		0%	^13,14

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁸

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.02%, 0.02%, 0.03%, 0.21% and 3.61% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁹

Six Months Ended
June 30,
2015

(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,

2011

2014

2013

2012

Investments in underlying funds

0.07%

0.06%

0.05%

0.04%

0.06%

¹⁰

Annualized.

¹¹

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 7.15%.

¹²

¹³

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 24% and 7% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹⁴

Rounds to less than 1%.


Financial Highlights (continued)		BlackRock LifePath Index 2035 Fund


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	11.96		$	11.56		$	10.20		$	9.14		$	10.00

Net investment income²		0.12			0.23			0.25			0.26			0.12
Net realized and unrealized gain (loss)		0.09			0.51			1.45			1.00			(0.87	)

Net increase (decrease) from investment operations		0.21			0.74			1.70			1.26			(0.75	)

Distributions from:³
Net investment income		(0.10	)		(0.22	)		(0.23	)		(0.15	)		(0.10	)
Net realized gain		(0.00	)⁴		(0.12	)		(0.11	)		(0.05	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.10	)		(0.34	)		(0.34	)		(0.20	)		(0.11	)

Net asset value, end of period	$	12.07		$	11.96		$	11.56		$	10.20		$	9.14


Total Return⁵
Based on net asset value		1.77%	⁶		6.37%			16.74%			13.83%			(7.52)%	⁶


Ratios to Average Net Assets⁷
Total expenses^8,9		0.45%	¹⁰		0.48%			0.54%			0.89%			7.47%	^10,11

Total expenses after fees waived and/or reimbursed^8,9		0.39%	¹⁰		0.41%			0.44%			0.45%			0.48%	¹⁰

Net investment income^8,9		2.03%	¹⁰		1.91%			2.29%			2.59%			2.14%	¹⁰


Supplemental Data
Net assets, end of period (000)	$	95,630		$	83,587		$	38,107		$	3,798		$	23

Portfolio turnover rate of the LifePath Index Master Portfolio		6%	¹²		25%	¹²		12%	¹²		1%	¹³		0%	^13,14

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁸

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.02%, 0.02%, 0.03%, 0.09% and 3.61% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁹

Six Months Ended
June 30,
2015

(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,

2011

2014

2013

2012

Investments in underlying funds

0.07%

0.06%

0.05%

0.04%

0.06%

¹⁰

Annualized.

¹¹

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 7.50%.

¹²

¹³

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 24% and 7% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹⁴

Rounds to less than 1%.


Financial Highlights (concluded)		BlackRock LifePath Index 2035 Fund


	Class K
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	11.98		$	11.56		$	10.20		$	9.14		$	10.00

Net investment income²		0.14			0.26			0.27			0.24			0.13
Net realized and unrealized gain (loss)		0.09			0.53			1.45			1.04			(0.87	)

Net increase (decrease) from investment operations		0.23			0.79			1.72			1.28			(0.74	)

Distributions from:³
Net investment income		(0.12	)		(0.25	)		(0.25	)		(0.17	)		(0.11	)
Net realized gain		(0.00	)⁴		(0.12	)		(0.11	)		(0.05	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.12	)		(0.37	)		(0.36	)		(0.22	)		(0.12	)

Net asset value, end of period	$	12.09		$	11.98		$	11.56		$	10.20		$	9.14


Total Return⁵
Based on net asset value		1.91%	⁶		6.82%			17.02%			14.07%			(7.35)%	⁶


Ratios to Average Net Assets⁷
Total expenses^8,9		0.15%	¹⁰		0.19%			0.25%			0.48%			7.02%	^10,11

Total expenses after fees waived and/or reimbursed^8,9		0.09%	¹⁰		0.11%			0.15%			0.17%			0.19%	¹⁰

Net investment income^8,9		2.33%	¹⁰		2.22%			2.44%			2.43%			2.43%	¹⁰


Supplemental Data
Net assets, end of period (000)	$	346,455		$	289,331		$	158,455		$	76,095		$	1,782

Portfolio turnover rate of the LifePath Index Master Portfolio		6%	¹²		25%	¹²		12%	¹²		1%	¹³		0%	^13,14

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁸

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.02%, 0.02%, 0.03%, 0.10% and 3.61% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁹

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,
2011

2014

2013

2012

Investments in underlying funds

0.07%

0.06%

0.05%

0.04%

0.06%

¹⁰

Annualized.

¹¹

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 7.05%.

¹²

¹³

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 24% and 7% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹⁴

Rounds to less than 1%.


Financial Highlights		BlackRock LifePath Index 2040 Fund


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	12.11		$	11.69		$	10.18		$	9.04		$	10.00

Net investment income²		0.14			0.27			0.28			0.23			0.13
Net realized and unrealized gain (loss)		0.10			0.54			1.60			1.12			(0.98	)

Net increase (decrease) from investment operations		0.24			0.81			1.88			1.35			(0.85	)

Distributions from:³
Net investment income		(0.12	)		(0.26	)		(0.26	)		(0.18	)		(0.10	)
Net realized gain		(0.00	)⁴		(0.13	)		(0.11	)		(0.03	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.12	)		(0.39	)		(0.37	)		(0.21	)		(0.11	)

Net asset value, end of period	$	12.23		$	12.11		$	11.69		$	10.18		$	9.04


Total Return⁵
Based on net asset value		2.00%	⁶		6.94%			18.61%			15.01%			(8.44)%	⁶


Ratios to Average Net Assets⁷
Total expenses^8,9		0.19%	¹⁰		0.23%			0.29%			0.53%			7.17%	^10,11

Total expenses after fees waived and/or reimbursed^8,9		0.14%	¹⁰		0.16%			0.20%			0.19%			0.23%	¹⁰

Net investment income^8,9		2.35%	¹⁰		2.23%			2.55%			2.36%			2.34%	¹⁰


Supplemental Data
Net assets, end of period (000)	$	60,017		$	50,054		$	19,346		$	9,554		$	23

Portfolio turnover rate of the LifePath Index Master Portfolio		5%	¹²		29%	¹²		12%	¹²		3%	¹³		0%	^13,14

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁸

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.02%, 0.02%, 0.02%, 0.11% and 3.65% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁹

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,
2011

2014

2013

2012

Investments in underlying funds

0.07%

0.06%

0.05%

0.04%

0.07%

¹⁰

Annualized.

¹¹

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 7.19%.

¹²

¹³

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 21% and 5% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹⁴

Rounds to less than 1%.


Financial Highlights (continued)		BlackRock LifePath Index 2040 Fund


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	12.09		$	11.68		$	10.17		$	9.04		$	10.00

Net investment income²		0.13			0.24			0.27			0.21			0.11
Net realized and unrealized gain (loss)		0.10			0.53			1.58			1.11			(0.97	)

Net increase (decrease) from investment operations		0.23			0.77			1.85			1.32			(0.86	)

Distributions from:³
Net investment income		(0.11	)		(0.23	)		(0.23	)		(0.16	)		(0.09	)
Net realized gain		(0.00	)⁴		(0.13	)		(0.11	)		(0.03	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.11	)		(0.36	)		(0.34	)		(0.19	)		(0.10	)

Net asset value, end of period	$	12.21		$	12.09		$	11.68		$	10.17		$	9.04


Total Return⁵
Based on net asset value		1.88%	⁶		6.62%			18.38%			14.63%			(8.58)%	⁶


Ratios to Average Net Assets⁷
Total expenses^8,9		0.44%	¹⁰		0.48%			0.53%			0.85%			7.42%	^10,11

Total expenses after fees waived and/or reimbursed^8,9		0.39%	¹⁰		0.41%			0.45%			0.45%			0.48%	¹⁰

Net investment income^8,9		2.13%	¹⁰		1.98%			2.39%			2.13%			2.08%	¹⁰


Supplemental Data
Net assets, end of period (000)	$	82,011		$	58,952		$	31,753		$	7,563		$	23

Portfolio turnover rate of the LifePath Index Master Portfolio		5%	¹²		29%	¹²		12%	¹²		3%	¹³		0%	^13,14

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁸

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.02%, 0.02%, 0.02%, 0.14% and 3.65% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁹

Six Months Ended
June 30,
2015

(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,

2011

2014

2013

2012

Investments in underlying funds

0.07%

0.06%

0.05%

0.04%

0.07%

¹⁰

Annualized.

¹¹

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 7.45%.

¹²

¹³

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 21% and 5% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹⁴

Rounds to less than 1%.


Financial Highlights (concluded)		BlackRock LifePath Index 2040 Fund


	Class K
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	12.10		$	11.69		$	10.18		$	9.04		$	10.00

Net investment income²		0.15			0.27			0.29			0.25			0.13
Net realized and unrealized gain (loss)		0.10			0.53			1.59			1.10			(0.97	)

Net increase (decrease) from investment operations		0.25			0.80			1.88			1.35			(0.84	)

Distributions from:³
Net investment income		(0.12	)		(0.26	)		(0.26	)		(0.18	)		(0.11	)
Net realized gain		(0.00	)⁴		(0.13	)		(0.11	)		(0.03	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.12	)		(0.39	)		(0.37	)		(0.21	)		(0.12	)

Net asset value, end of period	$	12.23		$	12.10		$	11.69		$	10.18		$	9.04


Total Return⁵
Based on net asset value		2.11%	⁶		6.90%			18.66%			15.03%			(8.42)%	⁶


Ratios to Average Net Assets⁷
Total expenses^8,9		0.15%	¹⁰		0.18%			0.24%			0.39%			7.06%	^10,11

Total expenses after fees waived and/or reimbursed^8,9		0.09%	¹⁰		0.11%			0.15%			0.18%			0.20%	¹⁰

Net investment income^8,9		2.44%	¹⁰		2.27%			2.58%			2.52%			2.36%	¹⁰


Supplemental Data
Net assets, end of period (000)	$	529,903		$	437,342		$	275,471		$	90,476		$	1,763

Portfolio turnover rate of the LifePath Index Master Portfolio		5%	¹²		29%	¹²		12%	¹²		3%	¹³		0%	^13,14

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁸

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.02%, 0.02%, 0.02%, 0.07% and 3.65% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁹

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,
2011

2014

2013

2012

Investments in underlying funds

0.07%

0.06%

0.05%

0.04%

0.07%

¹⁰

Annualized.

¹¹

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 7.09%.

¹²

¹³

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 21% and 5% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹⁴

Rounds to less than 1%.


Financial Highlights		BlackRock LifePath Index 2045 Fund


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	12.25		$	11.78		$	10.13		$	8.94		$	10.00

Net investment income²		0.15			0.29			0.34			0.26			0.12
Net realized and unrealized gain (loss)		0.10			0.54			1.69			1.13			(1.07	)

Net increase (decrease) from investment operations		0.25			0.83			2.03			1.39			(0.95	)

Distributions from:³
Net investment income		(0.12	)		(0.26	)		(0.27	)		(0.18	)		(0.10	)
Net realized gain		(0.00	)⁴		(0.10	)		(0.11	)		(0.02	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.12	)		(0.36	)		(0.38	)		(0.20	)		(0.11	)

Net asset value, end of period	$	12.38		$	12.25		$	11.78		$	10.13		$	8.94


Total Return⁵
Based on net asset value		2.06%	⁶		7.07%			20.18%			15.58%			(9.51)%	⁶


Ratios to Average Net Assets⁷
Total expenses^8,9		0.21%	¹⁰		0.26%			0.35%			1.35%			7.23%	^10,11

Total expenses after fees waived and/or reimbursed^8,9		0.14%	¹⁰		0.15%			0.20%			0.22%			0.24%	¹⁰

Net investment income^8,9		2.39%	¹⁰		2.35%			3.01%			2.64%			2.26%	¹⁰


Supplemental Data
Net assets, end of period (000)	$	39,020		$	27,964		$	4,117		$	532		$	22

Portfolio turnover rate of the LifePath Index Master Portfolio		7%	¹²		30%	¹²		12%	¹²		2%	¹³		0%	^13,14

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁸

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.03%, 0.03%, 0.05%, 0.36% and 3.69% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁹

Six Months Ended
June 30,

2015

(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,

2011

2014

2013

2012

Investments in underlying funds

0.08%

0.07%

0.05%

0.04%

0.07%

¹⁰

Annualized.

¹¹

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 7.25%.

¹²

¹³

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 22% and 6% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹⁴

Rounds to less than 1%.


Financial Highlights (continued)		BlackRock LifePath Index 2045 Fund


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	12.23		$	11.77		$	10.12		$	8.94		$	10.00

Net investment income²		0.14			0.25			0.29			0.27			0.11
Net realized and unrealized gain (loss)		0.11			0.54			1.72			1.09			(1.08	)

Net increase (decrease) from investment operations		0.25			0.79			2.01			1.36			(0.97	)

Distributions from:³
Net investment income		(0.10	)		(0.23	)		(0.25	)		(0.16	)		(0.08	)
Net realized gain		(0.01	)		(0.10	)		(0.11	)		(0.02	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.11	)		(0.33	)		(0.36	)		(0.18	)		(0.09	)

Net asset value, end of period	$	12.37		$	12.23		$	11.77		$	10.12		$	8.94


Total Return⁴
Based on net asset value		2.03%	⁵		6.74%			19.96%			15.27%			(9.64)%	⁵


Ratios to Average Net Assets⁶
Total expenses^7,8		0.46%	⁹		0.51%			0.58%			1.39%			7.48%	^9,10

Total expenses after fees waived and/or reimbursed^7,8		0.39%	⁹		0.40%			0.44%			0.46%			0.49%	⁹

Net investment income^7,8		2.21%	⁹		2.04%			2.61%			2.75%			2.00%	⁹


Supplemental Data
Net assets, end of period (000)	$	42,630		$	33,859		$	16,428		$	887		$	22

Portfolio turnover rate of the LifePath Index Master Portfolio		7%	¹¹		30%	¹¹		12%	¹¹		2%	¹²		0%	^12,13

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁷

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.03%, 0.03%, 0.06%, 0.25% and 3.69% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁸

Six Months Ended
June 30,
2015

(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,
2011

2014

2013

2012

Investments in underlying funds

0.08%

0.07%

0.05%

0.04%

0.07%

⁹

Annualized.

¹⁰

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 7.50%.

¹¹

¹²

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 22% and 6% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹³

Rounds to less than 1%.


Financial Highlights (concluded)		BlackRock LifePath Index 2045 Fund


	Class K
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	12.26		$	11.79		$	10.13		$	8.94		$	10.00

Net investment income²		0.16			0.28			0.30			0.26			0.12
Net realized and unrealized gain (loss)		0.10			0.55			1.74			1.13			(1.07	)

Net increase (decrease) from investment operations		0.26			0.83			2.04			1.39			(0.95	)

Distributions from:³
Net investment income		(0.12	)		(0.26	)		(0.27	)		(0.18	)		(0.10	)
Net realized gain		(0.01	)		(0.10	)		(0.11	)		(0.02	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.13	)		(0.36	)		(0.38	)		(0.20	)		(0.11	)

Net asset value, end of period	$	12.39		$	12.26		$	11.79		$	10.13		$	8.94


Total Return⁴
Based on net asset value		2.09%	⁵		7.10%			20.32%			15.61%			(9.49)%	⁵


Ratios to Average Net Assets⁶
Total expenses^7,8		0.16%	⁹		0.22%			0.31%			0.89%			7.12%	^9,10

Total expenses after fees waived and/or reimbursed^7,8		0.09%	⁹		0.10%			0.15%			0.18%			0.21%	⁹

Net investment income^7,8		2.49%	⁹		2.33%			2.73%			2.60%			2.29%	⁹


Supplemental Data
Net assets, end of period (000)	$	198,779		$	164,934		$	84,015		$	31,724		$	1,744

Portfolio turnover rate of the LifePath Index Master Portfolio		7%	¹¹		30%	¹¹		12%	¹¹		2%	¹²		0%	^12,13

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁷

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.03%, 0.03%, 0.06%, 0.24% and 3.69% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁸

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,
2011

2014

2013

2012

Investments in underlying funds

0.08%

0.07%

0.05%

0.04%

0.07%

⁹

Annualized.

¹⁰

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 7.15%.

¹¹

¹²

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 22% and 6% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹³

Rounds to less than 1%.


Financial Highlights		BlackRock LifePath Index 2050 Fund


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	12.41		$	11.91		$	10.11		$	8.86		$	10.00

Net investment income²		0.15			0.29			0.34			0.24			0.12
Net realized and unrealized gain (loss)		0.11			0.57			1.82			1.21			(1.16	)

Net increase (decrease) from investment operations		0.26			0.86			2.16			1.45			(1.04	)

Distributions from:³
Net investment income		(0.12	)		(0.26	)		(0.27	)		(0.19	)		(0.09	)
Net realized gain		(0.00	)⁴		(0.10	)		(0.09	)		(0.01	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.12	)		(0.36	)		(0.36	)		(0.20	)		(0.10	)

Net asset value, end of period	$	12.55		$	12.41		$	11.91		$	10.11		$	8.86


Total Return⁵
Based on net asset value		2.12%	⁶		7.23%			21.56%			16.35%			(10.36)%	⁶


Ratios to Average Net Assets⁷
Total expenses^8,9		0.20%	¹⁰		0.27%			0.34%			1.55%			7.27%	^10,11

Total expenses after fees waived and/or reimbursed^8,9		0.14%	¹⁰		0.15%			0.20%			0.21%			0.24%	¹⁰

Net investment income^8,9		2.42%	¹⁰		2.33%			3.03%			2.44%			2.22%	¹⁰


Supplemental Data
Net assets, end of period (000)	$	35,889		$	24,618		$	7,679		$	1,573		$	22

Portfolio turnover rate of the LifePath Index Master Portfolio		8%	¹²		22%	¹²		12%	¹²		3%	¹³		0%	^13,14

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁸

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.03%, 0.03%, 0.06%, 0.47% and 3.71% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁹

Six Months Ended
June 30,
2015

(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,

2011

2014

2013

2012

Investments in underlying funds

0.08%

0.06%

0.05%

0.07%

¹⁰

Annualized.

¹¹

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 7.30%.

¹²

¹³

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 26% and 5% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹⁴

Rounds to less than 1%.


Financial Highlights (continued)		BlackRock LifePath Index 2050 Fund


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	12.39		$	11.89		$	10.10		$	8.86		$	10.00

Net investment income²		0.14			0.26			0.32			0.28			0.10
Net realized and unrealized gain (loss)		0.11			0.57			1.81			1.14			(1.15	)

Net increase (decrease) from investment operations		0.25			0.83			2.13			1.42			(1.05	)

Distributions from:³
Net investment income		(0.11	)		(0.23	)		(0.25	)		(0.17	)		(0.08	)
Net realized gain		(0.00	)⁴		(0.10	)		(0.09	)		(0.01	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.11	)		(0.33	)		(0.34	)		(0.18	)		(0.09	)

Net asset value, end of period	$	12.53		$	12.39		$	11.89		$	10.10		$	8.86


Total Return⁵
Based on net asset value		2.00%	⁶		7.01%			21.25%			16.00%			(10.49)%	⁶


Ratios to Average Net Assets⁷
Total expenses^8,9		0.46%	¹⁰		0.52%			0.59%			1.33%			7.69%	^10,11

Total expenses after fees waived and/or reimbursed^8,9		0.39%	¹⁰		0.40%			0.45%			0.47%			0.49%	¹⁰

Net investment income^8,9		2.21%	¹⁰		2.08%			2.85%			2.86%			1.97%	¹⁰


Supplemental Data
Net assets, end of period (000)	$	30,445		$	22,053		$	12,103		$	1,090		$	25

Portfolio turnover rate of the LifePath Index Master Portfolio		8%	¹²		22%	¹²		12%	¹²		3%	¹³		0%	^13,14

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁸

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.03%, 0.03%, 0.06%, 0.22% and 3.71% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁹

Includes the LifePath Index Fund’s share of the LifePath Master Portfolio’s allocated expenses and/or net investment income. Excludes expenses incurred indirectly as a result of the LifePath Master Portfolio’s investments in underlying funds as follows:

Six Months Ended

June 30,
2015
(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,
2011

2014

2013

2012

Investments in underlying funds

0.08%

0.06%

0.05%

0.07%

¹⁰

Annualized.

¹¹

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 7.71%.

¹²

¹³

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 26% and 5% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹⁴

Rounds to less than 1%.


Financial Highlights (concluded)		BlackRock LifePath Index 2050 Fund


	Class K
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	12.41		$	11.91		$	10.11		$	8.86		$	10.00

Net investment income²		0.16			0.29			0.32			0.26			0.12
Net realized and unrealized gain (loss)		0.10			0.58			1.85			1.19			(1.16	)

Net increase (decrease) from investment operations		0.26			0.87			2.17			1.45			(1.04	)

Distributions from:³
Net investment income		(0.12	)		(0.27	)		(0.28	)		(0.19	)		(0.09	)
Net realized gain		(0.00	)⁴		(0.10	)		(0.09	)		(0.01	)		—
Return of capital		—			—			—			—			(0.01	)

Total distributions		(0.12	)		(0.37	)		(0.37	)		(0.20	)		(0.10	)

Net asset value, end of period	$	12.55		$	12.41		$	11.91		$	10.11		$	8.86


Total Return⁵
Based on net asset value		2.14%	⁶		7.28%			21.61%			16.37%			(10.34)%	⁶


Ratios to Average Net Assets⁶
Total expenses^8,9		0.17%	¹⁰		0.23%			0.33%			0.99%			7.17%	^10,11

Total expenses after fees waived and/or reimbursed^8,9		0.09%	¹⁰		0.10%			0.15%			0.19%			0.21%	¹⁰

Net investment income^8,9		2.51%	¹⁰		2.37%			2.88%			2.67%			2.25%	¹⁰


Supplemental Data
Net assets, end of period (000)	$	231,070		$	186,198		$	83,933		$	23,342		$	1,727

Portfolio turnover rate of the LifePath Index Master Portfolio		8%	¹²		22%	¹²		12%	¹²		3%	¹³		0%	^13,14

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁸

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.03%, 0.03%, 0.06%, 0.27% and 3.71% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁹

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,
2011

2014

2013

2012

Investments in underlying funds

0.08%

0.06%

0.05%

0.07%

¹⁰

Annualized.

¹¹

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 7.19%.

¹²

¹³

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 26% and 5% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹⁴

Rounds to less than 1%.


Financial Highlights		BlackRock LifePath Index 2055 Fund


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	12.60		$	12.05		$	10.05		$	8.80		$	10.00

Net investment income²		0.16			0.31			0.37			0.24			0.12
Net realized and unrealized gain (loss)		0.11			0.58			1.91			1.23			(1.22	)

Net increase (decrease) from investment operations		0.27			0.89			2.28			1.47			(1.10	)

Distributions from:³
Net investment income		(0.12	)		(0.27	)		(0.28	)		(0.22	)		(0.09	)
Net realized gain		(0.00	)⁴		(0.07	)		—			—			—
Return of capital		—			—			—			(0.00	)⁴		(0.01	)

Total distributions		(0.12	)		(0.34	)		(0.28	)		(0.22	)		(0.10	)

Net asset value, end of period	$	12.75		$	12.60		$	12.05		$	10.05		$	8.80


Total Return⁵
Based on net asset value		2.13%	⁶		7.46%			22.91%			16.78%			(10.98)%	⁶


Ratios to Average Net Assets⁷
Total expenses^8,9		0.29%	¹⁰		0.43%			0.75%			4.43%			7.32%	^10,11

Total expenses after fees waived and/or reimbursed^8,9		0.13%	¹⁰		0.13%			0.20%			0.24%			0.24%	¹⁰

Net investment income^8,9		2.48%	¹⁰		2.50%			3.25%			2.46%			2.21%	¹⁰


Supplemental Data
Net assets, end of period (000)	$	15,443		$	7,874		$	896		$	25		$	22

Portfolio turnover rate of the LifePath Index Master Portfolio		11%	¹²		22%	¹²		15%	¹²		8%	¹³		0%	^13,14

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁸

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.05%, 0.10%, 0.26%, 1.36% and 3.73% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁹

Six Months Ended
June 30,
2015

(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,

2011

2014

2013

2012

Investments in underlying funds

0.09%

0.06%

0.05%

0.08%

¹⁰

Annualized.

¹¹

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 7.34%.

¹²

¹³

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 53% and 13% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹⁴

Rounds to less than 1%.


Financial Highlights (continued)		BlackRock LifePath Index 2055 Fund


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	12.58		$	12.04		$	10.05		$	8.80		$	10.00

Net investment income²		0.14			0.27			0.33			0.25			0.10
Net realized and unrealized gain (loss)		0.11			0.58			1.92			1.20			(1.21	)

Net increase (decrease) from investment operations		0.25			0.85			2.25			1.45			(1.11	)

Distributions from:³
Net investment income		(0.10	)		(0.24	)		(0.26	)		(0.20	)		(0.08	)
Net realized gain		(0.00	)⁴		(0.07	)		—			—			—
Return of capital		—			—			—			(0.00	)⁴		(0.01	)

Total distributions		(0.10	)		(0.31	)		(0.26	)		(0.20	)		(0.09	)

Net asset value, end of period	$	12.73		$	12.58		$	12.04		$	10.05		$	8.80


Total Return⁵
Based on net asset value		2.02%	⁶		7.13%			22.55%			16.55%			(11.11)%	⁶


Ratios to Average Net Assets⁷
Total expenses^8,9		0.56%	¹⁰		0.69%			0.91%			3.98%			7.57%	^10,11

Total expenses after fees waived and/or reimbursed^8,9		0.38%	¹⁰		0.40%			0.44%			0.49%			0.49%	¹⁰

Net investment income^8,9		2.26%	¹⁰		2.14%			2.87%			2.60%			1.95%	¹⁰


Supplemental Data
Net assets, end of period (000)	$	12,268		$	8,945		$	4,696		$	129		$	22

Portfolio turnover rate of the LifePath Index Master Portfolio		11%	¹²		22%	¹²		15%	¹²		8%	¹³		0%	^13,14

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁸

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.05%, 0.10%, 0.27%, 1.05% and 3.74% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁹

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,
2011

2014

2013

2012

Investments in underlying funds

0.09%

0.06%

0.05%

0.08%

¹⁰

Annualized.

¹¹

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 7.59%.

¹²

¹³

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 53% and 13% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹⁴

Rounds to less than 1%.


Financial Highlights (concluded)		BlackRock LifePath Index 2055 Fund


	Class K
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	12.60		$	12.05		$	10.05		$	8.80		$	10.00

Net investment income²		0.16			0.30			0.34			0.26			0.12
Net realized and unrealized gain (loss)		0.11			0.60			1.95			1.21			(1.22	)

Net increase (decrease) from investment operations		0.27			0.90			2.29			1.47			(1.10	)

Distributions from:³
Net investment income		(0.12	)		(0.28	)		(0.29	)		(0.22	)		(0.09	)
Net realized gain		(0.00	)⁴		(0.07	)		—			—			—
Return of capital		—			—			—			(0.00	)⁴		(0.01	)

Total distributions		(0.12	)		(0.35	)		(0.29	)		(0.22	)		(0.10	)

Net asset value, end of period	$	12.75		$	12.60		$	12.05		$	10.05		$	8.80


Total Return⁵
Based on net asset value		2.16%	⁶		7.50%			22.95%			16.83%			(10.96)%	⁶


Ratios to Average Net Assets⁷
Total expenses^8,9		0.28%	¹⁰		0.42%			0.70%			3.71%			7.21%	^10,11

Total expenses after fees waived and/or reimbursed^8,9		0.08%	¹⁰		0.10%			0.15%			0.19%			0.21%	¹⁰

Net investment income^8,9		2.52%	¹⁰		2.44%			3.05%			2.71%			2.24%	¹⁰


Supplemental Data
Net assets, end of period (000)	$	56,673		$	45,039		$	18,345		$	4,706		$	1,716

Portfolio turnover rate of the LifePath Index Master Portfolio		11%	¹²		22%	¹²		15%	¹²		8%	¹³		0%	^13,14

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the LifePath Index Fund’s share of its corresponding LifePath Index Master Portfolio’s allocated net expenses and/or net investment income.

⁸

Includes the LifePath Index Fund’s share of the LifePath Index Master Portfolio’s allocated fees waived of 0.05%, 0.10%, 0.28%, 0.18% and 3.74% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁹

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended December 31,

Period
May 31, 2011¹
to December 31,
2011

2014

2013

2012

Investments in underlying funds

0.09%

0.06%

0.05%

0.08%

¹⁰

Annualized.

¹¹

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 7.22%.

¹²

¹³

Excludes the LifePath Index Master Portfolio’s purchases and sales of the Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 53% and 13% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹⁴

Rounds to less than 1%.


Notes to Financial Statements (Unaudited)

1. Organization:

BlackRock Funds III (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust is organized as a Delaware statutory trust. The following, each a series of the Trust, are referred to herein collectively as the “LifePath Index Funds” or individually, a “LifePath Index Fund”:


Fund Name	Herein Referred To As	Diversification Classification
BlackRock LifePath^® Index Retirement Fund	LifePath Index Retirement Fund		Diversified
BlackRock LifePath^® Index 2020 Fund	LifePath Index 2020 Fund		Diversified
BlackRock LifePath^® Index 2025 Fund	LifePath Index 2025 Fund		Diversified
BlackRock LifePath^® Index 2030 Fund	LifePath Index 2030 Fund		Diversified
BlackRock LifePath^® Index 2035 Fund	LifePath Index 2035 Fund		Diversified
BlackRock LifePath^® Index 2040 Fund	LifePath Index 2040 Fund		Diversified
BlackRock LifePath^® Index 2045 Fund	LifePath Index 2045 Fund		Diversified
BlackRock LifePath^® Index 2050 Fund	LifePath Index 2050 Fund		Diversified
BlackRock LifePath^® Index 2055 Fund	LifePath Index 2055 Fund		Diversified

Each LifePath Index Fund seeks to achieve its investment objective by investing all of its assets in a separate series of Master Investment Fund (“MIP”): LifePath^® Index Retirement Master Portfolio, LifePath^® Index 2020 Master Portfolio, LifePath^® Index 2025 Master Portfolio, LifePath^® Index 2030 Master Portfolio, LifePath^® Index 2035 Master Portfolio, LifePath^® Index 2040 Master Portfolio, LifePath^® Index 2045 Master Portfolio, LifePath^® Index 2050 Master Portfolio and LifePath^® Index 2055 Master Portfolio (each, a “LifePath Index Master Portfolio” and collectively, the “LifePath Index Master Portfolios”). Each LifePath Index Master Portfolio has the same or substantially similar investment objective as its corresponding LifePath Index Fund. The performance of a LifePath Index Fund is directly affected by the performance of its corresponding LifePath Index Master Portfolio.

The value of each LifePath Index Fund’s investment in its corresponding LifePath Index Master Portfolio reflects that LifePath Index Fund’s proportionate interest in the net assets of its corresponding LifePath Index Master Portfolio (100.0% for each of the LifePath Index Funds as of June 30, 2015). As such, the financial statements of each corresponding LifePath Index Master Portfolio, including the Schedule of Investments, are included elsewhere in this report and should be read in conjunction with each LifePath Index Fund’s financial statements.

Each LifePath Index Fund offers multiple classes of shares. Institutional, Investor A and Class K Shares are sold without a sales charge. Institutional and Class K Shares are available only to certain eligible investors. All classes of shares have identical voting, dividend, liquidation and other rights and are subject to the same terms and conditions, except that Investor A Shares bear certain expenses related to the shareholder servicing of such shares. Each class has exclusive voting rights with respect to matters relating to its shareholder servicing and distribution expenditures.

Share Class

Initial Sales Charge

CDSC

Conversion Privilege

Institutional and Class K

None

Investor A

None

The LifePath Index Funds, together with certain other registered investment companies advised by BlackRock Fund Advisors (“BFA” or the “Manager”) or its affiliates, are included in a complex of open-end funds referred to as the Equity-Liquidity Complex.

2. Significant Accounting Policies:

The LifePath Index Funds’ 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 and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each LifePath Index Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. The following is a summary of significant accounting policies followed by the LifePath Index Funds:

Valuation: The LifePath Index Funds’ investments are valued at fair value as of the close of trading on the New York Stock Exchange (“NYSE”) (generally 4:00 p.m., Eastern time). U.S. GAAP defines fair value as the price the LifePath Index Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The LifePath Index Funds determine the fair values of each LifePath Index Fund’s financial instruments at market value using independent dealers or pricing services under policies approved by the Board of Trustees of the Trust (the “Board”). 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 provide oversight of the pricing function for the LifePath Index Funds for all financial instruments. The LifePath Index Funds’ policy is to fair value its financial instruments at market value. LifePath Index Funds record their investments in the applicable LifePath Index Master Portfolio at fair value based on the LifePath Index Funds proportionate interest in the net assets of the LifePath Index Master Portfolio. Valuation of securities held by the LifePath Index Master Portfolio is discussed in Note 2 of the LifePath Index Master Portfolio’s Notes to Financial Statements, which are included elsewhere in this report.

Investment Transactions and Investment Income: For financial reporting purposes, contributions to and withdrawals from the LifePath Index Master Portfolio are accounted on a trade date basis. The LifePath Index Funds record daily their proportionate share of the applicable LifePath Index Master Portfolio’s income, expenses and realized and unrealized gains and losses. In addition, the LifePath Index Funds accrue their own expenses. Income,



52	BLACKROCK FUNDS III	JUNE 30, 2015


Notes to Financial Statements (continued)

expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets. Each LifePath Index Master Portfolio records daily its proportionate share of Large Cap Index Master Portfolio, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio income, expenses and realized and unrealized gains and losses.

Other: Expenses directly related to the LifePath Index Funds or their classes are charged to that LifePath Index Fund or the applicable class. 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. Expenses directly related to the LifePath Index Funds and other shared expenses prorated to the LifePath Index Funds are allocated daily to each class based on its relative net assets or other appropriate methods.

3. Administration Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock, Inc. (“BlackRock”) for 1940 Act purposes.

The Trust, on behalf of the LifePath Index Funds, entered into an Administration Agreement with BlackRock Advisors, LLC (“BAL” or the “Administrator”), an indirect, wholly owned subsidiary of BlackRock, to provide general administration services (other than investment advice and related fund activities). For such services, the LifePath Index Funds pay the Administrator a monthly fee at an annual rate of 0.03% of the average daily value of the LifePath Index Fund’s net assets. The LifePath Index Funds do not pay an investment advisory fee or investment management fee.

From time to time, BAL may waive such fees in whole or in part. Any such waiver will reduce the expenses of a LifePath Index Fund and, accordingly, have a favorable impact on its performance. BAL may delegate certain of its administration duties to sub-administrators.

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 LifePath Index Fund’s business. The expense limitations as a percentage of average daily net assets are as follows: 1.10% for Institutional; 1.35% for Investor A, and 1.05% for Class K. This agreement will automatically renew on May 1 of each year for an additional year until May 1, 2025, unless terminated earlier by the Board, including a majority of the Independent Trustees.

In addition, BFA and BAL 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 LifePath Index Fund’s business. A LifePath Index Fund may have to repay some of these waivers and reimbursements to BFA and BAL in the following two years. The agreement may be terminated upon 90 days’ notice by a majority of the non-interested trustees of the Trust or by a vote of majority of the outstanding voting shares of the LifePath Index Fund. The expense limitations as a percentage of average daily net assets until May 1, 2016 are as follows:


	LifePath Index Retirement Fund		LifePath Index 2020 Fund		LifePath Index 2025 Fund		LifePath Index 2030 Fund		LifePath Index 2035 Fund¹		LifePath Index 2040 Fund¹		LifePath Index 2045 Fund¹		LifePath Index 2050 Fund¹		LifePath Index 2055 Fund¹
Institutional		0.10%		0.10%		0.10%		0.10%		0.09%		0.09%		0.08%		0.08%		0.07%
Investor A		0.35%		0.35%		0.35%		0.35%		0.34%		0.34%		0.33%		0.33%		0.32%
Class K		0.05%		0.05%		0.05%		0.05%		0.04%		0.04%		0.03%		0.03%		0.02%

Expense limitations became effective on April 30, 2015. Prior to April 30, 2015, the expense limitations were 0.10% for Institutional, 0.35% for Investor A and 0.05% for Class K.

These amounts waived or reimbursed are included in fees waived by the administrator, and shown as transfer agent fees reimbursed — class specific, in the Statements of Operations. For the six months ended June 30, 2015, the amounts included in transfer agent fees reimbursed for each class were as follows:


LifePath Index Retirement Fund	LifePath Index 2020 Fund		LifePath Index 2025 Fund		LifePath Index 2030 Fund		LifePath Index 2035 Fund		LifePath Index 2040 Fund		LifePath Index 2045 Fund		LifePath Index 2050 Fund		LifePath Index 2055 Fund
$17,545	$	17,515	$	9,840	$	17,291	$	10,356	$	15,519	$	9,716	$	15,357	$	7,932

If during a LifePath Index Fund’s fiscal year the operating expenses of a share class, that at any time during the prior two fiscal years received a waiver or reimbursement from BAL, are less than the expense limit for that share class, BAL is entitled to be reimbursed by such share class up to the lesser of (a) the amount of fees waived or expenses reimbursed during the prior two fiscal years under the agreement and (b) the amount by which the expense limit for that share class exceeds the operating expenses of the share class for the current fiscal year, provided that: (1) the LifePath Index Fund, of which the share class is a part, has more than $50 million in assets for the fiscal year and (2) BAL or an affiliate continues to serve as the LifePath Index Fund’s investment advisor or administrator.



BLACKROCK FUNDS III	JUNE 30, 2015	53


Notes to Financial Statements (continued)

For the six months ended June 30, 2015, BAL recouped the following fund level and class specific waivers and/or reimbursements previously recorded by the LifePath Index Funds:


	BAL
LifePath Index Retirement Fund
Institutional	$	1,112
Investor A	$	3,446
LifePath Index 2020 Fund
Institutional	$	2,233
Investor A	$	4,550
LifePath Index 2025 Fund
Institutional	$	2,661
Investor A	$	4,347
LifePath Index 2030 Fund
Institutional	$	2,568
Investor A	$	5,160
LifePath Index 2035 Fund
Institutional	$	2,390
Investor A	$	4,535
LifePath Index 2040 Fund
Institutional	$	2,246
Investor A	$	2,870
LifePath Index 2045 Fund
Institutional	$	2,808
Investor A	$	1,462
LifePath Index 2050 Fund
Institutional	$	1,760
Investor A	$	467
LifePath Index 2055 Fund
Institutional	$	681
Investor A	$	52

On June 30, 2015, the LifePath Index Fund level and class specific waivers and/or reimbursements subject to possible future recoupment under the expense limitation agreement are as follows:


	Expiring December 31,
	2015		2016		2017
LifePath Index Retirement Fund
Fund level	$	189,439	$	236,881	$	127,932
Institutional		—	$	4,112	$	1,232
Investor A		—		—	$	1,696
Class K	$	40,265	$	38,752	$	15,290
LifePath Index 2020 Fund
Fund level	$	292,083	$	378,914	$	219,046
Institutional		—	$	5,309	$	1,210
Investor A		—	$	4,044	$	2,563
Class K	$	33,435	$	34,471	$	15,040
LifePath Index 2025 Fund
Fund level	$	163,135	$	251,481	$	147,173
Institutional		—	$	1,845	$	296
Investor A		—	$	2,905	$	2,102
Class K	$	15,549	$	18,068	$	8,018
LifePath Index 2030 Fund
Fund level	$	250,300	$	360,380	$	209,892
Institutional		—	$	3,365	$	596
Investor A		—	$	3,592	$	2,324
Class K	$	37,714	$	35,943	$	15,555
LifePath Index 2035 Fund
Fund level	$	127,727	$	217,349	$	124,721
Institutional		—	$	1,495	$	302
Investor A		—	$	1,076	$	2,036
Class K	$	15,042	$	20,255	$	8,406
LifePath Index 2040 Fund
Fund level	$	173,008	$	274,798	$	159,865
Institutional		—	$	1,865	$	321
Investor A		—	$	2,134	$	1,004
Class K	$	29,287	$	35,927	$	14,962



54	BLACKROCK FUNDS III	JUNE 30, 2015


Notes to Financial Statements (continued)


	Expiring December 31,
	2015		2016		2017
LifePath Index 2045 Fund
Fund level	$	90,363	$	161,498	$	91,468
Institutional		—	$	169	$	306
Investor A		—	$	1,843	$	998
Class K	$	14,331	$	21,336	$	8,566
LifePath Index 2050 Fund
Fund level	$	88,935	$	167,905	$	96,858
Institutional		—	$	1,309	$	180
Investor A	$	49	$	3,247	$	795
Class K	$	26,822	$	35,911	$	14,785
LifePath Index 2055 Fund
Fund level	$	67,183	$	104,536	$	59,324
Institutional		—	$	1,426	$	189
Investor A	$	270	$	1,708	$	413
Class K	$	8,027	$	17,946	$	7,441

The Trust, on behalf of the LifePath Index Funds, entered into a Distribution Agreement and an Investor A Shares Distribution Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of BlackRock. Pursuant to the Investor A Shares Distribution Plan and in accordance with Rule 12b-1 under the 1940 Act, each LifePath Index Fund pays BRIL ongoing service fees with respect to Investor A Shares. The fees are accrued daily and paid monthly at annual rates of 0.25% based upon the average daily net assets of the Investor A Shares.

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

Pursuant to written agreements, certain financial intermediaries, some of which may be affiliates, provide the LifePath Index Funds with sub-accounting, recordkeeping, sub-transfer agency and other administrative services with respect to sub-accounts they service. 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 June 30, 2015, the LifePath Index Funds paid the following amounts to affiliates of BlackRock in return for these services, which are included in transfer agent — class specific in the Statements of Operations:


	Institutional		Investor A
LifePath Index Retirement Fund	$	17,367	$	12,760
LifePath Index 2020 Fund	$	20,679	$	27,127
LifePath Index 2025 Fund	$	13,593	$	20,782
LifePath Index 2030 Fund	$	18,591	$	29,610
LifePath Index 2035 Fund	$	8,996	$	18,605
LifePath Index 2040 Fund	$	12,211	$	15,978
LifePath Index 2045 Fund	$	6,423	$	7,854
LifePath Index 2050 Fund	$	5,959	$	5,841
LifePath Index 2055 Fund	$	1,834	$	2,058

The Administrator maintains a call center, which is responsible for providing certain shareholder services to the LifePath Index Funds, such as responding to shareholder inquiries and processing transactions based upon instructions from shareholders with respect to the subscription and redemption of the LifePath Index Fund shares. For the six months ended June 30, 2015, each LifePath Index Fund reimbursed the Administrator the following amounts for costs incurred in running the call center, which are included in transfer agent — class specific in the Statements of Operations:


	Institutional		Investor A		Class K
LifePath Index Retirement Fund	$	100	$	153	$	551
LifePath Index 2020 Fund	$	120	$	301	$	1,075
LifePath Index 2025 Fund	$	94	$	285	$	429
LifePath Index 2030 Fund	$	113	$	315	$	1,001
LifePath Index 2035 Fund	$	66	$	240	$	369
LifePath Index 2040 Fund	$	102	$	218	$	815
LifePath Index 2045 Fund	$	77	$	178	$	229
LifePath Index 2050 Fund	$	94	$	136	$	497
LifePath Index 2055 Fund	$	48	$	116	$	88

Certain officers and/or trustees of the Trust are officers and/or directors of BlackRock or its affiliates. The LifePath Index Funds reimburse the Manager for a portion of the compensation paid to the Trust’s Chief Compliance Officer, which is included in independent trustees in the Statements of Operations.



BLACKROCK FUNDS III	JUNE 30, 2015	55


Notes to Financial Statements (continued)

4. Income Tax Information:

It is the LifePath Index Funds’ 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 their taxable income to their shareholders. Therefore, no federal income tax provision is required.

The LifePath Index Funds file U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the LifePath Index Funds’ U.S. federal tax returns remains open for each of the four years ended December 31, 2014. The statutes of limitations on the LifePath Index Funds 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 LifePath Index Funds as of June 30, 2015, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the LifePath Index Funds’ financial statements.

5. Capital Share Transactions:

Transactions in capital shares for each class were as follows:


	Six Months Ended June 30, 2015						Year Ended December 31, 2014
LifePath Index Retirement Fund	Shares			Amount			Shares			Amount
Institutional
Shares sold		1,576,167		$	17,988,085			3,680,315		$	41,628,878
Shares issued to shareholders in reinvestment of distributions		60,648			692,280			161,743			1,834,869
Shares redeemed		(1,657,250	)		(19,070,178	)		(1,409,237	)		(15,988,870	)

Net increase (decrease)		(20,435	)	$	(389,813	)		2,432,821		$	27,474,877


Investor A
Shares sold		2,544,898		$	29,092,424			3,144,759		$	35,707,200
Shares issued to shareholders in reinvestment of distributions		51,503			587,457			113,626			1,288,110
Shares redeemed		(1,352,355	)		(15,550,410	)		(943,159	)		(10,647,862	)

Net increase		1,244,046		$	14,129,471			2,315,226		$	26,347,448


Class K
Shares sold		5,864,391		$	67,404,158			10,318,651		$	116,653,376
Shares issued to shareholders in reinvestment of distributions		297,187			3,390,442			797,307			9,041,203
Shares redeemed		(3,703,778	)		(42,648,302	)		(6,882,045	)		(77,717,842	)

Net increase		2,457,800		$	28,146,298			4,233,913		$	47,976,737

Total Net Increase		3,681,411		$	41,885,956			8,981,960		$	101,799,062


LifePath Index 2020 Fund
Institutional
Shares sold		2,826,893		$	32,972,631			4,344,770		$	49,739,175
Shares issued to shareholders in reinvestment of distributions		73,135			854,324			193,240			2,237,224
Shares redeemed		(2,566,597	)		(30,250,628	)		(1,270,121	)		(14,589,341	)

Net increase		333,431		$	3,576,327			3,267,889		$	37,387,058


Investor A
Shares sold		3,621,321		$	42,085,115			4,963,332		$	57,313,622
Shares issued to shareholders in reinvestment of distributions		95,866			1,117,588			218,196			2,522,414
Shares redeemed		(1,133,294	)		(13,356,416	)		(2,063,570	)		(23,746,201	)

Net increase		2,583,893		$	29,846,287			3,117,958		$	36,089,835


Class K
Shares sold		14,030,337		$	165,083,877			21,822,723		$	251,347,326
Shares issued to shareholders in reinvestment of distributions		693,081			8,094,501			1,759,878			20,376,195
Shares redeemed		(5,163,689	)		(60,931,568	)		(8,577,771	)		(98,889,539	)

Net increase		9,559,729		$	112,246,810			15,004,830		$	172,833,982

Total Net Increase		12,477,053		$	145,669,424			21,390,677		$	246,310,875



56	BLACKROCK FUNDS III	JUNE 30, 2015


Notes to Financial Statements (continued)


	Six Months Ended June 30, 2015						Year Ended December 31, 2014
LifePath Index 2025 Fund	Shares			Amount			Shares			Amount
Institutional
Shares sold		2,614,360		$	30,917,864			3,451,831		$	40,074,916
Shares issued to shareholders in reinvestment of distributions		49,413			587,380			114,546			1,344,727
Shares redeemed		(1,766,964	)		(21,226,141	)		(843,810	)		(9,833,029	)

Net increase		896,809		$	10,279,103			2,722,567		$	31,586,614


Investor A
Shares sold		2,044,678		$	24,383,292			4,393,893		$	51,408,558
Shares issued to shareholders in reinvestment of distributions		68,492			812,711			176,444			2,069,805
Shares redeemed		(998,490	)		(11,975,451	)		(1,233,065	)		(14,379,037	)

Net increase		1,114,680		$	13,220,552			3,337,272		$	39,099,326


Class K
Shares sold		8,939,900		$	106,980,623			15,841,657		$	184,774,389
Shares issued to shareholders in reinvestment of distributions		361,568			4,295,979			817,457			9,602,335
Shares redeemed		(2,245,537	)		(27,005,684	)		(3,099,720	)		(36,255,819	)

Net increase		7,055,931		$	84,270,918			13,559,394		$	158,120,905

Total Net Increase		9,067,420		$	107,770,573			19,619,233		$	228,806,845


LifePath Index 2030 Fund
Institutional
Shares sold		2,463,005		$	29,461,224			4,296,619		$	50,359,784
Shares issued to shareholders in reinvestment of distributions		66,500			798,783			172,177			2,043,207
Shares redeemed		(1,858,323	)		(22,647,425	)		(1,090,427	)		(12,831,665	)

Net increase		671,182		$	7,612,582			3,378,369		$	39,571,326


Investor A
Shares sold		3,696,346		$	44,019,318			5,239,806		$	61,954,488
Shares issued to shareholders in reinvestment of distributions		99,244			1,191,131			245,328			2,909,916
Shares redeemed		(1,214,779	)		(14,730,843	)		(1,530,517	)		(18,097,416	)

Net increase		2,580,811		$	30,479,606			3,954,617		$	46,766,988


Class K
Shares sold		13,599,614		$	164,681,942			20,550,362		$	242,092,570
Shares issued to shareholders in reinvestment of distributions		608,096			7,295,853			1,569,510			18,605,392
Shares redeemed		(3,452,945	)		(41,924,540	)		(6,426,671	)		(75,960,707	)

Net increase		10,754,765		$	130,053,255			15,693,201		$	184,737,255

Total Net Increase		14,006,758		$	168,145,443			23,026,187		$	271,075,569


LifePath Index 2035 Fund
Institutional
Shares sold		1,764,587		$	21,329,798			2,631,466		$	31,076,921
Shares issued to shareholders in reinvestment of distributions		35,953			437,514			76,492			916,573
Shares redeemed		(1,066,121	)		(13,190,369	)		(530,896	)		(6,296,111	)

Net increase		734,419		$	8,576,943			2,177,062		$	25,697,383


Investor A
Shares sold		1,639,453		$	19,957,899			4,907,537		$	58,434,539
Shares issued to shareholders in reinvestment of distributions		64,992			788,178			159,130			1,903,367
Shares redeemed		(771,991	)		(9,437,944	)		(1,376,664	)		(16,362,815	)

Net increase		932,454		$	11,308,133			3,690,003		$	43,975,091



BLACKROCK FUNDS III	JUNE 30, 2015	57


Notes to Financial Statements (continued)


	Six Months Ended June 30, 2015						Year Ended December 31, 2014
LifePath Index 2035 Fund (concluded)	Shares			Amount			Shares			Amount
Class K
Shares sold		5,974,801		$	73,119,286			11,510,397		$	136,714,611
Shares issued to shareholders in reinvestment of distributions		274,567			3,335,658			628,820			7,529,364
Shares redeemed		(1,750,922	)		(21,600,322	)		(1,681,236	)		(20,062,135	)

Net increase		4,498,446		$	54,854,622			10,457,981		$	124,181,840

Total Net Increase		6,165,319		$	74,739,698			16,325,046		$	193,854,314


LifePath Index 2040 Fund
Institutional
Shares sold		1,835,087		$	22,498,890			3,174,100		$	37,944,455
Shares issued to shareholders in reinvestment of distributions		48,723			598,809			111,639			1,352,455
Shares redeemed		(1,111,246	)		(13,919,457	)		(805,573	)		(9,703,017	)

Net increase		772,564		$	9,178,242			2,480,166		$	29,593,893


Investor A
Shares sold		2,446,692		$	29,671,525			2,806,932		$	33,761,979
Shares issued to shareholders in reinvestment of distributions		57,302			703,122			125,531			1,518,489
Shares redeemed		(664,861	)		(8,262,811	)		(775,110	)		(9,342,082	)

Net increase		1,839,133		$	22,111,836			2,157,353		$	25,938,386


Class K
Shares sold		9,588,173		$	118,950,807			16,070,240		$	193,551,976
Shares issued to shareholders in reinvestment of distributions		426,625			5,242,062			1,016,216			12,303,154
Shares redeemed		(2,812,972	)		(35,102,413	)		(4,518,856	)		(54,454,035	)

Net increase		7,201,826		$	89,090,456			12,567,600		$	151,401,095

Total Net Increase		9,813,523		$	120,380,534			17,205,119		$	206,933,374


LifePath Index 2045 Fund
Institutional
Shares sold		1,546,013		$	19,123,635			2,193,560		$	26,589,302
Shares issued to shareholders in reinvestment of distributions		31,657			393,961			49,880			610,784
Shares redeemed		(710,080	)		(9,041,603	)		(309,729	)		(3,769,663	)

Net increase		867,590		$	10,475,993			1,933,711		$	23,430,423


Investor A
Shares sold		1,061,758		$	13,271,451			1,838,204		$	22,364,142
Shares issued to shareholders in reinvestment of distributions		28,689			356,416			61,245			748,510
Shares redeemed		(411,223	)		(5,181,398	)		(527,081	)		(6,393,801	)

Net increase		679,224		$	8,446,469			1,372,368		$	16,718,851


Class K
Shares sold		3,632,219		$	45,655,980			7,172,251		$	86,831,243
Shares issued to shareholders in reinvestment of distributions		158,791			1,977,040			333,676			4,085,944
Shares redeemed		(1,207,651	)		(15,321,984	)		(1,176,328	)		(14,337,223	)

Net increase		2,583,359		$	32,311,036			6,329,599		$	76,579,964

Total Net Increase		4,130,173		$	51,233,498			9,635,678		$	116,729,238


LifePath Index 2050 Fund
Institutional
Shares sold		1,770,532		$	22,293,585			1,612,987		$	19,820,608
Shares issued to shareholders in reinvestment of distributions		27,003			340,519			44,843			555,638
Shares redeemed		(921,605	)		(11,817,224	)		(319,364	)		(3,930,861	)

Net increase		875,930		$	10,816,880			1,338,466		$	16,445,385



58	BLACKROCK FUNDS III	JUNE 30, 2015


Notes to Financial Statements (concluded)


	Six Months Ended June 30, 2015						Year Ended December 31, 2014
LifePath Index 2050 Fund (concluded)	Shares			Amount			Shares			Amount
Investor A
Shares sold		949,620		$	11,905,120			1,256,520		$	15,457,000
Shares issued to shareholders in reinvestment of distributions		19,877			250,237			43,657			540,292
Shares redeemed		(319,402	)		(4,059,603	)		(538,221	)		(6,623,380	)

Net increase		650,095		$	8,095,754			761,956		$	9,373,912


Class K
Shares sold		5,435,772		$	69,199,328			9,378,798		$	115,111,348
Shares issued to shareholders in reinvestment of distributions		179,208			2,260,089			345,755			4,283,737
Shares redeemed		(2,207,436	)		(28,358,437	)		(1,770,664	)		(21,789,910	)

Net increase		3,407,544		$	43,100,980			7,953,889		$	97,605,175

Total Net Increase		4,933,569		$	62,013,614			10,054,311		$	123,424,472


LifePath Index 2055 Fund
Institutional
Shares sold		845,023		$	10,828,332			675,790		$	8,495,924
Shares issued to shareholders in reinvestment of distributions		10,835			138,781			11,760			148,088
Shares redeemed		(269,698	)		(3,526,626	)		(136,992	)		(1,726,858	)

Net increase		586,160		$	7,440,487			550,558		$	6,917,154


Investor A
Shares sold		352,751		$	4,555,866			400,459		$	4,995,206
Shares issued to shareholders in reinvestment of distributions		7,297			93,296			14,457			181,549
Shares redeemed		(107,438	)		(1,394,172	)		(94,087	)		(1,171,515	)

Net increase		252,610		$	3,254,990			320,829		$	4,005,240


Class K
Shares sold		1,603,320		$	20,789,835			2,641,658		$	32,875,468
Shares issued to shareholders in reinvestment of distributions		41,604			532,881			75,550			950,127
Shares redeemed		(774,725	)		(10,179,474	)		(664,905	)		(8,277,442	)

Net increase		870,199		$	11,143,242			2,052,303		$	25,548,153

Total Net Increase		1,708,969		$	21,838,719			2,923,690		$	36,470,547

6. Subsequent Events:

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



BLACKROCK FUNDS III	JUNE 30, 2015	59


Master Portfolio Information as of June 30, 2015		Master Investment Portfolio


LifePath^® Index Retirement Master Portfolio


Portfolio Composition		Percent of Affiliated Investment Companies


Fixed Income Funds	56	%
Equity Funds	44


Ten Largest Holdings		Percent of Affiliated Investment Companies


U.S. Total Bond Index Master Portfolio	51	%
Large Cap Index Master Portfolio	23
Total International ex U.S. Index Master Portfolio	9
Master Small Cap Index Series	4
iShares Core MSCI Total International Stock ETF	3
iShares MSCI EAFE Small-Cap ETF	1


LifePath^® Index 2020 Master Portfolio


Portfolio Composition		Percent of Affiliated Investment Companies


Equity Funds	56	%
Fixed Income Funds	44


Ten Largest Holdings		Percent of Affiliated Investment Companies


U.S. Total Bond Index Master Portfolio	41	%
Large Cap Index Master Portfolio	29
Total International ex U.S. Index Master Portfolio	12
iShares Core MSCI Total International Stock ETF	3
Master Small Cap Index Series	3
iShares Cohen & Steers REIT ETF	2
iShares International Developed Real Estate ETF	2
iShares MSCI EAFE Small-Cap ETF	1


LifePath^® Index 2025 Master Portfolio


Portfolio Composition		Percent of Affiliated Investment Companies


Equity Funds	67	%
Fixed Income Funds	33


Ten Largest Holdings		Percent of Affiliated Investment Companies


Large Cap Index Master Portfolio	35	%
U.S. Total Bond Index Master Portfolio	31
Total International ex U.S. Index Master Portfolio	13
iShares Core MSCI Total International Stock ETF	6
Master Small Cap Index Series	3
iShares Cohen & Steers REIT ETF	3
iShares International Developed Real Estate ETF	3
iShares MSCI EAFE Small-Cap ETF	1

The LifePath Index Master Portfolios’ allocation and holdings listed above are current as of the report date. However, the LifePath Index Master Portfolios are regularly monitored and their composition may vary throughout various periods.



60	BLACKROCK FUNDS III	JUNE 30, 2015


Master Portfolio Information as of June 30, 2015 (continued)		Master Investment Portfolio


LifePath^® Index 2030 Master Portfolio


Portfolio Composition		Percent of Affiliated Investment Companies


Equity Funds	77	%
Fixed Income Funds	23


Ten Largest Holdings		Percent of Affiliated Investment Companies


Large Cap Index Master Portfolio	40	%
U.S. Total Bond Index Master Portfolio	22
Total International ex U.S. Index Master Portfolio	16
iShares Core MSCI Total International Stock ETF	5
iShares Cohen & Steers REIT ETF	4
iShares International Developed Real Estate ETF	4
Master Small Cap Index Series	3
iShares MSCI EAFE Small-Cap ETF	2


LifePath^® Index 2035 Master Portfolio


Portfolio Composition		Percent of Affiliated Investment Companies


Equity Funds	86	%
Fixed Income Funds	14


Ten Largest Holdings		Percent of Affiliated Investment Companies


Large Cap Index Master Portfolio	46	%
Total International ex U.S. Index Master Portfolio	17
U.S. Total Bond Index Master Portfolio	13
iShares Core MSCI Total International Stock ETF	8
iShares Cohen & Steers REIT ETF	5
iShares International Developed Real Estate ETF	5
Master Small Cap Index Series	2
iShares MSCI EAFE Small-Cap ETF	2


LifePath^® Index 2040 Master Portfolio


Portfolio Composition		Percent of Affiliated Investment Companies


Equity Funds	94	%
Fixed Income Funds	6


Ten Largest Holdings		Percent of Affiliated Investment Companies


Large Cap Index Master Portfolio	50	%
Total International ex U.S. Index Master Portfolio	20
iShares Cohen & Steers REIT ETF	7
iShares Core MSCI Total International Stock ETF	7
iShares International Developed Real Estate ETF	6
U.S. Total Bond Index Master Portfolio	6
Master Small Cap Index Series	2
iShares MSCI EAFE Small-Cap ETF	2



BLACKROCK FUNDS III	JUNE 30, 2015	61


Master Portfolio Information as of June 30, 2015 (concluded)		Master Investment Portfolio


LifePath^® Index 2045 Master Portfolio


Portfolio Composition		Percent of Affiliated Investment Companies


Equity Funds	98	%
Fixed Income Funds	2


Ten Largest Holdings		Percent of Affiliated Investment Companies


Large Cap Index Master Portfolio	52	%
Total International ex U.S. Index Master Portfolio	18
iShares Core MSCI Total International Stock ETF	10
iShares Cohen & Steers REIT ETF	7
iShares International Developed Real Estate ETF	7
Master Small Cap Index Series	2
iShares MSCI EAFE Small-Cap ETF	2
U.S. Total Bond Index Master Portfolio	2


LifePath^® Index 2050 Master Portfolio


Portfolio Composition		Percent of Affiliated Investment Companies


Equity Funds	99	%
Fixed Income Funds	1


Ten Largest Holdings		Percent of Affiliated Investment Companies


Large Cap Index Master Portfolio	52	%
Total International ex U.S. Index Master Portfolio	18
iShares Core MSCI Total International Stock ETF	10
iShares Cohen & Steers REIT ETF	8
iShares International Developed Real Estate ETF	7
Master Small Cap Index Series	2
iShares MSCI EAFE Small-Cap ETF	2
U.S. Total Bond Index Master Portfolio	1


LifePath^® Index 2055 Master Portfolio


Portfolio Composition		Percent of Affiliated Investment Companies


Equity Funds	93	%
Fixed Income Funds	1
Short-Term Securities	6


Ten Largest Holdings		Percent of Affiliated Investment Companies


Large Cap Index Master Portfolio	49	%
Total International ex U.S. Index Master Portfolio	14
iShares Core MSCI Total International Stock ETF	13
iShares Cohen & Steers REIT ETF	7
iShares International Developed Real Estate ETF	6
BlackRock Cash Funds: Prime, SL Agency Shares	5
Master Small Cap Index Series	2
iShares MSCI EAFE Small-Cap ETF	2
U.S. Total Bond Index Master Portfolio	1
BlackRock Cash Funds: Institutional, SL Agency Shares	1



62	BLACKROCK FUNDS III	JUNE 30, 2015

Schedule of Investments June 30, 2015 (Unaudited)

LifePath Index Retirement Master Portfolio

(Percentages shown are based on Net Assets)


Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Equity Funds — 39.8%
iShares Cohen & Steers REIT ETF		15,392	$	1,379,277
iShares Core MSCI Total International Stock ETF		281,280		15,501,341
iShares International Developed Real Estate ETF		42,956		1,277,511
iShares MSCI EAFE Small-Cap ETF		78,979		4,029,508
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	106,792,216		106,792,216
Master Small Cap Index Series	$	17,917,350		17,917,350
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)	$	42,055,093		42,055,093

				188,952,296
Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Fixed Income Funds — 59.7%
iShares TIPS Bond ETF		365,174	$	40,917,747
U.S. Total Bond Index Master Portfolio (fka Bond Index Master Portfolio)	$	241,977,655		241,977,655

				282,895,402
Short-Term Securities — 0.1%
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (b)		310,864		310,864
Total Affiliated Investment Companies (Cost — $442,028,682) — 99.6%				472,158,562
Other Assets Less Liabilities — 0.4%				1,931,691

Net Assets — 100.0%			$	474,090,253

Notes to Schedule of Investments

(a)

During the six months ended June 30, 2015, investments in issuers considered to be affiliates of LifePath Index Master Portfolio for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


Affiliate	Shares/ Beneficial Interest Held at December 31, 2014		Shares/ Beneficial Interest Purchased			Shares/ Beneficial Interest Sold			Shares/ Beneficial Interest Held at June 30, 2015		Value at June 30, 2015		Net Income			Realized Gain (Loss)
BlackRock Cash Funds: Institutional, SL Agency Shares		984,033		—			(673,169	)¹		310,864	$	310,864	$	767			—
BlackRock Cash Funds: Prime, SL Agency Shares²		—		—			—			—		—	$	2,769	³		—
iShares Cohen & Steers REIT ETF		12,463		3,305			(376	)		15,392	$	1,379,277	$	22,090		$	5,872
iShares Core MSCI Total International Stock ETF		252,688		41,782			(13,190	)		281,280	$	15,501,341	$	216,250		$	(8,962	)
iShares International Developed Real Estate ETF		34,882		9,322			(1,248	)		42,956	$	1,277,511	$	28,458		$	(3,113	)
iShares MSCI EAFE Small-Cap ETF		107,873		14,306			(43,200	)		78,979	$	4,029,508	$	47,534		$	331,066
iShares TIPS Bond ETF		342,094		48,488			(25,408	)		365,174	$	40,917,747		—		$	(198,530	)
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	98,004,312	$	8,787,904	⁴		—		$	106,792,216	$	106,792,216	$	977,197		$	769,685
Master Small Cap Index Series	$	16,529,780	$	1,387,570	⁴		—		$	17,917,350	$	17,917,350	$	112,862		$	598,482
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)	$	35,792,647	$	6,262,446	⁴		—		$	42,055,093	$	42,055,093	$	714,964		$	113,280
U.S. Total Bond Index Master Portfolio (fka Bond Index Master Portfolio)	$	221,316,244	$	20,661,411	⁴		—		$	241,977,655	$	241,977,655	$	2,178,061		$	318,692
¹ Represents net shares/beneficial interest sold.
² No longer held by LifePath Index Master Portfolio as of report date.
³ Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.
⁴ Represents net shares/beneficial interest purchased.

(b)

Represents the current yield as of report date.

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that LifePath Index Master Portfolio has the ability to access

•

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including LifePath Index Master Portfolio’s own assumptions used in determining the fair value of investments)

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with LifePath Index Master Portfolio’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. For information about LifePath Index Master Portfolio’s policy regarding valuation of investments, refer to Note 2 of the Notes to Financial Statements.

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	63


Schedule of Investments (concluded)		LifePath Index Retirement Master Portfolio

As of June 30, 2015, the following table summarizes LifePath Index Master Portfolio’s investments categorized in the disclosure hierarchy:


	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Affiliated Investment Companies	$	63,416,248	$	408,742,314		—	$	472,158,562

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



64	BLACKROCK FUNDS III	JUNE 30, 2015

Schedule of Investments June 30, 2015 (Unaudited)

LifePath Index 2020 Master Portfolio

(Percentages shown are based on Net Assets)


Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Equity Funds — 52.5%
iShares Cohen & Steers REIT ETF		193,558	$	17,344,733
iShares Core MSCI Total International Stock ETF		636,648		35,085,671
iShares International Developed Real Estate ETF		534,022		15,881,814
iShares MSCI EAFE Small-Cap ETF		221,959		11,324,348
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	298,624,833		298,624,833
Master Small Cap Index Series	$	34,645,511		34,645,511
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)	$	127,808,841		127,808,841

				540,715,751
Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Fixed Income Funds — 47.3%
iShares TIPS Bond ETF (b)		615,550	$	68,972,378
U.S. Total Bond Index Master Portfolio (fka Bond Index Master Portfolio)	$	417,928,079		417,928,079

				486,900,457
Short-Term Securities — 0.2%
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (c)		1,486,269		1,486,269
BlackRock Cash Funds: Prime, SL Agency Shares, 0.13% (c)(d)		263,580		263,580

				1,749,849
Total Affiliated Investment Companies (Cost — $957,774,176) — 100.0%				1,029,366,057
Other Assets Less Liabilities — 0.0%				337,729

Net Assets — 100.0%			$	1,029,703,786

Notes to Schedule of Investments

(a)


Affiliate	Shares/ Beneficial Interest Held at December 31, 2014		Shares/ Beneficial Interest Purchased			Shares/ Beneficial Interest Sold			Shares/ Beneficial Interest Held at June 30, 2015		Value at June 30, 2015		Net Income			Realized Gain (Loss)
BlackRock Cash Funds: Institutional, SL Agency Shares		2,109,818		—			(623,549	)¹		1,486,269	$	1,486,269	$	1,943			—
BlackRock Cash Funds: Prime, SL Agency Shares		1,079,100		—			(815,520	)¹		263,580	$	263,580	$	7,448	²		—
iShares Cohen & Steers REIT ETF		170,731		34,290			(11,463	)		193,558	$	17,344,733	$	271,053		$	220,861
iShares Core MSCI Total International Stock ETF		607,955		79,150			(50,457	)		636,648	$	35,085,671	$	499,017		$	(47,643	)
iShares International Developed Real Estate ETF		473,539		79,715			(19,232	)		534,022	$	15,881,814	$	351,014		$	(39,670	)
iShares MSCI EAFE Small-Cap ETF		288,452		46,917			(113,410	)		221,959	$	11,324,348	$	133,588		$	707,950
iShares TIPS Bond ETF		517,118		122,935			(24,503	)		615,550	$	68,972,378		—		$	(183,847	)
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	264,872,726	$	33,752,107	³		—		$	298,624,833	$	298,624,833	$	2,737,466		$	2,153,691
Master Small Cap Index Series	$	29,854,120	$	4,791,391	³		—		$	34,645,511	$	34,645,511	$	212,600		$	1,133,948
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)	$	100,829,252	$	26,979,589	³		—		$	127,808,841	$	127,808,841	$	2,091,519		$	327,202
U.S. Total Bond Index Master Portfolio (fka Bond Index Master Portfolio)	$	349,364,622	$	68,563,457	³		—		$	417,928,079	$	417,928,079	$	3,609,246		$	484,375
¹ Represents net shares/beneficial interest sold.
² Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.
³ Represents net shares/beneficial interest purchased.

(b)

Security, or a portion of security, is on loan.

(c)

Represents the current yield as of report date.

(d)

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

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that LifePath Index Master Portfolio has the ability to access

•

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	65


Schedule of Investments (concluded)		LifePath Index 2020 Master Portfolio

As of June 30, 2015, the following table summarizes LifePath Index Master Portfolio’s investments categorized in the disclosure hierarchy:


	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Affiliated Investment Companies	$	150,358,793	$	879,007,264		—	$	1,029,366,057

LifePath Index Master Portfolio may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of June 30, 2015, collateral on securities loaned at value of $263,580 is categorized as Level 2 within the disclosure hierarchy.

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



66	BLACKROCK FUNDS III	JUNE 30, 2015

Schedule of Investments June 30, 2015 (Unaudited)

LifePath Index 2025 Master Portfolio

(Percentages shown are based on Net Assets)


Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Equity Funds — 63.4%
iShares Cohen & Steers REIT ETF		208,596	$	18,692,287
iShares Core MSCI Total International Stock ETF		691,398		38,102,945
iShares International Developed Real Estate ETF		576,304		17,139,281
iShares MSCI EAFE Small-Cap ETF		161,330		8,231,057
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	218,844,607		218,844,607
Master Small Cap Index Series	$	18,834,372		18,834,372
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)	$	78,947,994		78,947,994

				398,792,543
Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Fixed Income Funds — 36.2%
iShares TIPS Bond ETF		282,459	$	31,649,531
U.S. Total Bond Index Master Portfolio (fka Bond Index Master Portfolio)	$	195,810,627		195,810,627

				227,460,158
Short-Term Securities — 0.2%
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (b)		1,523,727		1,523,727
Total Affiliated Investment Companies (Cost — $590,942,734) — 99.8%				627,776,428
Other Assets Less Liabilities — 0.2%				1,037,284

Net Assets — 100.0%			$	628,813,712

Notes to Schedule of Investments

(a)


Affiliate	Shares/ Beneficial Interest Held at December 31, 2014		Shares/ Beneficial Interest Purchased			Shares/ Beneficial Interest Sold			Shares/ Beneficial Interest Held at June 30, 2015		Value at June 30, 2015		Net Income			Realized Gain (Loss)
BlackRock Cash Funds: Institutional, SL Agency Shares		746,905		776,822	¹		—			1,523,727	$	1,523,727	$	1,247			—
BlackRock Cash Funds: Prime, SL Agency Shares²		—		—			—			—		—	$	12,455	³		—
iShares Cohen & Steers REIT ETF		169,929		53,369			(14,702	)		208,596	$	18,692,287	$	284,580		$	283,786
iShares Core MSCI Total International Stock ETF		639,667		83,957			(32,226	)		691,398	$	38,102,945	$	546,712		$	(32,355	)
iShares International Developed Real Estate ETF		471,056		134,985			(29,737	)		576,304	$	17,139,281	$	372,045		$	(65,071	)
iShares MSCI EAFE Small-Cap ETF		202,339		37,391			(78,400	)		161,330	$	8,231,057	$	97,098		$	354,650
iShares TIPS Bond ETF		224,311		70,347			(12,199	)		282,459	$	31,649,531		—		$	(81,603	)
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	186,587,207	$	32,257,400	¹		—		$	218,844,607	$	218,844,607	$	1,978,485		$	1,549,042
Master Small Cap Index Series	$	15,639,897	$	3,194,475	¹		—		$	18,834,372	$	18,834,372	$	112,189		$	604,132
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)	$	59,342,333	$	19,605,661	¹		—		$	78,947,994	$	78,947,994	$	1,311,911		$	201,781
U.S. Total Bond Index Master Portfolio (fka Bond Index Master Portfolio)	$	156,945,766	$	38,864,861	¹		—		$	195,810,627	$	195,810,627	$	1,661,611		$	217,386
¹ Represents net shares/beneficial interest purchased.
² No longer held by LifePath Index Master Portfolio as of report date.
³ Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.

(b)

Represents the current yield as of report date.

(c)

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

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that LifePath Index Master Portfolio has the ability to access

•

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	67


Schedule of Investments (concluded)		LifePath Index 2025 Master Portfolio

As of June 30, 2015, the following table summarizes LifePath Index Master Portfolio’s investments categorized in the disclosure hierarchy:


	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Affiliated Investment Companies	$	115,338,828	$	512,437,600		—	$	627,776,428

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



68	BLACKROCK FUNDS III	JUNE 30, 2015

Schedule of Investments June 30, 2015 (Unaudited)

LifePath Index 2030 Master Portfolio

(Percentages shown are based on Net Assets)


Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Equity Funds — 74.3%
iShares Cohen & Steers REIT ETF		469,938	$	42,111,144
iShares Core MSCI Total International Stock ETF		905,981		49,928,613
iShares International Developed Real Estate ETF		1,287,510		38,290,547
iShares MSCI EAFE Small-Cap ETF		305,325		15,577,682
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	400,993,801		400,993,801
Master Small Cap Index Series	$	26,058,310		26,058,310
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)	$	163,707,036		163,707,036

				736,667,133
Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Fixed Income Funds — 25.3%
iShares TIPS Bond ETF		298,216	$	33,415,103
U.S. Total Bond Index Master Portfolio (fka Bond Index Master Portfolio)	$	217,475,093		217,475,093

				250,890,196
Short-Term Securities — 0.2%
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (b)		2,214,915		2,214,915
Total Affiliated Investment Companies (Cost — $913,565,822) — 99.8%				989,772,244
Other Assets Less Liabilities — 0.2%				2,098,451

Net Assets — 100.0%			$	991,870,695

Notes to Schedule of Investments

(a)


Affiliate	Shares/ Beneficial Interest Held at December 31, 2014		Shares/ Beneficial Interest Purchased			Shares/ Beneficial Interest Sold			Shares/ Beneficial Interest Held at June 30, 2015		Value at June 30, 2015		Net Income			Realized Gain (Loss)
BlackRock Cash Funds: Institutional, SL Agency Shares		1,973,808		241,107	¹		—			2,214,915	$	2,214,915	$	2,113			—
BlackRock Cash Funds: Prime, SL Agency Shares²		—		—			—			—		—	$	5,779	³		—
iShares Cohen & Steers REIT ETF		372,716		126,132			(28,910	)		469,938	$	42,111,144	$	629,494		$	589,503
iShares Core MSCI Total International Stock ETF		805,065		148,638			(47,722	)		905,981	$	49,928,613	$	705,961		$	(49,195	)
iShares International Developed Real Estate ETF		1,033,666		310,172			(56,328	)		1,287,510	$	38,290,547	$	823,211		$	(131,575	)
iShares MSCI EAFE Small-Cap ETF		368,703		64,322			(127,700	)		305,325	$	15,577,682	$	183,763		$	651,125
iShares TIPS Bond ETF		230,520		76,617			(8,921	)		298,216	$	33,415,103		—		$	(56,973	)
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	342,118,889	$	58,874,912	¹		—		$	400,993,801	$	400,993,801	$	3,598,844		$	2,816,183
Master Small Cap Index Series	$	21,723,664	$	4,334,646	¹		—		$	26,058,310	$	26,058,310	$	153,284		$	823,412
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)	$	126,495,470	$	37,211,566	¹		—		$	163,707,036	$	163,707,036	$	2,704,144		$	413,960
U.S. Total Bond Index Master Portfolio (fka Bond Index Master Portfolio)	$	173,164,163	$	44,310,930	¹		—		$	217,475,093	$	217,475,093	$	1,824,632		$	230,178
¹ Represents net shares/beneficial interest purchased.
² No longer held by LifePath Index Master Portfolio as of report date.
³ Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.

(b)

Represents the current yield as of report date.

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that LifePath Index Master Portfolio has the ability to access

•

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	69


Schedule of Investments (concluded)		LifePath Index 2030 Master Portfolio

As of June 30, 2015, the following table summarizes LifePath Index Master Portfolio’s investments categorized in the disclosure hierarchy:


	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Affiliated Investment Companies	$	181,538,004	$	808,234,240		—	$	989,772,244

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



70	BLACKROCK FUNDS III	JUNE 30, 2015

Schedule of Investments June 30, 2015 (Unaudited)

LifePath Index 2035 Master Portfolio

(Percentages shown are based on Net Assets)


Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Equity Funds — 84.5%
iShares Cohen & Steers REIT ETF (b)		300,472	$	26,925,296
iShares Core MSCI Total International Stock ETF		665,980		36,702,158
iShares International Developed Real Estate ETF		818,566		24,344,153
iShares MSCI EAFE Small-Cap ETF		155,134		7,914,936
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	223,665,276		223,665,276
Master Small Cap Index Series	$	10,875,144		10,875,144
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)	$	82,152,783		82,152,783

				412,579,746
Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Fixed Income Funds — 15.1%
iShares TIPS Bond ETF		83,551	$	9,361,889
U.S. Total Bond Index Master Portfolio (fka Bond Index Master Portfolio)	$	64,567,113		64,567,113

				73,929,002
Short-Term Securities — 0.2%
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (c)		440,918		440,918
BlackRock Cash Funds: Prime, SL Agency Shares, 0.13% (c)(d)		556,200		556,200

				997,118
Total Affiliated Investment Companies (Cost — $454,585,664) — 99.8%				487,505,866
Other Assets Less Liabilities — 0.2%				907,235

Net Assets — 100.0%			$	488,413,101

Notes to Schedule of Investments

(a)


Affiliate	Shares/ Beneficial Interest Held at December 31, 2014		Shares/ Beneficial Interest Purchased			Shares/ Beneficial Interest Sold			Shares/ Beneficial Interest Held at June 30, 2015		Value at June 30, 2015		Net Income			Realized Gain (Loss)
BlackRock Cash Funds: Institutional, SL Agency Shares		1,029,104		—			(588,186	)¹		440,918	$	440,918	$	977			—
BlackRock Cash Funds: Prime, SL Agency Shares		9,300		546,900	²		—			556,200	$	556,200	$	4,012	³		—
iShares Cohen & Steers REIT ETF		236,670		82,871			(19,069	)		300,472	$	26,925,296	$	397,208		$	394,790
iShares Core MSCI Total International Stock ETF		601,151		89,229			(24,400	)		665,980	$	36,702,158	$	530,240		$	(60,371	)
iShares International Developed Real Estate ETF		656,946		206,619			(44,999	)		818,566	$	24,344,153	$	519,678		$	(99,480	)
iShares MSCI EAFE Small-Cap ETF		208,872		33,062			(86,800	)		155,134	$	7,914,936	$	93,369		$	431,984
iShares TIPS Bond ETF		64,925		20,579			(1,953	)		83,551	$	9,361,890		—		$	(1,173	)
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	193,467,131	$	30,198,145	²		—		$	223,665,276	$	223,665,276	$	2,023,180		$	1,592,973
Master Small Cap Index Series	$	9,587,520	$	1,287,624	²		—		$	10,875,144	$	10,875,144	$	65,674		$	349,988
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)	$	63,367,924	$	18,784,859	²		—		$	82,152,783	$	82,152,783	$	1,378,962		$	215,454
U.S. Total Bond Index Master Portfolio (fka Bond Index Master Portfolio)	$	51,838,842	$	12,728,271	²		—		$	64,567,113	$	64,567,113	$	541,753		$	68,959
¹ Represents net shares/beneficial interest sold.
² Represents net shares/beneficial interest purchased.
³ Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.

(b)

Security, or a portion of security, is on loan.

(c)

Represents the current yield as of report date.

(d)

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

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that LifePath Index Master Portfolio has the ability to access

•

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	71


Schedule of Investments (concluded)		LifePath Index 2035 Master Portfolio

As of June 30, 2015, the following table summarizes LifePath Index Master Portfolio’s investments categorized in the disclosure hierarchy:


	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Affiliated Investment Companies	$	106,245,550	$	381,260,316		—	$	487,505,866

LifePath Index Master Portfolio may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of June 30, 2015, collateral on securities loaned at value of $556,200 is categorized as Level 2 within the disclosure hierarchy.

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



72	BLACKROCK FUNDS III	JUNE 30, 2015

Schedule of Investments June 30, 2015 (Unaudited)

LifePath Index 2040 Master Portfolio

(Percentages shown are based on Net Assets)


Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Equity Funds — 93.3%
iShares Cohen & Steers REIT ETF		504,463	$	45,204,929
iShares Core MSCI Total International Stock ETF		817,556		45,055,511
iShares International Developed Real Estate ETF		1,370,572		40,760,811
iShares MSCI EAFE Small-Cap ETF		249,343		12,721,480
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	334,980,687		334,980,687
Master Small Cap Index Series	$	13,852,604		13,852,604
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)	$	134,304,414		134,304,414

				626,880,436
Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Fixed Income Funds — 6.3%
iShares TIPS Bond ETF (b)		42,066	$	4,713,495
U.S. Total Bond Index Master Portfolio (fka Bond Index Master Portfolio)	$	37,495,151		37,495,151

				42,208,646
Short-Term Securities — 0.2%
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (c)		1,200,557		1,200,557
BlackRock Cash Funds: Prime, SL Agency Shares, 0.13% (c)(d)		45,900		45,900

				1,246,457
Total Affiliated Investment Companies (Cost — $617,623,815) — 99.8%				670,335,539
Other Assets Less Liabilities — 0.2%				1,639,051

Net Assets — 100.0%			$	671,974,590

Notes to Schedule of Investments

(a)


Affiliate	Shares/ Beneficial Interest Held at December 31, 2014		Shares/ Beneficial Interest Purchased			Shares/ Beneficial Interest Sold			Shares/ Beneficial Interest Held at June 30, 2015		Value at June 30, 2015		Net Income			Realized Gain (Loss)
BlackRock Cash Funds: Institutional, SL Agency Shares		1,301,475		—			(100,918	)¹		1,200,557	$	1,200,557	$	1,430			—
BlackRock Cash Funds: Prime, SL Agency Shares		—		45,900	²		—			45,900	$	45,900	$	4,761	³		—
iShares Cohen & Steers REIT ETF		380,890		156,062			(32,489	)		504,463	$	45,204,929	$	656,362		$	663,285
iShares Core MSCI Total International Stock ETF		722,933		122,191			(27,568	)		817,556	$	45,055,511	$	643,444		$	(84,636	)
iShares International Developed Real Estate ETF		1,053,806		384,127			(67,361	)		1,370,572	$	40,760,811	$	859,444		$	(160,703	)
iShares MSCI EAFE Small-Cap ETF		304,945		57,770			(113,372	)		249,343	$	12,721,480	$	150,069		$	581,875
iShares TIPS Bond ETF		32,531		10,107			(572	)		42,066	$	4,713,495		—		$	(330	)
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	278,797,165	$	56,183,522	²		—		$	334,980,687	$	334,980,687	$	2,977,302		$	2,327,738
Master Small Cap Index Series	$	12,158,465	$	1,694,139	²		—		$	13,852,604	$	13,852,604	$	84,045		$	447,121
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)	$	100,880,849	$	33,423,565	²		—		$	134,304,414	$	134,304,414	$	2,216,386		$	335,736
U.S. Total Bond Index Master Portfolio (fka Bond Index Master Portfolio)	$	28,589,605	$	8,905,546	²		—		$	37,495,151	$	37,495,151	$	301,252		$	36,252
¹ Represents net shares/beneficial interest sold.
² Represents net shares/beneficial interest purchased.
³ Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.

(b)

Security, or a portion of security, is on loan.

(c)

Represents the current yield as of report date.

(d)

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

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that LifePath Index Master Portfolio has the ability to access

•

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	73


Schedule of Investments (concluded)		LifePath Index 2040 Master Portfolio

As of June 30, 2015, the following table summarizes LifePath Index Master Portfolio’s investments categorized in the disclosure hierarchy:


	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Affiliated Investment Companies	$	149,702,683	$	520,632,856		—	$	670,335,539

LifePath Index Master Portfolio may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of June 30, 2015, collateral on securities loaned at value of $45,900 is categorized as Level 2 within the disclosure hierarchy.

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



74	BLACKROCK FUNDS III	JUNE 30, 2015

Schedule of Investments June 30, 2015 (Unaudited)

LifePath Index 2045 Master Portfolio

(Percentages shown are based on Net Assets)


Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Equity Funds — 97.8%
iShares Cohen & Steers REIT ETF		233,385	$	20,913,630
iShares Core MSCI Total International Stock ETF (b)		509,151		28,059,312
iShares International Developed Real Estate ETF		633,531		18,841,212
iShares MSCI EAFE Small-Cap ETF		103,200		5,265,264
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	144,731,985		144,731,985
Master Small Cap Index Series	$	5,891,167		5,891,167
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)	$	50,469,620		50,469,620

				274,172,190
Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Fixed Income Funds — 1.8%
iShares TIPS Bond ETF		4,420	$	495,261
U.S. Total Bond Index Master Portfolio (fka Bond Index Master Portfolio)	$	4,459,660		4,459,660

				4,954,921
Short-Term Securities — 0.3%
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (c)		794,986		794,986
BlackRock Cash Funds: Prime, SL Agency Shares, 0.13% (c)(d)		95,625		95,625

				890,611
Total Affiliated Investment Companies (Cost — $262,114,132) — 99.9%				280,017,722
Other Assets Less Liabilities — 0.1%				409,083

Net Assets — 100.0%			$	280,426,805

Notes to Schedule of Investments

(a)


Affiliate	Shares/ Beneficial Interest Held at December 31, 2014		Shares/ Beneficial Interest Purchased			Shares/ Beneficial Interest Sold			Shares/ Beneficial Interest Held at June 30, 2015		Value at June 30, 2015		Net Income			Realized Gain (Loss)
BlackRock Cash Funds: Institutional, SL Agency Shares		745,850		49,136	¹		—			794,986	$	794,986	$	602			—
BlackRock Cash Funds: Prime, SL Agency Shares		—		95,625	¹		—			95,625	$	95,625	$	1,813	²		—
iShares Cohen & Steers REIT ETF		175,568		73,873			(16,056	)		233,385	$	20,913,630	$	304,796		$	326,487
iShares Core MSCI Total International Stock ETF		453,977		72,274			(17,100	)		509,151	$	28,059,312	$	406,131		$	(62,137	)
iShares International Developed Real Estate ETF		481,318		185,518			(33,305	)		633,531	$	18,841,212	$	396,935		$	(72,130	)
iShares MSCI EAFE Small-Cap ETF		133,177		24,561			(54,538	)		103,200	$	5,265,264	$	62,112		$	251,420
iShares TIPS Bond ETF		3,400		1,070			(50	)		4,420	$	495,261		—			—
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	119,219,041	$	25,512,944	¹		—		$	144,731,985	$	144,731,985	$	1,289,801		$	1,014,110
Master Small Cap Index Series	$	5,195,235	$	695,932	¹		—		$	5,891,167	$	5,891,167	$	35,983		$	191,191
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)	$	36,608,413	$	13,861,207	¹		—		$	50,469,620	$	50,469,620	$	849,003		$	132,442
U.S. Total Bond Index Master Portfolio (fka Bond Index Master Portfolio)	$	3,452,564	$	1,007,096	¹		—		$	4,459,660	$	4,459,660	$	36,701		$	4,223
¹ Represents net shares/beneficial interest purchased.
² Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.

(b)

Security, or a portion of security, is on loan.

(c)

Represents the current yield as of report date.

(d)

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

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that LifePath Index Master Portfolio has the ability to access

•

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	75


Schedule of Investments (concluded)		LifePath Index 2045 Master Portfolio

As of June 30, 2015, the following table summarizes LifePath Index Master Portfolio’s investments categorized in the disclosure hierarchy:


	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Affiliated Investment Companies	$	74,465,290	$	205,552,432		—	$	280,017,722

LifePath Index Master Portfolio may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of June 30, 2015, collateral on securities loaned at value of $95,625 is categorized as Level 2 within the disclosure hierarchy.

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



76	BLACKROCK FUNDS III	JUNE 30, 2015

Schedule of Investments June 30, 2015 (Unaudited)

LifePath Index 2050 Master Portfolio

(Percentages shown are based on Net Assets)


Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Equity Funds — 98.5%
iShares Cohen & Steers REIT ETF (b)		252,469	$	22,623,747
iShares Core MSCI Total International Stock ETF		556,585		30,673,399
iShares International Developed Real Estate ETF		683,970		20,341,268
iShares MSCI EAFE Small-Cap ETF		107,618		5,490,670
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	153,423,463		153,423,463
Master Small Cap Index Series	$	6,232,968		6,232,968
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)	$	54,215,131		54,215,131

				293,000,646
Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Fixed Income Fund — 1.0%
U.S. Total Bond Index Master Portfolio (fka Bond Index Master Portfolio)	$	2,992,441	$	2,992,441
Short-Term Securities — 0.4%
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (c)		712,974		712,974
BlackRock Cash Funds: Prime, SL Agency Shares, 0.13% (c)(d)		264,770		264,770

				977,744
Total Affiliated Investment Companies (Cost — $279,037,466) — 99.9%				296,970,831
Other Assets Less Liabilities — 0.1%				416,792

Net Assets — 100.0%			$	297,387,623

Notes to Schedule of Investments

(a)


Affiliate	Shares/ Beneficial Interest Held at December 31, 2014		Shares/ Beneficial Interest Purchased			Shares/ Beneficial Interest Sold			Shares/ Beneficial Interest Held at June 30, 2015		Value at June 30, 2015		Net Income			Realized Gain (Loss)
BlackRock Cash Funds: Institutional, SL Agency Shares		654,907		58,067	¹		—			712,974	$	712,974	$	671			—
BlackRock Cash Funds: Prime, SL Agency Shares		—		264,770	¹		—			264,770	$	264,770	$	8,508	²		—
iShares Cohen & Steers REIT ETF		182,681		92,144			(22,356	)		252,469	$	22,623,747	$	327,462		$	409,564
iShares Core MSCI Total International Stock ETF		503,636		73,149			(20,200	)		556,585	$	30,673,399	$	446,656		$	(73,283	)
iShares International Developed Real Estate ETF		506,059		227,547			(49,636	)		683,970	$	20,341,268	$	427,189		$	(105,369	)
iShares MSCI EAFE Small-Cap ETF		138,356		32,250			(62,988	)		107,618	$	5,490,670	$	64,771		$	314,984
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	122,826,821	$	30,596,642	¹		—		$	153,423,463	$	153,423,463	$	1,354,956		$	1,060,653
Master Small Cap Index Series	$	5,410,116	$	822,852	¹		—		$	6,232,968	$	6,232,968	$	38,202		$	203,807
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)	$	36,389,565	$	17,825,566	¹		—		$	54,215,131	$	54,215,131	$	884,146		$	134,185
U.S. Total Bond Index Master Portfolio (fka Bond Index Master Portfolio)	$	2,376,518	$	615,923	¹		—		$	2,992,441	$	2,992,441	$	25,155		$	3,049
¹ Represents net shares/beneficial interest purchased.
² Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.

(b)

Security, or a portion of security, is on loan.

(c)

Represents the current yield as of report date.

(d)

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

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that LifePath Index Master Portfolio has the ability to access

•

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	77


Schedule of Investments (concluded)		LifePath Index 2050 Master Portfolio

As of June 30, 2015, the following table summarizes LifePath Index Master Portfolio’s investments categorized in the disclosure hierarchy:


	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Affiliated Investment Companies	$	80,106,828	$	216,864,003		—	$	296,970,831

LifePath Index Master Portfolio may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of June 30, 2015, collateral on securities loaned at value of $264,770 is categorized as Level 2 within the disclosure hierarchy.

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



78	BLACKROCK FUNDS III	JUNE 30, 2015

Schedule of Investments June 30, 2015 (Unaudited)

LifePath Index 2055 Master Portfolio

(Percentages shown are based on Net Assets)


Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Equity Funds — 98.4%
iShares Cohen & Steers REIT ETF (b)		72,188	$	6,468,767
iShares Core MSCI Total International Stock ETF (b)		206,088		11,357,510
iShares International Developed Real Estate ETF		195,900		5,826,066
iShares MSCI EAFE Small-Cap ETF		32,217		1,643,711
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	43,529,751		43,529,751
Master Small Cap Index Series	$	1,771,917		1,771,917
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)	$	12,440,629		12,440,629

				83,038,351


Affiliated Investment Companies (a)	Shares/ Beneficial Interest		Value
Fixed Income Fund — 1.0%
U.S. Total Bond Index Master Portfolio (fka Bond Index Master Portfolio)	$	843,765	$	843,765
Short-Term Securities — 6.0%
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (c)		472,106		472,106
BlackRock Cash Funds: Prime, SL Agency Shares 0.13% (c)(d)		4,578,694		4,578,694

				5,050,800
Total Affiliated Investment Companies (Cost — $84,066,442) — 105.4%				88,932,916
Liabilities in Excess of Other Assets — (5.4)%				(4,568,015	)

Net Assets — 100.0%			$	84,364,901

Notes to Schedule of Investments

(a)


Affiliate	Shares/ Beneficial Interest Held at December 31, 2014		Shares/ Beneficial Interest Purchased			Shares/ Beneficial Interest Sold			Shares/ Beneficial Interest Held at June 30, 2015		Value at June 30, 2015		Net Income			Realized Gain (Loss)
BlackRock Cash Funds: Institutional, SL Agency Shares		231,529		240,577	¹		—			472,106	$	472,106	$	229			—
BlackRock Cash Funds: Prime, SL Agency Shares		—		4,578,694	¹		—			4,578,694	$	4,578,694	$	1,310	²		—
iShares Cohen & Steers REIT ETF		48,162		30,763			(6,737	)		72,188	$	6,468,767	$	92,862		$	114,326
iShares Core MSCI Total International Stock ETF		175,107		34,981			(4,000	)		206,088	$	11,357,510	$	163,800		$	(13,978	)
iShares International Developed Real Estate ETF		132,547		79,317			(15,964	)		195,900	$	5,826,066	$	121,387		$	(20,111	)
iShares MSCI EAFE Small-Cap ETF		36,496		11,321			(15,600	)		32,217	$	1,643,711	$	19,390		$	59,008
Large Cap Index Master Portfolio (fka Russell 1000^® Index Master Portfolio)	$	32,623,835	$	10,905,916	¹		—		$	43,529,751	$	43,529,751	$	376,585		$	295,325
Master Small Cap Index Series	$	1,436,584	$	335,333	¹		—		$	1,771,917	$	1,771,917	$	10,704		$	57,808
Total International ex U.S. Index Master Portfolio (fka ACWI ex-U.S. Index Master Portfolio)	$	7,348,791	$	5,091,838	¹		—		$	12,440,629	$	12,440,629	$	211,853		$	33,588
U.S. Total Bond Index Master Portfolio (fka Bond Index Master Portfolio)	$	703,501	$	140,264	¹		—		$	843,765	$	843,765	$	7,213		$	1,007
¹ Represents net shares/beneficial interest purchased.
² Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.

(b)

Security, or a portion of security, is on loan.

(c)

Represents the current yield as of report date.

(d)

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

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments is based on the pricing transparency of the investments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that LifePath Index Master Portfolio has the ability to access

•

See Notes to Financial Statements.



BLACKROCK FUNDS III	JUNE 30, 2015	79


Schedule of Investments (concluded)		LifePath Index 2055 Master Portfolio

As of June 30, 2015, the following table summarizes LifePath Index Master Portfolio’s investments categorized in the disclosure hierarchy:


	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Affiliated Investment Companies	$	30,346,854	$	58,586,062		—	$	88,932,916

LifePath Index Master Portfolio may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of June 30, 2015, collateral on securities loaned at value of $4,578,694 is categorized as Level 2 within the disclosure hierarchy.

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



80	BLACKROCK FUNDS III	JUNE 30, 2015


Statements of Assets and Liabilities		Master Investment Portfolio


June 30, 2015 (Unaudited)	LifePath Index Retirement Master Portfolio		LifePath Index 2020 Master Portfolio		LifePath Index 2025 Master Portfolio		LifePath Index 2030 Master Portfolio		LifePath Index 2035 Master Portfolio

Assets
Investments at value — affiliated^1,2	$	472,158,562	$	1,029,366,057	$	627,776,428	$	989,772,244	$	487,505,866
Receivables:
Contributions from investors		2,718,260		4,200,261		1,347,127		3,420,000		1,355,438
Investments sold		911,000		4,515,000		3,100,000		4,880,000		2,631,000
Dividends		263,783		632,606		643,811		889,724		623,609
Securities lending income — affiliated		445		453		1,774		1,064		554
Prepaid expenses		838		3,349		972		1,578		768

Total assets		476,052,888		1,038,717,726		632,870,112		998,964,610		492,117,235


Liabilities
Collateral on securities loaned at value		—		263,580		—		—		556,200
Payables:
Investments purchased		1,929,940		8,693,009		4,017,829		7,038,916		3,118,341
Professional fees		15,190		15,881		15,038		15,739		14,823
Investment advisory fees		13,707		35,649		18,976		32,614		10,278
Custodian fees		2,546		2,923		3,508		4,283		3,580
Trustees’ fees		1,250		2,898		1,049		2,363		808
Printing fees		2		—		—		—		104

Total liabilities		1,962,635		9,013,940		4,056,400		7,093,915		3,704,134

Net Assets	$	474,090,253	$	1,029,703,786	$	628,813,712	$	991,870,695	$	488,413,101


Net Assets Consist of
Investors’ capital	$	443,960,373	$	958,111,905	$	591,980,018	$	915,664,273	$	455,492,899
Net unrealized appreciation (depreciation)		30,129,880		71,591,881		36,833,694		76,206,422		32,920,202

Net Assets	$	474,090,253	$	1,029,703,786	$	628,813,712	$	991,870,695	$	488,413,101

¹ Investments at cost — affiliated	$	442,028,682	$	957,774,176	$	590,942,734	$	913,565,822	$	454,585,664
² Securities loaned at value		—	$	257,715		—		—	$	545,904


Statements of Assets and Liabilities		Master Investment Portfolio


June 30, 2015 (Unaudited)	LifePath Index 2040 Master Portfolio		LifePath Index 2045 Master Portfolio		LifePath Index 2050 Master Portfolio		LifePath Index 2055 Master Portfolio

Assets
Investments at value — affiliated^1,2	$	670,335,539	$	280,017,722	$	296,970,831	$	88,932,916
Receivables:
Investments sold		3,040,000		1,048,000		1,290,000		295,000
Contributions from investors		2,961,697		766,610		1,698,653		464,841
Dividends		793,513		468,243		511,427		183,190
Securities lending income — affiliated		525		219		147		648
From the Manager		—		—		—		6,585
Prepaid expenses		1,048		424		439		36

Total assets		677,132,322		282,301,218		300,471,497		89,883,216


Liabilities
Collateral on securities loaned at value		45,900		95,625		264,770		4,578,694
Payables:
Investments purchased		5,075,231		1,757,678		2,797,207		919,729
Professional fees		15,645		15,132		15,023		14,765
Investment advisory fees		15,363		1,812		2,056		—
Custodian fees		4,265		3,590		4,298		3,811
Trustees’ fees		1,328		126		70		—
Printing fees		—		450		450		606
Other accrued expenses payable		—		—		—		710

Total liabilities		5,157,732		1,874,413		3,083,874		5,518,315

Net Assets	$	671,974,590	$	280,426,805	$	297,387,623	$	84,364,901


Net Assets Consist of
Investors’ capital	$	619,262,866	$	262,523,215	$	279,454,258	$	79,498,427
Net unrealized appreciation (depreciation)		52,711,724		17,903,590		17,933,365		4,866,474

Net Assets	$	671,974,590	$	280,426,805	$	297,387,623	$	84,364,901

¹ Investments at cost — affiliated	$	617,623,815	$	262,114,132	$	279,037,466	$	84,066,442
² Securities loaned at value	$	44,820	$	93,687	$	259,869	$	4,480,902


Statements of Operations		Master Investment Portfolio


Six Months Ended June 30, 2015 (Unaudited)	LifePath Index Retirement Master Portfolio			LifePath Index 2020 Master Portfolio			LifePath Index 2025 Master Portfolio			LifePath Index 2030 Master Portfolio			LifePath Index 2035 Master Portfolio

Investment Income
Dividends — affiliated	$	314,332		$	1,254,672		$	1,300,435		$	2,342,429		$	1,540,495
Securities lending — affiliated — net		2,769			7,448			12,455			5,779			4,012
Income — affiliated		767			1,943			1,247			2,113			977
Net investment income allocated from the applicable Underlying Master Portfolios:
Dividends		1,813,482			5,076,715			3,429,870			6,514,659			3,501,283
Interest		2,281,784			3,812,979			1,772,575			1,989,190			615,426
Expenses		(136,609	)		(280,623	)		(158,243	)		(246,615	)		(115,241	)
Fees waived		24,427			41,760			19,994			23,670			8,101

Total income		4,300,952			9,914,894			6,378,333			10,631,225			5,555,053


Expenses
Investment advisory		116,311			247,701			149,509			234,815			117,284
Professional		14,299			14,753			14,299			14,661			14,210
Independent Trustees		8,299			14,174			9,379			13,269			8,026
Custodian		3,706			4,777			4,875			5,326			4,522
Printing		242			362			181			362			37
Miscellaneous		1,593			3,385			1,879			3,135			1,579

Total expenses		144,450			285,152			180,122			271,568			145,658
Less fees waived by the Manager		(28,145	)		(37,478	)		(30,643	)		(36,810	)		(36,789	)

Total expenses after fees waived		116,305			247,674			149,479			234,758			108,869

Net investment income		4,184,647			9,667,220			6,228,854			10,396,467			5,446,184


Realized and Unrealized Gain (Loss)
Net realized gain from:
Investments — affiliated		126,333			657,651			459,407			1,002,885			665,750
Allocation from the applicable Underlying Master Portfolios from investments, financial futures contracts and foreign currency transactions		1,800,139			4,099,216			2,572,341			4,283,733			2,227,374

		1,926,472			4,756,867			3,031,748			5,286,618			2,893,124

Net change in unrealized appreciation (depreciation) on:
Investments — affiliated		687,299			89,236			(245,157	)		(2,182,477	)		1,341,381
Allocation from the applicable Underlying Master Portfolios from investments, financial futures contracts and foreign currency translations		(1,407,150	)		(1,358,087	)		(247,630	)		1,593,317			(1,288,153	)

		(719,851	)		(1,268,851	)		(492,787	)		(589,160	)		53,228

Net realized and unrealized gain		1,206,621			3,488,016			2,538,961			4,697,458			2,946,352

Net Increase in Net Assets Resulting from Operations	$	5,391,268		$	13,155,236		$	8,767,815		$	15,093,925		$	8,392,536


Statements of Operations		Master Investment Portfolio


Six Months Ended June 30, 2015 (Unaudited)	LifePath Index 2040 Master Portfolio			LifePath Index 2045 Master Portfolio			LifePath Index 2050 Master Portfolio			LifePath Index 2055 Master Portfolio

Investment Income
Dividends — affiliated	$	2,309,321		$	1,169,974		$	1,266,078		$	397,439
Securities lending — affiliated — net		4,761			1,813			8,508			1,310
Income — affiliated		1,430			602			671			229
Net investment income allocated from the applicable Underlying Master Portfolios:
Dividends		5,330,119			2,196,302			2,299,748			604,962
Interest		396,426			73,632			63,563			17,428
Expenses		(154,253	)		(60,319	)		(62,674	)		(16,533	)
Fees waived		6,693			1,873			1,822			498

Total income		7,894,497			3,383,877			3,577,716			1,005,333


Expenses
Investment advisory		158,955			66,858			70,134			19,557
Professional		14,299			14,207			14,207			13,937
Independent Trustees		9,833			5,676			5,765			3,507
Custodian		5,243			4,786			5,510			5,056
Printing		270			—			—			—
Miscellaneous		2,082			806			827			56

Total expenses		190,682			92,333			96,443			42,113
Less fees waived by the Manager		(43,274	)		(35,076	)		(36,452	)		(26,814	)

Total expenses after fees waived		147,408			57,257			59,991			15,299

Net investment income		7,747,089			3,326,620			3,517,725			990,034


Realized and Unrealized Gain (Loss)
Net realized gain from:
Investments — affiliated		999,491			443,640			545,896			139,245
Allocation from the applicable Underlying Master Portfolios from investments, financial futures contracts and foreign currency transactions		3,146,847			1,341,966			1,401,694			387,728

		4,146,338			1,785,606			1,947,590			526,973

Net change in unrealized appreciation (depreciation) on:
Investments — affiliated		270,043			(1,152,049	)		(1,341,509	)		(364,970	)
Allocation from the applicable Underlying Master Portfolios from investments, financial futures contracts and foreign currency translations		(283,508	)		1,274,860			1,299,658			320,889

		(13,465	)		122,811			(41,851	)		(44,081	)

Net realized and unrealized gain		4,132,873			1,908,417			1,905,739			482,892

Net Increase in Net Assets Resulting from Operations	$	11,879,962		$	5,235,037		$	5,423,464		$	1,472,926


Statements of Changes in Net Assets		Master Investment Portfolio


	LifePath Index Retirement Master Portfolio						LifePath Index 2020 Master Portfolio
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014			Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	4,184,647		$	6,893,461		$	9,667,220		$	14,842,949
Net realized gain		1,926,472			5,267,174			4,756,867			9,750,758
Net change in unrealized appreciation (depreciation)		(719,851	)		8,358,818			(1,268,851	)		19,682,904

Net increase in net assets resulting from operations		5,391,268			20,519,453			13,155,236			44,276,611


Capital Transactions
Proceeds from contributions		114,484,667			143,397,604			240,141,623			277,711,443
Value of withdrawals		(77,580,783	)		(53,715,954	)		(104,916,616	)		(56,667,691	)

Net increase in net assets derived from capital transactions		36,903,884			89,681,650			135,225,007			221,043,752


Net Assets
Total increase in net assets		42,295,152			110,201,103			148,380,243			265,320,363
Beginning of period		431,795,101			321,593,998			881,323,543			616,003,180

End of period	$	474,090,253		$	431,795,101		$	1,029,703,786		$	881,323,543


Statements of Changes in Net Assets		Master Investment Portfolio


	LifePath Index 2025 Master Portfolio						LifePath Index 2030 Master Portfolio
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014			Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	6,228,854		$	8,199,564		$	10,396,467		$	14,418,016
Net realized gain		3,031,748			4,244,272			5,286,618			7,450,561
Net change in unrealized appreciation (depreciation)		(492,787	)		11,493,328			(589,160	)		20,621,754

Net increase in net assets resulting from operations		8,767,815			23,937,164			15,093,925			42,490,331


Capital Transactions
Proceeds from contributions		162,281,779			243,638,235			238,162,484			282,820,961
Value of withdrawals		(60,430,300	)		(27,988,660	)		(79,680,907	)		(35,497,084	)

Net increase in net assets derived from capital transactions		101,851,479			215,649,575			158,481,577			247,323,877


Net Assets
Total increase in net assets		110,619,294			239,586,739			173,575,502			289,814,208
Beginning of period		518,194,418			278,607,679			818,295,193			528,480,985

End of period	$	628,813,712		$	518,194,418		$	991,870,695		$	818,295,193


Statements of Changes in Net Assets		Master Investment Portfolio


	LifePath Index 2035 Master Portfolio						LifePath Index 2040 Master Portfolio
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014			Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	5,446,184		$	6,809,249		$	7,747,089		$	9,812,969
Net realized gain		2,893,124			2,778,041			4,146,338			4,085,183
Net change in unrealized appreciation (depreciation)		53,228			9,904,541			(13,465	)		14,271,929

Net increase in net assets resulting from operations		8,392,536			19,491,831			11,879,962			28,170,081


Capital Transactions
Proceeds from contributions		114,406,983			198,363,584			171,121,222			215,183,238
Value of withdrawals		(44,426,548	)		(14,990,358	)		(57,528,059	)		(23,545,222	)

Net increase in net assets derived from capital transactions		69,980,435			183,373,226			113,593,163			191,638,016


Net Assets
Total increase in net assets		78,372,971			202,865,057			125,473,125			219,808,097
Beginning of period		410,040,130			207,175,073			546,501,465			326,693,368

End of period	$	488,413,101		$	410,040,130		$	671,974,590		$	546,501,465


Statements of Changes in Net Assets		Master Investment Portfolio


	LifePath Index 2045 Master Portfolio						LifePath Index 2050 Master Portfolio,
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014			Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	3,326,620		$	3,844,455		$	3,517,725		$	3,884,535
Net realized gain		1,785,606			1,288,616			1,947,590			1,121,033
Net change in unrealized appreciation (depreciation)		122,811			5,861,518			(41,851	)		6,166,746

Net increase in net assets resulting from operations		5,235,037			10,994,589			5,423,464			11,172,314


Capital Transactions
Proceeds from contributions		78,051,066			117,709,595			103,398,033			127,679,053
Value of withdrawals		(29,655,538	)		(6,474,693	)		(44,341,567	)		(9,666,042	)

Net increase in net assets derived from capital transactions		48,395,528			111,234,902			59,056,466			118,013,011


Net Assets
Total increase in net assets		53,630,565			122,229,491			64,479,930			129,185,325
Beginning of period		226,796,240			104,566,749			232,907,693			103,722,368

End of period	$	280,426,805		$	226,796,240		$	297,387,623		$	232,907,693


Statements of Changes in Net Assets		Master Investment Portfolio


	LifePath Index 2055 Master Portfolio
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	990,034		$	986,900
Net realized gain		526,973			250,120
Net change in unrealized appreciation (depreciation)		(44,081	)		1,524,141

Net increase in net assets resulting from operations		1,472,926			2,761,161


Capital Transactions
Proceeds from contributions		36,174,033			40,430,983
Value of withdrawals		(15,157,816	)		(5,284,411	)

Net increase in net assets derived from capital transactions		21,016,217			35,146,572


Net Assets
Total increase in net assets		22,489,143			37,907,733
Beginning of period		61,875,758			23,968,025

End of period	$	84,364,901		$	61,875,758


Financial Highlights		Master Investment Portfolio


	LifePath Index Retirement Master Portfolio
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Total Return
Total return		1.20%	²		5.78%			7.72%			9.17%			(0.59)%	²


Ratios to Average Net Assets
Total expenses^3,4,5		0.11%	⁶		0.13%			0.16%			0.18%			3.44%	^6,7

Total expenses after fees waived^3,4,5		0.10%	⁶		0.11%			0.14%			0.15%			0.15%	⁶

Net investment income^4,5,8		1.80%	⁶		1.87%			1.74%			2.02%			2.87%	⁶


Supplemental Data
Net assets, end of period (000)		$474,090			$431,795			$321,594			$201,972			$1,968

Portfolio turnover rate		9%	⁹		15%	⁹		18%	⁹		1%	¹⁰		1%	¹⁰

Commencement of operations.

Aggregate total return.

Includes the LifePath Index Master Portfolio’s pro rata portion of expenses from Large Cap Index Master Portfolio, Master International Index Series, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio (collectively, the “Underlying Master Portfolios”). These ratios do not reflect any expenses incurred indirectly as a result of investments in BlackRock Cash Funds: Institutional, BlackRock Cash Funds: Prime and iShares exchange-traded funds.

⁴

Includes the LifePath Index Master Portfolio’s share of the Underlying Master Portfolios’ allocated fees waived of 0.01%, 0.01%, 0.00%, 0.02% and 0.08% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁵

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.03%, 0.03%, 0.02%, 0.02% and 0.04% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively, although the ratio does include the LifePath Index Master Portfolio’s share of the Underlying Master Portfolios’ allocated expenses and/or net investment income.

⁶

Annualized.

⁷

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 3.45%.

⁸

Includes the LifePath Index Master Portfolio’s share of the allocated net investment income from the Underlying Master Portfolios.

⁹

Includes the purchases and sales of the underlying funds and the Underlying Master Portfolios.

¹⁰

Excludes purchases and sales of the Underlying Master Portfolios. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 15% and 9% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.


Financial Highlights		Master Investment Portfolio


	LifePath Index 2020 Master Portfolio
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Total Return
Total return		1.46%	²		6.15%			11.36%			11.36%			(3.71)%	²


Ratios to Average Net Assets
Total expenses^3,4,5		0.11%	⁶		0.12%			0.16%			0.19%			3.55%	^6,7

Total expenses after fees waived^3,4,5		0.10%	⁶		0.11%			0.14%			0.16%			0.18%	⁶

Net investment income^4,5,8		1.95%	⁶		1.99%			2.01%			2.19%			2.70%	⁶


Supplemental Data
Net assets, end of period (000)		$1,029,704			$881,324			$616,003			$286,973			$1,908

Portfolio turnover rate		6%	⁹		12%	⁹		12%	⁹		1%	¹⁰		1%	¹⁰

Commencement of operations.

Aggregate total return.

⁴

Includes the LifePath Index Master Portfolio’s share of the Underlying Master Portfolios’ allocated fees waived of 0.01%, 0.01%, 0.00%, 0.02% and 0.10% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁵

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.04%, 0.04%, 0.03%, 0.03% and 0.05% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively, although the ratio does include the LifePath Index Master Portfolio’s share of the Underlying Master Portfolios’ allocated expenses and/or net investment income.

⁶

Annualized.

⁷

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 3.56%.

⁸

Includes the LifePath Index Master Portfolio’s share of the allocated net investment income from the Underlying Master Portfolios.

⁹

Includes the purchases and sales of the underlying funds and the Underlying Master Portfolios.

¹⁰

Excludes purchases and sales of the Underlying Master Portfolios. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 13% and 8% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.


Financial Highlights		Master Investment Portfolio


	LifePath Index 2025 Master Portfolio
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Total Return
Total return		1.56%	²		6.47%			13.48%			12.34%			(5.10)%	²


Ratios to Average Net Assets
Total expenses^3,4,5		0.11%	⁶		0.12%			0.17%			0.23%			3.59%	^6,7

Total expenses after fees waived^3,4,5		0.10%	⁶		0.11%			0.14%			0.16%			0.18%	⁶

Net investment income^4,5,8		2.08%	⁶		2.08%			2.19%			2.27%			2.58%	⁶


Supplemental Data
Net assets, end of period (000)		$628,814			$518,194			$278,608			$122,448			$1,882

Portfolio turnover rate		7%	⁹		15%	⁹		13%	⁹		0%	^10,11		0%	^10,11

Commencement of operations.

Aggregate total return.

⁴

Includes the LifePath Index Master Portfolio’s share of the Underlying Master Portfolios’ allocated fees waived of 0.01%, 0.01%, 0.00%, 0.02% and 0.11% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁵

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.05%, 0.05%, 0.04%, 0.03% and 0.06% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively, although the ratio does include the LifePath Index Master Portfolio’s share of the Underlying Master Portfolios’ allocated expenses and/or net investment income.

⁶

Annualized.

⁷

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 3.60%.

⁸

Includes the LifePath Index Master Portfolio’s share of the allocated net investment income from the Underlying Master Portfolios.

⁹

Includes the purchases and sales of the underlying funds and the Underlying Master Portfolios.

¹⁰

Excludes purchases and sales of the Underlying Master Portfolios. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 14% and 8% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹¹

Rounds to less than 1%.


Financial Highlights		Master Investment Portfolio


	LifePath Index 2030 Master Portfolio
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Total Return
Total return		1.75%	²		6.64%			15.40%			13.28%			(6.28)%	²


Ratios to Average Net Assets
Total expenses^3,4,5		0.11%	⁶		0.12%			0.16%			0.21%			3.63%	^6,7

Total expenses after fees waived^3,4,5		0.10%	⁶		0.11%			0.15%			0.17%			0.19%	⁶

Net investment income^4,5,8		2.18%	⁶		2.14%			2.33%			2.36%			2.50%	⁶


Supplemental Data
Net assets, end of period (000)		$991,871			$818,295			$528,481			$206,007			$1,859

Portfolio turnover rate		5%	⁹		20%	⁹		12%	⁹		2%	¹⁰		0%	^10,11

Commencement of operations.

Aggregate total return.

⁴

Includes the LifePath Index Master Portfolio’s share of the Underlying Master Portfolios’ allocated fees waived of 0.01%, 0.01%, 0.00%, 0.02% and 0.12% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁵

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.06%, 0.05%, 0.04%, 0.04% and 0.06% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively, although the ratio does include the LifePath Index Master Portfolio’s share of the Underlying Master Portfolios’ allocated expenses and/or net investment income.

⁶

Annualized.

⁷

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 3.64%.

⁸

Includes the LifePath Index Master Portfolio’s share of the allocated net investment income from the Underlying Master Portfolios.

⁹

Includes the purchases and sales of the underlying funds and the Underlying Master Portfolios.

¹⁰

Excludes purchases and sales of the Underlying Master Portfolios. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 18% and 6% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹¹

Rounds to less than 1%.


Financial Highlights		Master Investment Portfolio


	LifePath Index 2035 Master Portfolio
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Total Return
Total return		1.91%	²		6.82%			17.02%			14.07%			(7.35)%	²


Ratios to Average Net Assets
Total expenses^3,4,5		0.11%	⁶		0.12%			0.18%			0.26%			3.67%	^6,7

Total expenses after fees waived^3,4,5		0.09%	⁶		0.11%			0.15%			0.17%			0.19%	⁶

Net investment income^4,5,8		2.32%	⁶		2.22%			2.47%			2.44%			2.43%	⁶


Supplemental Data
Net assets, end of period (000)		$488,413			$410,040			$207,175			$81,763			$1,838

Portfolio turnover rate		6%	⁹		25%	⁹		12%	⁹		1%	¹⁰		0%	^10,11

Commencement of operations.

Aggregate total return.

⁴

Includes the LifePath Index Master Portfolio’s share of the Underlying Master Portfolios’ allocated fees waived of 0.00%, 0.01%, 0.00%, 0.02% and 0.13% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁵

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.07%, 0.06%, 0.05%, 0.04% and 0.06% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively, although the ratio does include the LifePath Index Master Portfolio’s share of the Underlying Master Portfolios’ allocated expenses and/or net investment income.

⁶

Annualized.

⁷

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 3.68%.

⁸

Includes the LifePath Index Master Portfolio’s share of the allocated net investment income from the Underlying Master Portfolios.

⁹

Includes the purchases and sales of the underlying funds and the Underlying Master Portfolios.

¹⁰

Excludes purchases and sales of the Underlying Master Portfolios. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 24% and 7% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹¹

Rounds to less than 1%.


Financial Highlights		Master Investment Portfolio


	LifePath Index 2040 Master Portfolio
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Total Return
Total return		2.11%	²		6.90%			18.66%			15.03%			(8.42)%	²


Ratios to Average Net Assets
Total expenses^3,4,5		0.11%	⁶		0.12%			0.17%			0.24%			3.70%	^6,7

Total expenses after fees waived^3,4,5		0.09%	⁶		0.11%			0.15%			0.18%			0.20%	⁶

Net investment income^4,5,8		2.44%	⁶		2.27%			2.59%			2.50%			2.36%	⁶


Supplemental Data
Net assets, end of period (000)		$671,975			$546,501			$326,693			$107,671			$1,819

Portfolio turnover rate		5%	⁹		29%	⁹		12%	⁹		3%	¹⁰		0%	^10,11

Commencement of operations.

Aggregate total return.

⁴

Includes the LifePath Index Master Portfolio’s share of the Underlying Master Portfolios’ allocated fees waived of 0.00%, 0.01%, 0.00%, 0.02% and 0.14% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁵

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.07%, 0.06%, 0.05%, 0.04% and 0.07% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively, although the ratio does include the LifePath Index Master Portfolio’s share of the Underlying Master Portfolios’ allocated expenses and/or net investment income.

⁶

Annualized.

⁷

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 3.71%.

⁸

Includes the LifePath Index Master Portfolio’s share of the allocated net investment income from the Underlying Master Portfolios.

⁹

Includes the purchases and sales of the underlying funds and the Underlying Master Portfolios.

¹⁰

Excludes purchases and sales of the Underlying Master Portfolios. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 21% and 5% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹¹

Rounds to less than 1%.


Financial Highlights		Master Investment Portfolio


	LifePath Index 2045 Master Portfolio
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Total Return
Total return		2.09%	²		7.10%			20.33%			15.61%			(9.49)%	²


Ratios to Average Net Assets
Total expenses^3,4,5		0.11%	⁶		0.13%			0.21%			0.41%			3.74%	^6,7

Total expenses after fees waived^3,4,5		0.09%	⁶		0.10%			0.15%			0.17%			0.21%	⁶

Net investment income^4,5,8		2.49%	⁶		2.34%			2.77%			2.62%			2.29%	⁶


Supplemental Data
Net assets, end of period (000)	$	280,427		$	226,796		$	104,567		$	33,177		$	1,799

Portfolio turnover rate		7%	⁹		30%	⁹		12%	⁹		2%	¹⁰		0%	^10,11

Commencement of operations.

Aggregate total return.

⁴

Includes the LifePath Index Master Portfolio’s share of the Underlying Master Portfolios’ allocated fees waived of 0.00%, 0.00%, 0.00%, 0.02% and 0.15% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively.

⁵

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.08%, 0.07%, 0.05%, 0.04% and 0.07% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively, although the ratio does include the LifePath Index Master Portfolio’s share of the Underlying Master Portfolios’ allocated expenses and/or net investment income.

⁶

Annualized.

⁷

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 3.75%.

⁸

Includes the LifePath Index Master Portfolio’s share of the allocated net investment income from the Underlying Master Portfolios.

⁹

Includes the purchases and sales of the underlying funds and the Underlying Master Portfolios.

¹⁰

Excludes purchases and sales of the Underlying Master Portfolios. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 22% and 6% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹¹

Rounds to less than 1%.


Financial Highlights		Master Investment Portfolio


	LifePath Index 2050 Master Portfolio
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Total Return
Total return		2.14%	²		7.28%			21.62%			16.37%			(10.34)%	²


Ratios to Average Net Assets
Total expenses^3,4,5		0.11%	⁶		0.13%			0.21%			0.46%			3.76%	^6,7

Total expenses after fees waived^3,4,5		0.09%	⁶		0.10%			0.15%			0.18%			0.21%	⁶

Net investment income^4,5,8		2.51%	⁶		2.38%			2.91%			2.67%			2.25%	⁶


Supplemental Data
Net assets, end of period (000)		$297,388			$232,908			$103,722			$26,037			$1,784

Portfolio turnover rate		8%	⁹		22%	⁹		12%	⁹		3%	¹⁰		0%	^10,11

Commencement of operations.

Aggregate total return.

⁴

⁵

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.08%, 0.08%, 0.06%, 0.05% and 0.07% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively, although the ratio does include the LifePath Index Master Portfolio’s share of the Underlying Master Portfolios’ allocated expenses and/or net investment income.

⁶

Annualized.

⁷

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 3.77%.

⁸

Includes the LifePath Index Master Portfolio’s share of the allocated net investment income from the Underlying Master Portfolios.

⁹

Includes the purchases and sales of the underlying funds and the Underlying Master Portfolios.

¹⁰

Excludes purchases and sales of the Underlying Master Portfolios. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 26% and 5% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹¹

Rounds to less than 1%.


Financial Highlights		Master Investment Portfolio


	LifePath Index 2055 Master Portfolio
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period May 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period May 31, 2011¹ to December 31, 2011

Total Return
Total return		2.16%	²		7.50%			22.99%			16.83%			(10.96)%	²


Ratios to Average Net Assets
Total expenses^3,4,5		0.15%	⁶		0.20%			0.42%			1.39%			3.79%	^6,7

Total expenses after fees waived^3,4,5		0.08%	⁶		0.10%			0.15%			0.15%			0.21%	⁶

Net investment income^4,5,8		2.51%	⁶		2.46%			3.09%			2.76%			2.24%	⁶


Supplemental Data
Net assets, end of period (000)		$84,365			$61,856			$23,968			$4,908			$1,769

Portfolio turnover rate		11%	⁹		22%	⁹		15%	⁹		8%	¹⁰		0%	^10,11

Commencement of operations.

Aggregate total return.

⁴

⁵

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.09%, 0.09%, 0.06%, 0.05% and 0.08% for the six months ended June 30, 2015 and the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the period ended December 31, 2011, respectively, although the ratio does include the LifePath Index Master Portfolio’s share of the Underlying Master Portfolios’ allocated expenses and/or net investment income.

⁶

Annualized.

⁷

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 3.79%.

⁸

Includes the LifePath Index Master Portfolio’s share of the allocated net investment income from the Underlying Master Portfolios.

⁹

Includes the purchases and sales of the underlying funds and the Underlying Master Portfolios.

¹⁰

Excludes purchases and sales of the Underlying Master Portfolios. If these transactions had been included to conform to the current presentation, the portfolio turnover rate would have been 53% and 13% for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.

¹¹

Rounds to less than 1%.


Notes to Financial Statements (Unaudited)		Master Investment Portfolio

1. Organization:

Master Investment Portfolio (“MIP”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a diversified, open-end management investment company. MIP is organized as a Delaware statutory trust. The financial statements and these accompanying notes relate to nine series of MIP: LifePath^® Index Retirement Master Portfolio, LifePath^® Index 2020 Master Portfolio, LifePath^® Index 2025 Master Portfolio, LifePath^® Index 2030 Master Portfolio, LifePath^® Index 2035 Master Portfolio, LifePath^® Index 2040 Master Portfolio, LifePath^® Index 2045 Master Portfolio, LifePath^® Index 2050 Master Portfolio and LifePath^® Index 2055 Master Portfolio (each, a “LifePath Index Master Portfolio” and collectively, the “LifePath Index Master Portfolios”).

As of June 30, 2015, the investment of LifePath Index 2020 Master Portfolio, LifePath Index 2025 Master Portfolio, LifePath Index 2030 Master Portfolio, LifePath Index 2035 Master Portfolio, LifePath Index 2040 Master Portfolio, LifePath Index 2045 Master Portfolio, LifePath Index 2050 Master Portfolio and LifePath Index 2055 Master Portfolio in the Large Cap Index Master Portfolio represented 29.0%, 34.8%, 40.4%, 45.8%, 49.9%, 51.6%, 51.6% and 51.6%, respectively, of net assets. The investment of LifePath Index Retirement Master Portfolio, LifePath Index 2020 Master Portfolio and LifePath Index 2025 Master Portfolio in the U.S. Total Bond Index Master Portfolio represented 51.0%, 40.6% and 31.1%, respectively, of net assets. As such, the financial statements of Large Cap Index Master Portfolio and U.S. Total Bond Index Master Portfolio, including the Schedules of Investments, should be read in conjunction with each respective LifePath Index Master Portfolio’s financial statements. The financial statements of Large Cap Index Master Portfolio, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio, included in filings by MIP, except the financial statements of Master Small Cap Index Series, which are included in filings by Quantitative Master Series LLC, are available, without charge, on the U.S. Securities and Exchange Commission’s (“SEC’s”) website at http://www.sec.gov.

The LifePath Index Master Portfolios will generally invest in other registered investment companies (each, an “Underlying Fund” and collectively, the “Underlying Funds”) that are managed by subsidiaries of BlackRock, Inc. (“BlackRock”) and its affiliates and affiliates of the LifePath Index Master Portfolios. The LifePath Index Master Portfolios may also invest in other master portfolios (“Underlying Master Portfolios”) that are managed by subsidiaries of BlackRock.

The value of a LifePath Index Master Portfolio’s investment in each of Large Cap Index Master Portfolio, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio reflects that LifePath Index Master Portfolio’s proportionate interest in the net assets of that Underlying Master Portfolio. As of June 30, 2015, each LifePath Index Master Portfolio held interests in Large Cap Index Master Portfolio, Master Small Cap Index Series, Total International ex U.S. Index Master Portfolio and U.S. Total Bond Index Master Portfolio as follows:


	Large Cap Index Master Portfolio		Master Small Cap Index Series		Total International ex U.S. Index Master Portfolio		U.S. Total Bond Index Master Portfolio
LifePath Index Retirement Master Portfolio		3.1%		1.8%		5.4%		17.4%
LifePath Index 2020 Master Portfolio		8.6%		3.5%		16.4%		30.0%
LifePath Index 2025 Master Portfolio		6.3%		1.9%		10.1%		14.1%
LifePath Index 2030 Master Portfolio		11.6%		2.6%		21.0%		15.6%
LifePath Index 2035 Master Portfolio		6.5%		1.1%		10.5%		4.6%
LifePath Index 2040 Master Portfolio		9.7%		1.4%		17.2%		2.7%
LifePath Index 2045 Master Portfolio		4.2%		0.6%		6.5%		0.3%
LifePath Index 2050 Master Portfolio		4.4%		0.6%		7.0%		0.2%
LifePath Index 2055 Master Portfolio		1.3%		0.2%		1.6%		0.1%

The LifePath Index Master Portfolios, together with certain other registered investment companies advised by BlackRock Fund Advisors (“BFA” or the “Manager”) or its affiliates, are included in a complex of open-end funds referred to as the Equity-Liquidity Complex.

2. Significant Accounting Policies:

The LifePath Index Master Portfolios’ 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 and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each LifePath Index Master Portfolio is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. The following is a summary of significant accounting policies followed by the LifePath Index Master Portfolios:

Valuation: The LifePath Index Master Portfolios’ investments are valued at fair value as of the close of trading on the New York Stock Exchange (“NYSE”) (generally 4:00 p.m., Eastern time). U.S. GAAP defines fair value as the price the LifePath Index Master Portfolios would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The LifePath Index Master Portfolios determine the fair values of the LifePath Index Master Portfolios’ financial instruments at market value using independent dealers or pricing services under policies approved by the Board of Trustees of the MIP (the “Board”). 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 provide oversight of the pricing function for the LifePath Index Master Portfolios for all financial instruments. Investments in open-end registered investment companies are valued at NAV each business day.



BLACKROCK FUNDS III	JUNE 30, 2015	99


Notes to Financial Statements (continued)		Master Investment Portfolio

The market value of the LifePath Index Master Portfolios’ investments in the Underlying Funds is based on the published NAV of each Underlying Fund computed as of the close of regular trading on the New York Stock Exchange (“NYSE”) on days when the NYSE is open.

Investment Transactions and Investment Income: For financial reporting purposes, investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on investment transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend date. Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when the LifePath Index Master Portfolios are informed of the ex-dividend date. 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, some 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 on the accrual basis.

Each LifePath Index Master Portfolio records daily its proportionate share of the Underlying Master Portfolios’ income, expenses and realized and unrealized gains and losses.

Other: Expenses directly related to a LifePath Index Master Portfolio are charged to that LifePath Index Master Portfolio. Other operating expenses shared by several funds are prorated among those funds on the basis of relative net assets or other appropriate methods.

The LifePath Index Master Portfolios have an arrangement with the custodian whereby fees may be reduced by credits earned on uninvested cash balances, which, if applicable, are shown as fees paid indirectly in the Statements of Operations. The custodian imposes fees on overdrawn cash balances, which can be offset by accumulated credits earned or may result in additional custody charges.

3. Securities and Other Investments:

Securities Lending: The LifePath Index Master Portfolios may lend their securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the LifePath Index Master Portfolios collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by each LifePath Index Master Portfolio 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 LifePath Index Master Portfolio and any additional required collateral is delivered to the LifePath Index Master Portfolio, or excess collateral returned by the LifePath Index Master Portfolio, on the next business day. During the term of the loan, the LifePath Index Master Portfolio is entitled to all distributions made on or in respect of the loaned securities. 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.

The market value of securities on loan, all of which were classified affiliated investments in the LifePath Index Master Portfolios’ Schedules of Investments, and the value of the related collateral are shown separately in the Statements of Assets and Liabilities as a component of investments at value — affiliated, and collateral on securities loaned at value, respectively. As of June 30, 2015, any securities on loan were collateralized by cash. The cash collateral invested by the securities lending agent, BlackRock Institutional Trust Company, N.A. (“BTC”), if any, is disclosed in the Schedules of Investments.

Securities lending transactions are entered into by the LifePath Index Master Portfolios 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 LifePath Index Master Portfolios, 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, the borrower can resell or re-pledge the loaned securities, and the LifePath Index Master Portfolios can reinvest cash collateral, or, upon an event of default, resell or re-pledge the collateral.



100	BLACKROCK FUNDS III	JUNE 30, 2015


Notes to Financial Statements (continued)		Master Investment Portfolio

As of June 30, 2015, the following table is a summary of the LifePath Index Master Portfolios’ securities lending agreements by counterparty, which are subject to offset under an MSLA:


LifePath Index 2020 Master Portfolio
Counterparty	Securities Loaned at Value		Cash Collateral Received¹			Net Amount
UBS Securities LLC	$	257,715	$	(257,715	)		—


LifePath Index 2035 Master Portfolio
Counterparty	Securities Loaned at Value		Cash Collateral Received¹			Net Amount
UBS Securities LLC	$	545,904	$	(545,904	)		—


LifePath Index 2040 Master Portfolio
Counterparty	Securities Loaned at Value		Cash Collateral Received¹			Net Amount
SG Americas Securities LLC	$	44,820	$	(44,820	)		—


LifePath Index 2045 Master Portfolio
Counterparty	Securities Loaned at Value		Cash Collateral Received¹			Net Amount
Morgan Stanley & Co. LLC	$	93,687	$	(93,687	)		—


LifePath Index 2050 Master Portfolio
Counterparty	Securities Loaned at Value		Cash Collateral Received¹			Net Amount
UBS Securities LLC	$	259,869	$	(259,869	)		—


LifePath Index 2055 Master Portfolio
Counterparty	Securities Loaned at Value		Cash Collateral Received¹			Net Amount
SG Americas Securities LLC	$	4,440,086	$	(4,440,086	)		—
UBS Securities LLC		44,088		(44,088	)		—

Total	$	4,484,174	$	(4,484,174	)		—

Collateral has been received in connection with securities lending agreements as follows. Collateral received in excess of the value of securities loaned from the individual counterparty is not shown for financial reporting purposes.

LifePath Index 2020
Master Portfolio

LifePath Index 2035

Master Portfolio

LifePath Index 2040

Master Portfolio

LifePath Index 2045

Master Portfolio

LifePath Index 2050

Master Portfolio

LifePath Index 2055

Master Portfolio

$263,580

$556,200

$45,900

$95,625

$264,770

$4,578,694

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 LifePath Index Master Portfolios benefit from a borrower default indemnity provided by BlackRock. BlackRock’s indemnity allows for full replacement of the securities loaned if the collateral received does not cover the value on the securities loaned in the event of borrower default. Each LifePath Index Master Portfolio could suffer 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.

4. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock for 1940 Act purposes.

MIP, on behalf of the LifePath Index Master Portfolios, entered into an Investment Advisory Agreement with BFA, the LifePath Index Master Portfolios’ investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory services. Pursuant to the Investment Advisory Agreement with MIP, the Manager is responsible for the management of each LifePath Index Master Portfolio’s investments and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of each LifePath Index Master Portfolio. For such services, each LifePath Index Master Portfolio pays BFA a monthly fee based on a percentage of each LifePath Index Master Portfolio’s average daily net assets at an annual rate of 0.05%.



BLACKROCK FUNDS III	JUNE 30, 2015	101


Notes to Financial Statements (continued)		Master Investment Portfolio

MIP, on behalf of the LifePath Index Master Portfolios, entered into an Administration Agreement with BlackRock Advisors, LLC (“BAL” or the “Administrator”), which has agreed to provide general administration services (other than investment advice and related portfolio activities). BAL, in consideration thereof, has agreed to bear all of the LifePath Index Master Portfolios’ and MIP’s ordinary operating expenses, excluding, generally, investment advisory fees, distribution fees, brokerage and other expenses related to the execution of portfolio transactions, extraordinary expenses and certain other expenses which are borne by the LifePath Index Master Portfolios.

From time to time, BAL may waive such fees in whole or in part. Any such waiver will reduce the expenses of the LifePath Index Master Portfolio and, accordingly, have a favorable impact on its performance. BAL may delegate certain of its administration duties to sub-administrators.

BAL is not entitled to compensation for providing administration services to the LifePath Index Master Portfolios, for so long as BAL is entitled to compensation for providing administration services to corresponding feeder funds that invest substantially all of their assets in the LifePath Index Master Portfolios, or BAL (or an affiliate) receives investment advisory fees from the LifePath Index Master Portfolios.

The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the LifePath Index Master Portfolios pay to the Manager indirectly through their investments in affiliated money market funds. However, the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid in connection with the LifePath Index Master Portfolios’ investment in other affiliated investment companies, if any. These amounts are included in fees waived by the Manager in the Statements of Operations. For the six months ended June 30, 2015, the amounts waived were as follows:

LifePath
Index
Retirement
Master
Portfolio

LifePath

Index 2020

Master

Portfolio

LifePath

Index 2025

Master

Portfolio

LifePath

Index 2030

Master

Portfolio

LifePath

Index 2035

Master

Portfolio

LifePath

Index 2040

Master

Portfolio

LifePath

Index 2045

Master

Portfolio

LifePath

Index 2050

Master

Portfolio

LifePath

Index 2055

Master

Portfolio

$310

$781

$505

$855

$394

$577

$244

$65

$93

The U.S. Securities and Exchange Commission has issued an exemptive order which permits BTC, an affiliate of the Manager, to serve as securities lending agent for the LifePath Index Master Portfolios, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending. The LifePath Index Master Portfolios are responsible for fees in connection with the investment of cash collateral received for securities on loan in a money market fund managed by the Manager or its affiliates, however, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees the LifePath Index Master Portfolios bear to an annual rate of 0.04% (the “collateral investment fees”).

Pursuant to a securities lending agreement, each LifePath Index Master Portfolio retains 80% of securities lending income, and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees. In addition, commencing the business day following the date that the aggregate securities lending income earned across certain funds in the Equity-Liquidity Complex in a calendar year exceeds a specified threshold, each LifePath Index Master Portfolio, pursuant to the securities lending agreement, will retain for the remainder of the calendar year securities lending income in an amount equal to 70% of securities lending income, and this amount retained can never be less than 85% of the total of securities lending income plus the collateral investment fees.

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 fees. Each LifePath Index Master Portfolio retains a portion of securities lending income and remits a remaining portion to BTC as compensation for its services as securities lending agent.

The share of securities lending income earned by each LifePath Index Master Portfolio is shown as securities lending — affiliated — net in the Statements of Operations. For the six months ended June 30, 2015, each LifePath Index Master Portfolio paid BTC the following amounts in total for securities lending agent services and collateral investment fees.

LifePath

Index
Retirement

Master

Portfolio

LifePath

Index 2020

Master

Portfolio

LifePath

Index 2025

Master

Portfolio

LifePath

Index 2030

Master

Portfolio

LifePath

Index 2035

Master

Portfolio

LifePath

Index 2040

Master

Portfolio

LifePath

Index 2045

Master

Portfolio

LifePath

Index 2050

Master

Portfolio

LifePath

Index 2055

Master

Portfolio

$649

$1,661

$2,982

$1,328

$833

$940

$360

$2,029

$250

Each LifePath Index Master Portfolio may invest its positive cash balances in certain money market funds managed by the Manager or an affiliate. The income earned on these temporary cash investments is shown as income-affiliated in the Statements of Operations.

Certain officers and/or trustees of MIP are officers and/or directors of BlackRock or its affiliates.



102	BLACKROCK FUNDS III	JUNE 30, 2015


Notes to Financial Statements (continued)		Master Investment Portfolio

5. Purchases and Sales:

For the six months ended June 30, 2015, purchases and sales of investments in the Underlying Funds and Underlying Master Portfolios, excluding short-term securities, were as follows:


	LifePath Index Retirement Master Portfolio		LifePath Index 2020 Master Portfolio		LifePath Index 2025 Master Portfolio		LifePath Index 2030 Master Portfolio		LifePath Index 2035 Master Portfolio		LifePath Index 2040 Master Portfolio		LifePath Index 2045 Master Portfolio		LifePath Index 2050 Master Portfolio		LifePath Index 2055 Master Portfolio
Purchases		$76,987,284		$198,228,467		$141,361,360		$207,732,213		$99,635,321		$147,689,535		$65,975,532		$80,547,671		$29,352,304
Sales		$41,044,434		$ 62,212,270		$ 40,484,856		$ 49,729,052		$30,049,665		$ 33,678,536		$17,689,263		$21,949,940		$ 8,350,545

6. Income Tax Information:

Each LifePath Index Master Portfolio is classified as a partnership for federal income tax purposes. As such, each investor in the LifePath Index Master Portfolio is treated as the owner of its proportionate share of net assets, income, expenses and realized and unrealized gains and losses of the LifePath Index Master Portfolio. Therefore, no federal income tax provision is required. It is intended that each LifePath Index Master Portfolio’s assets will be managed so an investor in the LifePath Index Master Portfolio can satisfy the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended.

Each LifePath Index Master Portfolio 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 LifePath Index Master Portfolios’ U.S. federal tax returns remains open for each of the four years ended December 31, 2014. The statutes of limitations on the LifePath Index Master Portfolios’ 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 LifePath Index Master Portfolios as of June 30, 2015, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the LifePath Index Master Portfolios’ financial statements.

As of June 30, 2015, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:


	LifePath Index Retirement Master Portfolio			LifePath Index 2020 Master Portfolio			LifePath Index 2025 Master Portfolio			LifePath Index 2030 Master Portfolio			LifePath Index 2035 Master Portfolio			LifePath Index 2040 Master Portfolio			LifePath Index 2045 Master Portfolio			LifePath Index 2050 Master Portfolio			LifePath Index 2055 Master Portfolio
Tax cost		$442,384,367			$958,166,554			$591,210,058			$913,857,405			$454,742,077			$617,783,618			$262,185,175			$279,123,883			$84,106,696

Gross unrealized appreciation		31,881,563			74,898,555			38,813,839			79,647,988			34,867,449			56,159,098			19,715,350			20,067,515			5,657,855
Gross unrealized depreciation		(2,107,368	)		(3,699,052	)		(2,247,469	)		(3,733,149	)		(2,103,660	)		(3,607,177	)		(1,882,803	)		(2,220,567	)		(831,635	)

Net unrealized appreciation		$29,774,195			$71,199,503			$36,566,370			$75,914,839			$32,763,789			$52,551,921			$17,832,547			$17,846,948			$4,826,220

7. Bank Borrowings:

MIP, on behalf of the LifePath Index Master Portfolios, along with certain other funds managed by the Manager and its affiliates (“Participating Funds”), is a party to a 364-day, $2.1 billion credit agreement with a group of lenders, under which the LifePath Index Master Portfolios may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the LifePath Index Master Portfolios, can borrow up to an aggregate commitment amount of $1.6 billion, subject to asset coverage and other limitations as specified in the agreement. The credit agreement has the following terms: a fee of 0.06% 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 2016 unless extended or renewed. Participating Funds paid administration, legal and arrangement fees, which are included in miscellaneous expenses in the Statements of Operations, and along with commitment 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 June 30, 2015, the LifePath Index Master Portfolios did not borrow under the credit agreement.

8. Principal Risks:

In the normal course of business, certain LifePath Index Master Portfolios invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations, including to pay principal and interest when due (issuer credit risk). The value of securities held by the LifePath Index Master Portfolios may decline in response to certain events, including those directly involving the issuers whose securities are owned by the LifePath Index Master Portfolios; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency, interest rate and price fluctuations. Similar to issuer credit risk, the LifePath Index



BLACKROCK FUNDS III	JUNE 30, 2015	103


Notes to Financial Statements (concluded)		Master Investment Portfolio

Master Portfolios may be exposed to counterparty credit risk, or the risk that an entity with which the LifePath Index Master Portfolios have unsettled or open transactions may fail to or be unable to perform on its commitments. The LifePath Index Master Portfolios manage counterparty credit risk by entering into transactions only with counterparties that the Manager believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the LifePath Index Master Portfolios to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the LifePath Index Master Portfolios’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Statements of Assets and Liabilities, less any collateral held by the LifePath Index Master Portfolios.

9. Subsequent Events:

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



104	BLACKROCK FUNDS III	JUNE 30, 2015


Disclosure of Investment Advisory Agreement

The Board of Trustees of Master Investment Portfolio (the “Master Fund”) met in person on April 21, 2015 (the “April Meeting”) and May 18-20, 2015 (the “May Meeting”) to consider the approval of the investment advisory agreement (the “Agreement”) between the Master Fund, on behalf of LifePath Index Retirement Master Portfolio, LifePath Index 2020 Master Portfolio, LifePath Index 2025 Master Portfolio, LifePath Index 2030 Master Portfolio, LifePath Index 2035 Master Portfolio, LifePath Index 2040 Master Portfolio, LifePath Index 2045 Master Portfolio, LifePath Index 2050 Master Portfolio and LifePath Index 2055 Master Portfolio (each, a “Master Portfolio” and collectively, the “Master Portfolios”), each a series of the Master Fund, and BlackRock Fund Advisors (the “Manager” or “BlackRock”), the Master Fund’s investment advisor. Each of BlackRock LifePath Index Retirement Fund, BlackRock LifePath Index 2020 Fund, BlackRock LifePath Index 2025 Fund, BlackRock LifePath Index 2030 Fund, BlackRock LifePath Index 2035 Fund, BlackRock LifePath Index 2040 Fund, BlackRock LifePath Index 2045 Fund, BlackRock LifePath Index 2050 Fund and BlackRock LifePath Index 2055 Fund (each, a “Portfolio” and collectively, the “Portfolios”), each a series of BlackRock Funds III (the “Fund”), is a “feeder” fund that invests all of its investable assets in the corresponding Master Portfolio. Accordingly, the Board of Trustees of the Fund also considered the approval of the Agreement with respect to each Master Portfolio. For simplicity: (a) the Board of Trustees of the Master Fund and the Board of Trustees of the Fund are referred to herein collectively as the “Board,” and the members are referred to as “Board Members;” and (b) the shareholders of each Portfolio and the interest holders of each Master Portfolio are referred to as “shareholders.”

Activities and Composition of the Board

The Agreement

Pursuant to the 1940 Act, the Board is required to consider the continuation of the Agreement on an annual basis. The Board has four quarterly meetings per year, each extending over two days, a fifth one-day meeting to consider specific information surrounding the consideration of renewing the Agreement, and additional in-person and telephonic meetings as needed. In connection with this year-long deliberative process, the Board assessed, among other things, the nature, extent and quality of the services provided to the Master Portfolios and the Portfolios by BlackRock, BlackRock’s personnel and affiliates, including (as applicable) investment management services; administrative and shareholder services; the oversight of fund service providers; marketing services; risk oversight; compliance; and ability to meet applicable legal and regulatory requirements.

The Board, acting directly and through its committees, considers at each of its meetings, and from time to time as appropriate, factors that are relevant to its annual consideration of the renewal of the Agreement, including the services and support provided by BlackRock to the Master Portfolios, the Portfolios and their shareholders. Among the matters the Board considered were: (a) investment performance for one-year, three-year, five-year and/or since inception periods, as applicable, against peer funds, applicable benchmark, and performance metrics, as applicable, as well as senior management’s and portfolio managers’ analysis of the reasons for any over performance or underperformance of a Master Portfolio/Portfolio relative to its peers, benchmark, and other performance metrics, as applicable; (b) fees, including advisory, administration, if applicable, and other amounts paid to BlackRock and its affiliates by the Master Portfolios and/or the Portfolios for services, such as marketing and distribution, call center and fund accounting; (c) the Master Portfolios’ and /or the Portfolios’ operating expenses and how BlackRock allocates expenses to the Master Portfolios and the Portfolios; (d) the resources devoted to, risk oversight of, and compliance reports relating to, implementation of each Master Portfolio’s and Portfolio’s investment objective(s), policies and restrictions, and meeting new regulatory requirements; (e) the Master Fund’s and the Fund’s compliance with its respective compliance policies and procedures; (f) the nature, cost and character of non-investment management services provided by BlackRock and its affiliates; (g) BlackRock’s and other service providers’ internal controls and risk and compliance oversight mechanisms; (h) BlackRock’s implementation of the proxy voting policies approved by the Board; (i) the use of brokerage commissions and execution quality of portfolio transactions; (j) BlackRock’s implementation of the Master Fund’s and/or the Fund’s valuation and liquidity procedures; (k) an analysis of management fees for products with similar investment mandates across the open-end fund, exchange-traded fund (“ETF”), closed-end fund and institutional account product channels, as applicable, and the similarities and differences between these products and the services provided as compared to the Master Portfolios and/or the Portfolios; (l) BlackRock’s compensation methodology for its investment professionals and the incentives it creates, along with investment professionals’ investments in the fund(s) they manage; and (m) periodic updates on BlackRock’s business.



BLACKROCK FUNDS III	JUNE 30, 2015	105


Disclosure of Investment Advisory Agreement (continued)

funds’ portfolio risk targets; and management fee levels and breakpoints. The Board further discussed with BlackRock: BlackRock’s management structure; portfolio turnover, execution quality and use of soft dollars; BlackRock’s portfolio manager compensation and performance accountability; marketing support for the funds; services provided to the funds by BlackRock affiliates; and BlackRock’s oversight of relationships with third party service providers.

Board Considerations in Approving the Agreement

The Approval Process: Prior to the April Meeting, the Board requested and received materials specifically relating to the Agreement. The Board is continuously engaged in a process with its independent legal counsel and BlackRock to review the nature and scope of the information provided to better assist its deliberations. The materials provided in connection with the April Meeting included (a) information independently compiled and prepared by Lipper, Inc. (“Lipper”) on fees and expenses of each Master Portfolio and Portfolio, as applicable, as compared with a peer group of funds as determined by Lipper (“Expense Peers”) and the investment performance of each Portfolio as compared with a peer group of funds as determined by Lipper¹, as well as the gross investment performance of each Portfolio as compared with its benchmark; (b) information on the profits realized by BlackRock and its affiliates pursuant to the Agreement and a discussion of fall-out benefits to BlackRock and its affiliates; (c) a general analysis provided by BlackRock concerning investment management fees charged to other clients, such as institutional clients, sub-advised mutual funds, ETFs and closed-end funds, under similar investment mandates, as well as the performance of such other clients, as applicable; (d) review of non-management fees; (e) the existence, impact and sharing of potential economies of scale; (f) a summary of aggregate amounts paid by each Master Portfolio and/or Portfolio to BlackRock; (g) sales and redemption data regarding each Portfolio’s shares; and (h) if applicable, a comparison of management fees to similar BlackRock open-end funds, as classified by Lipper.

At the May Meeting, the Board of the Master Fund, including the Independent Board Members, approved the continuation of the Agreement between the Manager and the Master Fund with respect to each Master Portfolio for a one-year term ending June 30, 2016. The Board of the Fund, including the Independent Board Members, also considered the continuation of the Agreement with respect to each Master Portfolio and found the Agreement to be satisfactory. In approving the continuation of the Agreement, the Board of the Master Fund considered: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of each Master Portfolio, each Portfolio and BlackRock; (c) the advisory fee and the cost of the services and profits to be realized by BlackRock and its affiliates from their relationship with the Master Portfolios and the Portfolios; (d) each Portfolio’s costs to investors compared to the costs of Expense Peers and performance compared to the relevant performance comparison as previously discussed; (e) the sharing of potential economies of scale; (f) fall-out benefits to BlackRock and its affiliates as a result of its relationship with the Master Portfolios and the Portfolios; and (g) other factors deemed relevant by the Board Members.

The Board also considered other matters it deemed important to the approval process, such as payments made to BlackRock or its affiliates relating to the distribution of Portfolio shares, securities lending and cash management, services related to the valuation and pricing of portfolio holdings of each Master Portfolio, direct and indirect benefits to BlackRock and its affiliates from their relationship with the Master Portfolios and the Portfolios and advice from independent legal counsel with respect to the review process and materials submitted for the Board’s review. The Board noted the willingness of BlackRock personnel to engage in open, candid discussions with the Board. The Board did not identify any particular information as determinative, and each Board Member may have attributed different weights to the various items considered.

A. Nature, Extent and Quality of the Services Provided by BlackRock: The Board, including the Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of each Portfolio. Throughout the year, the Board compared each Portfolio’s performance to the performance of a comparable group of mutual funds, relevant benchmark, and performance metrics, as applicable. The Board met with BlackRock’s senior management personnel responsible for investment activities, including the senior investment officers. The Board also reviewed the materials provided by each Master Portfolio’s portfolio management team discussing the relevant Master Portfolio’s performance and the Master Portfolio’s investment objective(s), strategies and outlook.



106	BLACKROCK FUNDS III	JUNE 30, 2015

Funds are ranked by Lipper in quartiles, ranging from first to fourth, where first is the most desirable quartile position and fourth is the least desirable.


Disclosure of Investment Advisory Agreement (continued)

necessary for the operations of the Master Portfolios and the Portfolios. In particular, BlackRock and its affiliates provide the Master Portfolios and the Portfolios with the following administrative services, including, among others: (i) preparing disclosure documents, such as the prospectus, the summary prospectus (as applicable), the statement of additional information and periodic shareholder reports; (ii) oversight of daily accounting and pricing; (iii) overseeing and coordinating the activities of other service providers; (iv) organizing Board meetings and preparing the materials for such Board meetings; (v) providing legal and compliance support; (vi) furnishing analytical and other support to assist the Board in its consideration of strategic issues such as the merger, consolidation or repurposing of certain open-end funds; and (vii) performing other administrative functions necessary for the operation of the Master Portfolios and the Portfolios, such as tax reporting, fulfilling regulatory filing requirements and call center services. The Board reviewed the structure and duties of BlackRock’s fund administration, shareholder services, legal and compliance departments and considered BlackRock’s policies and procedures for assuring compliance with applicable laws and regulations.

B. The Investment Performance of the Master Portfolios, the Portfolios and BlackRock: The Board, including the Independent Board Members, also reviewed and considered the performance history of each Master Portfolio and Portfolio, as applicable. The Board noted that each Portfolio’s investment results correspond directly to the investment results of the applicable Master Portfolio. In preparation for the April Meeting, the Board worked with its independent legal counsel, BlackRock and Lipper to develop a template for, and was provided with, reports independently prepared by Lipper, which included a comprehensive analysis of each Portfolio’s performance. The Board also reviewed a narrative and statistical analysis of the Lipper data that was prepared by BlackRock. In connection with its review, the Board received and reviewed information regarding the investment performance of each Portfolio as compared to other funds in its applicable Lipper category and the gross investment performance of each Portfolio as compared with its benchmark. The Board was provided with a description of the methodology used by Lipper to select peer funds and periodically meets with Lipper representatives to review its methodology. The Board and its Performance Oversight and Contract Committee regularly review, and meet with Master Portfolio management to discuss, the performance of each Master Portfolio and Portfolio, as applicable, throughout the year.

The Board noted that for each of the one-year, three-year and since-inception periods reported, each Portfolio’s gross performance (before expenses and fees), as agreed upon by the Board, was within tolerance of its benchmark. BlackRock believes that gross performance relative to the pertinent benchmark is an appropriate performance metric for each of the Portfolios.

C. Consideration of the Advisory/Management Fees and the Cost of the Services and Profits to be Realized by BlackRock and its Affiliates from their Relationship with the Master Portfolios and the Portfolios: The Board, including the Independent Board Members, reviewed each Master Portfolio’s/Portfolio’s contractual management fee rate compared with the other funds in the Portfolio’s Lipper category. The contractual management fee rate represents a combination of the advisory fee and any administrative fees, before taking into account any reimbursements or fee waivers. The Board also compared each Portfolio’s total expense ratio, as well as each Master Portfolio’s/Portfolio’s actual management fee rate, to those of other funds in the Portfolio’s Lipper category. The total expense ratio represents a fund’s total net operating expenses, including any 12b-1 or non-12b-1 service fees. The total expense ratio gives effect to any expense reimbursements or fee waivers that benefit a fund, and the actual management fee rate gives effect to any management fee reimbursements or waivers that benefit a fund. The Board considered the services provided and the fees charged by BlackRock and its affiliates to other types of clients with similar investment mandates, as applicable, including institutional accounts and sub-advised mutual funds.



BLACKROCK FUNDS III	JUNE 30, 2015	107


Disclosure of Investment Advisory Agreement (continued)

affiliates. As part of its analysis, the Board reviewed BlackRock’s methodology in allocating its costs to the management of the Master Portfolios and the Portfolios. The Board may periodically receive and review information from independent third parties as part of its annual evaluation. BlackRock retained an independent third party to evaluate its cost allocation methodologies in the context of BlackRock’s 1940 Act Fund business. The Board considered the results of that evaluation in connection with BlackRock’s profitability reporting. The Board also considered whether BlackRock has the financial resources necessary to attract and retain high quality investment management personnel to perform its obligations under the Agreement and to continue to provide the high quality of services that is expected by the Board. The Board further considered factors including but not limited to BlackRock’s commitment of time, assumption of risk and liability profile in servicing the Master Portfolios and the Portfolios in contrast to what is required of BlackRock with respect to other products with similar investment mandates across the open-end fund, ETF, closed-end fund, sub-advised mutual fund and institutional account product channels, as applicable.

The Board noted that the varying fee structures for fund of funds can limit the value of management fee comparisons.

The Board also noted that the contractual management fee rate of each of LifePath Index Retirement Master Portfolio/BlackRock LifePath Index Retirement Fund, LifePath Index 2025 Master Portfolio/BlackRock LifePath Index 2025 Fund, LifePath Index 2035 Master Portfolio/BlackRock LifePath Index 2035 Fund, LifePath Index 2040 Master Portfolio/BlackRock LifePath Index 2040 Fund, LifePath Index 2045 Master Portfolio/BlackRock LifePath Index 2045 Fund and LifePath Index 2050 Master Portfolio/BlackRock LifePath Index 2050 Fund ranked in the first quartile. The Board also noted that the actual management fee rate of each of these Master Portfolios/Portfolios and the total expense ratio of each of these Portfolios each ranked in the first quartile, relative to the relevant Portfolio’s Expense Peers.

The Board also noted that the contractual management fee rate of each of LifePath Index 2020 Master Portfolio/BlackRock LifePath Index 2020 Fund and LifePath Index 2030 Master Portfolio/BlackRock LifePath Index 2030 Fund ranked in the first quartile. The Board also noted that the actual management fee rate of each of these Master Portfolios/Portfolios and the total expense ratio of each of these Portfolios ranked in the second and first quartiles, respectively, relative to the relevant Portfolio’s Expense Peers.

The Board also noted that LifePath Index 2055 Master Portfolio’s/BlackRock LifePath Index 2055 Fund’s contractual management fee rate ranked first out of four funds, and that the actual management fee rate and the Portfolio’s total expense ratio ranked first out of four funds and in the first quartile, respectively, relative to the Portfolio’s Expense Peers.

The Board also noted that, with respect to each Portfolio, BlackRock has contractually agreed to a cap on the Portfolio’s total expenses as a percentage of the Portfolio’s average daily net assets on a class-by-class basis. The Board further noted that with respect to BlackRock LifePath Index 2035 Fund, BlackRock LifePath Index 2040 Fund, BlackRock LifePath Index 2045 Fund, BlackRock LifePath Index 2050 Fund and BlackRock LifePath Index 2055 Fund, BlackRock proposed, and the Board agreed to, a lower contractual expense cap on each of these Portfolios on a class-by-class basis. This expense cap reduction was implemented on April 30, 2015.

D. Economies of Scale: The Board, including the Independent Board Members, considered the extent to which economies of scale might be realized as the assets of the Master Portfolios and the Portfolios increase, as well as the existence of expense caps, as applicable. The Board also considered the extent to which the Master Portfolios and the Portfolios benefit from such economies and whether there should be changes in the advisory fee rate or breakpoint structure in order to enable the Master Portfolios and the Portfolios to participate in these economies of scale, for example through the use of breakpoints in the advisory fee based upon the asset level of the Master Portfolios. In their consideration, the Board Members took into account the existence of any expense caps and further considered the continuation and/or implementation, as applicable, of such caps.

E. Other Factors Deemed Relevant by the Board Members: The Board, including the Independent Board Members, also took into account other ancillary or “fall-out” benefits that BlackRock or its affiliates may derive from their respective relationships with the Master Portfolios and the Portfolios, both tangible and intangible, such as BlackRock’s ability to leverage its investment professionals who manage other portfolios and risk management personnel, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates as service providers to the Master Portfolios and the Portfolios, including for administrative, distribution, securities lending and cash management services. The Board also considered BlackRock’s overall operations and its efforts to expand the scale of, and improve the quality of, its operations. The Board also noted that BlackRock may use and benefit from third party research obtained by soft dollars generated by certain registered fund transactions to assist in managing all or a number of its other client accounts. The Board further noted that it had considered the investment by BlackRock’s funds in affiliated ETFs without any offset against the management fees payable by the funds to BlackRock.



108	BLACKROCK FUNDS III	JUNE 30, 2015


Disclosure of Investment Advisory Agreement (concluded)

Conclusion



BLACKROCK FUNDS III	JUNE 30, 2015	109


Officers and Trustees

Rodney D. Johnson, Chair of the Board and Trustee

David O. Beim, Trustee

Collette Chilton, Trustee

Frank J. Fabozzi, Trustee

Dr. Matina S. Horner, Trustee

Herbert I. London, Trustee

Cynthia A. Montgomery, Trustee

Barbara G. Novick, Trustee

Joseph P. Platt, Trustee

Robert C. Robb, Jr., Trustee

Toby Rosenblatt, Trustee

Mark Stalnecker, Trustee

Kenneth L. Urish, Trustee

Frederick W. Winter, Trustee

John M. Perlowski, President and Chief Executive Officer

Richard Hoerner, CFA, Vice President

Jennifer McGovern, Vice President

Neal Andrews, Chief Financial Officer

Jay Fife, Treasurer

Charles Park, Chief Compliance Officer

Fernanda Piedra, Anti-Money Laundering Compliance Officer

Benjamin Archibald, Secretary

Effective March 1, 2015, Charles Park resigned as Anti-Money Laundering Compliance Officer of the Trust/MIP and Fernanda Piedra became Anti-Money Laundering Compliance Officer of the Trust/MIP.

Effective May 18, 2015, Ian MacKinnon resigned as a Trustee of the Trust/MIP.



Investment Advisor BlackRock Fund Advisors San Francisco, CA 94105	Custodian and Accounting Agent State Street Bank and Trust Company Boston, MA 02110	Distributor BlackRock Investments, LLC New York, NY 10022	Legal Counsel Sidley Austin LLP New York, NY 10019

Administrator BlackRock Advisors, LLC Wilmington, DE 19809	Transfer Agent BNY Mellon Investment Servicing (US) Inc. Wilmington, DE 19809	Independent Registered Public Accounting Firm PricewaterhouseCoopers LLP Philadelphia, PA 19103	Address of the Trust/MIP 400 Howard Street San Francisco, CA 94105



110	BLACKROCK FUNDS III	JUNE 30, 2015


Additional Information

General Information

Householding

The LifePath Index Funds will mail only one copy of shareholder documents, including prospectuses, annual and semi-annual reports 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 LifePath Index Funds at (800) 441-7762.

Availability of Quarterly Schedule of Investments

The LifePath Index Funds/LifePath Index Master Portfolios file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The LifePath Index Funds’/LifePath Index Master Portfolios’ Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The LifePath Index Funds’/ LifePath Index Master Portfolios’ Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762.

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the LifePath Index Funds/LifePath Index Master Portfolios use to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling (800) 441-7762; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.

Availability of Proxy Voting Record

Information about how the LifePath Index Funds/LifePath Index Master Portfolios voted proxies relating to securities held in the LifePath Index Funds’/LifePath Index Master Portfolios’ portfolios during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com or by calling (800) 441-7762 and (2) on the SEC’s website at http://www.sec.gov.

BlackRock’s Mutual Fund Family

Shareholder Privileges

Account Information

Automatic Investment Plans

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

Systematic Withdrawal Plans

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

Retirement Plans

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



BLACKROCK FUNDS III	JUNE 30, 2015	111


Additional Information (concluded)

BlackRock Privacy Principles



112	BLACKROCK FUNDS III	JUNE 30, 2015

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 a LifePath Index Fund unless preceded or accompanied by that LifePath Index 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.

LOGO


LPindex-6/15-SAR

JUNE 30, 2015

SEMI-ANNUAL REPORT (UNAUDITED)

BlackRock Large Cap Index Fund | of BlackRock Funds III

Not FDIC Insured • May Lose Value • No Bank Guarantee


Table of Contents


	Page
The Markets in Review		3
Semi-Annual Report:
Fund Summary		4
About Fund Performance		6
Disclosure of Expenses		6
Derivative Financial Instruments		6
Fund Financial Statements:
Statement of Assets and Liabilities		7
Statement of Operations		8
Statements of Changes in Net Assets		9
Fund Financial Highlights		10
Fund Notes to Financial Statements		13
Master Portfolio Information		16
Master Portfolio Financial Statements:
Schedule of Investments		17
Statement of Assets and Liabilities		29
Statement of Operations		30
Statements of Changes in Net Assets		31
Master Portfolio Financial Highlights		32
Master Portfolio Notes to Financial Statements		33
Disclosure of Investment Advisory Agreement		38
Officers and Directors		43
Additional Information		44

LOGO



2	BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015

The Markets in Review

Dear Shareholder,

Sincerely,

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

LOGO

Rob Kapito

President, BlackRock Advisors, LLC


Total Returns as of June 30, 2015
	6-month			12-month
U.S. large cap equities (S&P 500^® Index)		1.23	%		7.42	%
U.S. small cap equities (Russell 2000^® Index)		4.75			6.49
International equities (MSCI Europe, Australasia, Far East Index)		5.52			(4.22	)
Emerging market equities (MSCI Emerging Markets Index)		2.95			(5.12	)
3-month Treasury bills (BofA Merrill Lynch 3-Month U.S. Treasury Bill Index)		0.01			0.02
U.S. Treasury securities (BofA Merrill Lynch 10-Year U.S. Treasury Index)		(0.51	)		3.79
U.S. investment-grade bonds (Barclays U.S. Aggregate Bond Index)		(0.10	)		1.86
Tax-exempt municipal bonds (S&P Municipal Bond Index)		0.01			3.00
U.S. high yield bonds (Barclays U.S. Corporate High Yield 2% Issuer Capped Index)		2.53			(0.39	)
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.



		THIS PAGE NOT PART OF YOUR FUND REPORT				3


Fund Summary as of June 30, 2015


Investment Objective

BlackRock Large Cap Index Fund’s (the “Fund”) (formerly known as BlackRock Russell 1000^® Index Fund) investment objective is to match the performance of the Russell 1000^® Index as closely as possible before the deduction of Fund expenses.

Portfolio Management Commentary

How did the Fund perform?

•

For the six months ended June 30, 2015, the Fund’s Institutional Shares returned 1.60%, Investor A Shares returned 1.47% and Class K Shares returned 1.62%. The benchmark Russell 1000^® Index returned 1.71% for the same period.

•

Returns for the Fund’s respective share classes differ from the benchmark index based on individual share-class expenses. The Fund invests all of its assets in Large Cap Index Master Portfolio (the “Master Portfolio”) (formerly known as Russell 1000^® Index Master Portfolio), a series of Master Investment Portfolio.

Describe the market environment.

•

The year started with U.S. stock prices falling as lower oil prices punished the energy sector and the negative impact of a stronger dollar began to show in the earnings of large global exporting companies. High valuations in U.S. stocks drove equity investors toward more appealing opportunities overseas. U.S. stocks rebounded in February thanks to increased merger and acquisition activity and strong earnings reports from cyclical technology companies. However, stock prices came under pressure again in March as an improving labor market furthered the appreciation of the U.S. dollar and raised investors’ focus on the timing of an expected Federal Reserve move toward tightening policy. U.S. equities came back into favor in April, after a powerful rally in European equities left valuations in the United States looking more appealing by comparison. U.S. stocks continued to outperform international markets in the following months as increasing turmoil around Greece’s debt troubles drove investors to the relative stability of U.S. markets.

•

A clear sign of strength has yet to emerge from the blurry U.S. economic picture, as uptrends in the housing and labor markets stand in contrast with consumer caution and productivity languor. This economic unevenness together with still quiescent inflation has kept the Federal Reserve tentative on when to start raising short-term interest rates. However, hiring strength and a modest but concrete pickup in wage growth point to a possible acceleration in the second half of 2015. More investors are now penciling in an autumn rate hike — a significant event that could push market volatility beyond the unusually low levels of the past few years, but the investment advisor expects most of the ups and downs will be short-lived for stocks.

Describe recent portfolio activity.

•

During the period, as changes were made to the composition of the Russell 1000^® Index, the Master Portfolio purchased and sold securities to maintain its objective of replicating the risks and return of the benchmark index.

Describe portfolio positioning at period end.

•

The Master Portfolio remains positioned to match the risk characteristics of its benchmark index, irrespective of the market’s future direction.



4	BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015

Total Return Based on a $10,000 Investment

LOGO

Assuming transaction costs and other operating expenses, including administration fees, if any.

The Fund invests all of its assets in the Master Portfolio. The Master Portfolio will be substantially invested in equity securities in the Russell 1000^® Index and will invest, under normal circumstances, at least 80% of its assets in securities or other financial instruments that are components of or have economic characteristics similar to the securities included in the Russell 1000^® Index.

An index that measures the performance of the large cap segment of the U.S. equity universe. It is a subset of the Russell 3000^® Index and includes approximately 1,000 of the largest securities based on a combination of their market capitalization and current index membership. The index represents approximately 92% of the total market capitalization of the Russell 3000^® Index.

⁴

Commencement of operations.

Performance Summary for the Period Ended June 30, 2015


				Average Annual Total Returns⁵
	6-Month Total Returns			1 Year			Since Inception⁶
Institutional		1.60	%		7.15	%		13.23	%
Investor A		1.47			6.92			12.87
Class K		1.62			7.30			13.20
Russell 1000^® Index		1.71			7.37			13.38

⁵

See “About Fund Performance” on Page 6 for a detailed description of share classes, including any related sales charges and fees.

⁶

The Fund commenced operations on March 31, 2011.

Past performance is not indicative of future results.

Expense Example


	Actual						Hypothetical⁸
	Beginning Account Value January 1, 2015		Ending Account Value June 30, 2015		Expenses Paid During the Period⁷		Beginning Account Value January 1, 2015		Ending Account Value June 30, 2015		Expenses Paid During the Period⁷		Annualized Expense Ratio
Institutional	$	1,000.00	$	1,016.00	$	0.70	$	1,000.00	$	1,024.10	$	0.70		0.14	%
Investor A	$	1,000.00	$	1,014.70	$	1.95	$	1,000.00	$	1,022.86	$	1.96		0.39	%
Class K	$	1,000.00	$	1,016.20	$	0.45	$	1,000.00	$	1,024.35	$	0.45		0.09	%

⁷

⁸

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

See “Disclosure of Expenses” on page 6 for further information on how expenses were calculated.



BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015	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.

•

Performance information reflects past performance and does not guarantee future results. Current performance may be lower or higher than the performance data quoted. Refer to www.blackrock.com/funds 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. 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 administration and distribution fees applicable to each class, which are deducted from the income available to be paid to shareholders. BlackRock Advisors, LLC (the “Administrator”), the Fund’s administrator, has contractually agreed to waive and/or reimburse a portion of the Fund’s expenses. Without such waiver and/or reimbursement, the Fund’s performance would have been lower. The Administrator is under no obligation to continue waiving and/or reimbursing its fees after the applicable termination date of such agreement. See Note 3 of the Notes to Financial Statements for additional information on waivers and/or reimbursements.

Disclosure of Expenses

Derivative Financial Instruments



6	BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015


Statement of Assets and Liabilities		BlackRock Large Cap Index Fund


June 30, 2015 (Unaudited)

Assets
Investments at value — Master Portfolio (cost — $67,797,216)	$	95,922,522
Receivables:
Capital shares sold		622,029
From administrator		23,676
Prepaid expenses		29,858

Total assets		96,598,085


Liabilities
Payables:
Contributions to the Master Portfolio		612,648
Income dividends		440,209
Capital shares redeemed		9,083
Service fees		3,554
Administration fees		797
Officer’s fees		14
Other accrued expenses payable		41,949

Total liabilities		1,108,254

Net Assets	$	95,489,831


Net Assets Consist of
Paid-in capital	$	67,981,377
Undistributed net investment income		9,008
Accumulated net realized loss allocated from the Master Portfolio		(625,860	)
Net unrealized appreciation allocated from the Master Portfolio		28,125,306

Net Assets	$	95,489,831


Net Asset Value
Institutional — Based on net assets of $1,776,826 and 120,028 shares outstanding, unlimited number of shares authorized, no par value	$	14.80

Investor A — Based on net assets of $17,390,362 and 1,180,273 shares outstanding, unlimited number of shares authorized, no par value	$	14.73

Class K — Based on net assets of $76,322,643 and 5,173,307 shares outstanding, unlimited number of shares authorized, no par value	$	14.75


Statement of Operations		BlackRock Large Cap Index Fund


Six Months Ended June 30, 2015 (Unaudited)

Investment Income
Net investment income allocated from the Master Portfolio:
Dividends — unaffiliated	$	877,423
Dividends — affiliated		4,686
Foreign taxes withheld		(347	)
Securities lending — affiliated — net		10,039
Interest — affiliated		1,940
Expenses		(23,854	)
Fees waived		777

Total income		870,664


Fund Expenses
Administration		4,707
Service — Investor A		20,773
Transfer agent — Institutional		456
Transfer agent — Investor A		6,296
Registration		24,411
Professional		26,883
Printing		10,044
Miscellaneous		4,316

Total expenses		97,886
Less administration fees waived		(4,707	)
Less transfer agent fees waived — Institutional		(51	)
Less transfer agent fees waived — Investor A		(387	)
Less transfer agent fees reimbursed — Institutional		(59	)
Less transfer agent fees reimbursed — Investor A		(1,790	)
Less fees waived and/or reimbursed by the administrator		(44,656	)

Total expenses after fees waived and/or reimbursed		46,236

Net investment income		824,428


Realized and Unrealized Gain Allocated from the Master Portfolio
Net realized gain from investments and financial futures contracts		688,335

Net change in unrealized appreciation (depreciation) on investments and financial futures contracts		119,289

Total realized and unrealized gain		807,624

Net Increase in Net Assets Resulting from Operations	$	1,632,052


Statements of Changes in Net Assets


	BlackRock Large Cap Index Fund
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	824,428		$	1,476,837
Net realized gain		688,335			1,393,663
Net change in unrealized appreciation (depreciation)		119,289			7,399,707

Net increase in net assets resulting from operations		1,632,052			10,270,207


Distributions to Shareholders From¹
Net investment income:
Institutional		(14,301	)		(4,929	)
Investor A		(122,563	)		(210,349	)
Class K		(683,895	)		(1,260,548	)
Net realized gain:
Institutional		(2,958	)		(6,123	)
Investor A		(29,089	)		(296,423	)
Class K		(127,128	)		(1,259,884	)

Decrease in net assets resulting from distributions to shareholders		(979,934	)		(3,038,256	)


Capital Share Transactions
Net increase in net assets derived from capital share transactions		6,619,329			7,103,413


Net Assets
Total increase in net assets		7,271,447			14,335,364
Beginning of period		88,218,384			73,883,020

End of period	$	95,489,831		$	88,218,384

Undistributed net investment income, end of period	$	9,008		$	5,339

¹ Distributions for annual periods determined in accordance with federal income tax regulations.


Financial Highlights		BlackRock Large Cap Index Fund


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period March 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period March 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	14.72		$	13.49		$	10.62		$	9.40		$	10.00

Net investment income²		0.13			0.26			0.23			0.21			0.13
Net realized and unrealized gain (loss)		0.10			1.49			3.26			1.33			(0.60	)

Net increase (decrease) from investment operations		0.23			1.75			3.49			1.54			(0.47	)

Distributions from:³
Net investment income		(0.13	)		(0.25	)		(0.23	)		(0.21	)		(0.13	)
Net realized gain		(0.02	)		(0.27	)		(0.39	)		(0.11	)		(0.00	)⁴
Return of capital		—			—			—			—			(0.00	)⁴

Total distributions		(0.15	)		(0.52	)		(0.62	)		(0.32	)		(0.13	)

Net asset value, end of period	$	14.80		$	14.72		$	13.49		$	10.62		$	9.40


Total Return⁵
Based on net asset value		1.60%	⁶		13.07%			33.09%			16.42%			(4.72)%	⁶


Ratios to Average Net Assets⁷
Total expenses		0.26%	^9,10		0.59%			0.56%	⁸		0.65%	⁹		1.84%	^10,11,12

Total expenses after fees waived and/or reimbursed		0.14%	^9,10		0.16%			0.23%	⁸		0.23%	⁹		0.22%	^10,11

Net investment income		1.76%	^9,10		1.81%			1.80%	⁸		2.07%	⁹		1.86%	^10,11


Supplemental Data
Net assets, end of period (000)	$	1,777		$	363		$	183		$	28		$	24

Portfolio turnover of the Master Portfolio		4%			6%			14%			16%			10%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.0005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the Fund’s share of the Master Portfolio’s allocated gross expenses and/or net investment income.

⁸

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.01% for the year ended December 31, 2013.

⁹

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of less than 0.01%.

¹⁰

Annualized.

¹¹

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.24%.

¹²

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 1.84%.


Financial Highlights (continued)		BlackRock Large Cap Index Fund


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period March 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period March 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	14.65		$	13.43		$	10.61		$	9.39		$	10.00

Net investment income²		0.11			0.22			0.19			0.19			0.13
Net realized and unrealized gain (loss)		0.10			1.49			3.22			1.33			(0.62	)

Net increase (decrease) from investment operations		0.21			1.71			3.41			1.52			(0.49	)

Distributions from:³
Net investment income		(0.11	)		(0.22	)		(0.20	)		(0.19	)		(0.12	)
Net realized gain		(0.02	)		(0.27	)		(0.39	)		(0.11	)		(0.00	)⁴
Return of capital		—			—			—			—			(0.00	)⁴

Total distributions		(0.13	)		(0.49	)		(0.59	)		(0.30	)		(0.12	)

Net asset value, end of period	$	14.73		$	14.65		$	13.43		$	10.61		$	9.39


Total Return⁵
Based on net asset value		1.47%	⁶		12.79%			32.35%			16.18%			(4.93)%	⁶


Ratios to Average Net Assets⁷
Total expenses		0.52%	^9,10		0.57%			0.66%	⁸		0.83%	⁹		1.40%	^10,11,12

Total expenses after fees waived and/or reimbursed		0.39%	^9,10		0.41%			0.48%	⁸		0.45%	⁹		0.45%	^10,11

Net investment income		1.51%	^9,10		1.56%			1.56%	⁸		1.83%	⁹		1.80%	^10,11


Supplemental Data
Net assets, end of period (000)	$	17,390		$	17,507		$	6,454		$	2,310		$	1,918

Portfolio turnover of the Master Portfolio		4%			6%			14%			16%			10%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.0005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the Fund’s share of the Master Portfolio’s allocated gross expenses and/or net investment income.

⁸

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.01% for the year ended December 31, 2013.

⁹

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of less than 0.01%.

¹⁰

Annualized.

¹¹

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.24%.

¹²

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 1.40%.


Financial Highlights (concluded)		BlackRock Large Cap Index Fund


	Class K
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,									Period March 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			Period March 31, 2011¹ to December 31, 2011

Per Share Operating Performance
Net asset value, beginning of period	$	14.67		$	13.44		$	10.61		$	9.40		$	10.00

Net investment income²		0.13			0.26			0.23			0.22			0.13
Net realized and unrealized gain (loss)		0.10			1.50			3.22			1.32			(0.60	)

Net increase (decrease) from investment operations		0.23			1.76			3.45			1.54			(0.47	)

Distributions from:³
Net investment income		(0.13	)		(0.27	)		(0.23	)		(0.22	)		(0.13	)
Net realized gain		(0.02	)		(0.26	)		(0.39	)		(0.11	)		(0.00	)⁴
Return of capital		—			—			—			—			(0.00	)⁴

Total distributions		(0.15	)		(0.53	)		(0.62	)		(0.33	)		(0.13	)

Net asset value, end of period	$	14.75		$	14.67		$	13.44		$	10.61		$	9.40


Total Return⁵
Based on net asset value		1.62%	⁶		13.17%			32.80%			16.37%			(4.68)%	⁶


Ratio to Average Net Assets⁷
Total expenses		0.20%	^9,10		0.24%			0.33%	⁸		0.52%	⁹		1.11%	^10,11,12

Total expenses after fees waived and/or reimbursed		0.09%	^9,10		0.12%			0.18%	⁸		0.18%	⁹		0.18%	^10,11

Net investment income		1.80%	^9,10		1.83%			1.85%	⁸		2.11%	⁹		2.02%	^10,11


Supplemental Data
Net assets, end of period (000)	$	76,323		$	70,348		$	6,746		$	56,654		$	46,785

Portfolio turnover of the Master Portfolio		4%			6%			14%			16%			10%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Amount is greater than $(0.0005) per share.

⁵

Where applicable, assumes the reinvestment of distributions.

⁶

Aggregate total return.

⁷

Includes the Fund’s share of the Master Portfolio’s allocated gross expenses and/or net investment income.

⁸

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.01% for the year ended December 31, 2013.

⁹

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of less than 0.01%.

¹⁰

Annualized.

¹¹

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.24%.

¹²

Organization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 1.12%.


Notes to Financial Statements (Unaudited)				BlackRock Large Cap Index Fund

1. Organization:

BlackRock Large Cap Index Fund (formerly known as BlackRock Russell 1000^® Index Fund) (the “Fund”), a series of BlackRock Funds III (the “Trust”), is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a diversified, open-end management investment company. The Trust is organized as a Delaware statutory trust. The Fund seeks to achieve its investment objective by investing all of its assets in Large Cap Index Master Portfolio (formerly known as Russell 1000^® Index Master Portfolio) (the “Master Portfolio”), a series of Master Investment Portfolio (“MIP”), an affiliate of the Fund, which has the same investment objective and strategies as the Fund. The value of the Fund’s investment in the Master Portfolio reflects the Fund’s proportionate interest in the net assets of the Master Portfolio. The performance of the Fund is directly affected by the performance of the Master Portfolio. At June 30, 2015, the percentage of the Master Portfolio owned by the Fund was 2.8%. The financial statements of the Master Portfolio, including the Schedule of Investments, are included elsewhere in this report and should be read in conjunction with the Fund’s financial statements.

The Fund offers multiple classes of shares. Institutional and Class K Shares are sold without a sales charge and only to certain eligible investors. Investor A Shares are generally sold without a sales charge. All classes of shares have identical voting, dividend, liquidation and other rights and are subject to the same terms and conditions. Investor A Shares bear certain expenses related to shareholder servicing of such shares. Investor A Shares are generally available through financial intermediaries. Each class has exclusive voting rights with respect to matters relating to its shareholder servicing and distribution expenditures. The Board of Trustees of the Trust and Board of Trustees of MIP are referred to throughout this report as the “Board of Trustees” or the “Board” and the members are referred to as “Trustees.”

2. Significant Accounting Policies:

3. Administration Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock, Inc. (“BlackRock”) for 1940 Act purposes.

The Trust, on behalf of the Fund, entered into an Administration Agreement with BlackRock Advisors, LLC (“BAL” or the “Administrator”), an indirect, wholly owned subsidiary of BlackRock, to provide administrative services (other than investment advice and related portfolio activities). For such services, the Fund pays the Administrator a monthly fee at an annual rate of 0.01% of the average daily value of the Fund’s net assets. The Fund does not pay an investment advisory fee or investment management fee.



BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015	13


Notes to Financial Statements (continued)		BlackRock Large Cap Index Fund

BlackRock Fund Advisors (“BFA”), the investment advisor of the Master Portfolio, and BAL 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. The expense limitations as a percentage of average daily net assets are as follows: 0.13% for Institutional; 0.38% for Investor A; and 0.08% for Class K. Prior to April 30, 2015, the expense limitations as a percentage of average daily net assets were as follows: 0.15% for Institutional; 0.40% for Investor A; and 0.10% for Class K. BFA and BAL have agreed not to reduce or discontinue this contractual waiver or reimbursement prior to May 1, 2016, unless approved by the Board, including a majority of the Independent Trustees.

If during the Fund’s fiscal year the operating expenses of a share class, that at any time during the prior two fiscal years received a waiver or reimbursement from BFA or BAL, as applicable, are less than the expense limit for that share class, BFA or BAL, as applicable, is entitled to be reimbursed by such share class up to the lesser of (a) the amount of fees waived or expenses reimbursed during those prior two fiscal years under the agreement and (b) the amount by which the expense limit for that share class exceeds the operating expenses of the share class for the current fiscal year, provided that: (1) the Fund, of which the share class is a part, has more than $50 million in assets for the fiscal year and (2) BFA or BAL, as applicable, or an affiliate continues to serve as the Fund’s investment advisor or administrator. In the event the expense limit for a share class is changed subsequent to a fiscal year in which BFA or BAL, as applicable, becomes entitled to reimbursement for fees waived or reimbursed, the amount available to reimburse BFA or BAL, as applicable, shall be calculated by reference to the expense limit for that share class in effect at the time BFA or BAL, as applicable, became entitled to receive such reimbursement, rather than the subsequently changed expense limit for that share class.

On June 30, 2015, the Fund level and class specific waivers and/or reimbursements subject to possible future recoupment under the expense limitation agreement with BAL are as follows:


	Expiring December 31,
	2015		2016		2017
Fund level	$	100,089	$	99,938	$	49,363
Institutional		186		758		110
Investor A		981		4,985		2,177
Class K		143		90		—

The Trust, on behalf of the Fund, entered into a Distribution Agreement and Investor A Shares Distribution Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of BlackRock. Pursuant to the Distribution Plan and in accordance with Rule 12b-1 under the 1940 Act, the Fund pays BRIL ongoing service fees. The fees are accrued daily and paid monthly at an annual rate of 0.25% based upon the average daily net assets of the Investor A Shares.


Institutional	Investor A	Class K
$51	$387	—

4. 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 federal income tax provision is required.



14	BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015


Notes to Financial Statements (concluded)		BlackRock Large Cap Index Fund

The statutes of limitations on the Fund’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.

5. Capital Share Transactions:

Transactions in capital shares for each class were as follows:


	Six Month Ended June 30, 2015						Year Ended December 31, 2014
	Shares			Amount			Shares			Amount
Institutional
Shares sold		110,050		$	1,641,906			12,718		$	182,477
Shares issued to shareholders in reinvestment of distributions		1,134			16,820			649			9,418
Shares redeemed		(15,847	)		(238,488	)		(2,256	)		(32,808	)

Net increase		95,337		$	1,420,238			11,111		$	159,087


Investor A
Shares sold		363,923		$	5,427,504			915,164		$	12,739,622
Shares issued to shareholders in reinvestment of distributions		10,178			150,247			35,002			505,651
Shares redeemed		(389,086	)		(5,836,265	)		(235,628	)		(3,301,283	)

Net increase (decrease)		(14,985	)	$	(258,514	)		714,538		$	9,943,990


Class K
Shares sold		537,092		$	7,899,803			626,336		$	8,676,816
Shares issued to shareholders in reinvestment of distributions		54,865			811,023			175,001			2,519,103
Shares redeemed		(215,374	)		(3,253,221	)		(1,008,042	)		(14,195,583	)

Net increase (decrease)		376,583		$	5,457,605			(206,705	)	$	(2,999,664	)

Total Net Increase (Decrease)		456,935		$	6,619,329			518,944		$	7,103,413

6. Subsequent Events:



BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015	15


Master Portfolio Information		Large Cap Index Master Portfolio


As of June 30, 2015


Top Ten Holdings		Percent of Long-Term Investments


Apple, Inc.	3	%
Microsoft Corp.	2
Exxon Mobil Corp.	2
Johnson & Johnson	1
General Electric Co.	1
Wells Fargo & Co.	1
Berkshire Hathway, Inc., Class B	1
JPMorgan Chase & Co.	1
The Proctor & Gamble Co.	1
Pfizer, Inc.	1


Sector Allocation		Percent of Long-Term Investments


Information Technology	19	%
Financials	17
Health Care	15
Consumer Discretionary	13
Industrials	11
Consumer Staples	9
Energy	8
Materials	3
Utilities	3
Telecommunication Services	2

For Master Portfolio compliance purposes, the Master Portfolio’s sector classifications refer to any 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 advisor. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.



16	BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015

Schedule of Investments June 30, 2015 (Unaudited)

Large Cap Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Aerospace & Defense — 2.5%
B/E Aerospace, Inc.		17,712	$	972,390
The Boeing Co. (a)		113,505		15,745,414
General Dynamics Corp.		47,855		6,780,575
Hexcel Corp.		16,203		805,937
Honeywell International, Inc.		128,309		13,083,669
Huntington Ingalls Industries, Inc.		8,133		915,694
L-3 Communications Holdings, Inc.		13,559		1,537,319
Lockheed Martin Corp.		44,539		8,279,800
Northrop Grumman Corp.		31,808		5,045,703
Orbital ATK, Inc.		10,201		748,345
Precision Castparts Corp.		22,689		4,534,850
Raytheon Co.		50,086		4,792,228
Rockwell Collins, Inc. (a)		21,711		2,005,011
Spirit Aerosystems Holdings, Inc., Class A (b)		23,414		1,290,346
Textron, Inc. (a)		45,573		2,033,923
TransDigm Group, Inc. (b)		8,746		1,964,964
Triumph Group, Inc.		7,929		523,235
United Technologies Corp.		146,117		16,208,759

				87,268,162
Air Freight & Logistics — 0.6%
C.H. Robinson Worldwide, Inc. (a)		24,025		1,498,920
Expeditors International of Washington, Inc. (a)		31,527		1,453,552
FedEx Corp.		46,576		7,936,551
United Parcel Service, Inc., Class B		115,152		11,159,380

				22,048,403
Airlines — 0.6%
Alaska Air Group, Inc.		21,403		1,378,995
American Airlines Group, Inc.		113,715		4,541,208
Copa Holdings SA, Class A (a)		5,301		437,810
Delta Air Lines, Inc.		133,987		5,504,186
JetBlue Airways Corp. (b)		52,097		1,081,534
Southwest Airlines Co.		109,694		3,629,774
Spirit Airlines, Inc. (b)		12,309		764,389
United Continental Holdings, Inc. (b)		62,701		3,323,780

				20,661,676
Auto Components — 0.5%
Allison Transmission Holdings, Inc.		30,088		880,375
BorgWarner, Inc. (a)		37,139		2,110,981
Delphi Automotive PLC		47,393		4,032,670
Gentex Corp. (a)		49,475		812,380
The Goodyear Tire & Rubber Co.		44,550		1,343,182
Johnson Controls, Inc.		107,483		5,323,633
Lear Corp.		12,815		1,438,612
Visteon Corp. (a)(b)		7,190		754,806

				16,696,639
Automobiles — 0.7%
Ford Motor Co.		640,878		9,619,579
General Motors Co.		263,805		8,792,620
Harley-Davidson, Inc.		34,163		1,925,085
Tesla Motors, Inc. (a)(b)		16,007		4,294,038
Thor Industries, Inc. (a)		7,311		411,463

				25,042,785
Common Stocks	Shares		Value
Banks — 2.9%
Associated Banc-Corp (a)		24,543	$	497,487
Bank of Hawaii Corp. (a)		7,019		468,027
BankUnited, Inc.		16,641		597,911
BB&T Corp. (a)		119,763		4,827,647
BOK Financial Corp. (a)		4,544		316,172
CIT Group, Inc.		28,754		1,336,773
Citizens Financial Group, Inc.		51,458		1,405,318
City National Corp.		7,737		699,347
Comerica, Inc.		29,312		1,504,292
Commerce Bancshares, Inc. (a)		13,252		619,796
Cullen/Frost Bankers, Inc. (a)		8,723		685,453
East West Bancorp, Inc.		23,914		1,071,826
Fifth Third Bancorp		132,942		2,767,852
First Horizon National Corp. (a)		37,590		589,035
First Niagara Financial Group, Inc.		57,135		539,354
First Republic Bank		23,436		1,477,171
Huntington Bancshares, Inc.		133,166		1,506,108
KeyCorp		139,240		2,091,385
M&T Bank Corp. (a)		21,826		2,726,722
PacWest Bancorp (a)		17,121		800,578
The PNC Financial Services Group, Inc. (c)		85,010		8,131,207
Popular, Inc. (b)		16,655		480,663
Regions Financial Corp.		220,004		2,279,241
Signature Bank (b)		8,390		1,228,212
SunTrust Banks, Inc.		84,732		3,645,171
SVB Financial Group (b)		8,484		1,221,526
Synovus Financial Corp. (a)		21,435		660,627
TCF Financial Corp.		27,182		451,493
US Bancorp (a)		274,965		11,933,481
Wells Fargo & Co.		764,696		43,006,503
Zions Bancorporation		33,780		1,072,008

				100,638,386
Beverages — 1.8%
Brown-Forman Corp., Class A		4,401		490,359
Brown-Forman Corp., Class B		20,697		2,073,426
The Coca-Cola Co.		643,627		25,249,487
Coca-Cola Enterprises, Inc.		38,273		1,662,579
Constellation Brands, Inc., Class A		26,852		3,115,369
Dr Pepper Snapple Group, Inc.		31,471		2,294,236
Molson Coors Brewing Co., Class B		22,675		1,582,942
Monster Beverage Corp. (b)		24,557		3,291,129
PepsiCo, Inc.		242,277		22,614,135

				62,373,662
Biotechnology — 3.3%
Agios Pharmaceuticals, Inc. (b)		4,158		462,120
Alexion Pharmaceuticals, Inc. (b)		35,417		6,402,331
Alkermes PLC (b)		24,451		1,573,177
Alnylam Pharmaceuticals, Inc. (b)		12,239		1,467,089
Amgen, Inc.		124,799		19,159,143
Biogen, Inc. (b)		38,611		15,596,527
BioMarin Pharmaceutical, Inc. (b)		26,318		3,599,776
Bluebird Bio, Inc. (b)		5,495		925,193
Celgene Corp. (b)		130,186		15,067,077
Gilead Sciences, Inc.		241,219		28,241,921

Portfolio Abbreviations


S&P		Standard and Poor’s

See Notes to Financial Statements.



BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015	17

Schedule of Investments (continued)

Large Cap Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Biotechnology (concluded)
Incyte Corp. (b)		25,680	$	2,676,113
Intercept Pharmaceuticals, Inc. (a)(b)		2,567		619,622
Intrexon Corp. (b)		7,450		363,560
Isis Pharmaceuticals, Inc. (b)		19,860		1,142,943
Juno Therapeutics, Inc. (a)(b)		1,920		102,394
Medivation, Inc. (b)		12,976		1,481,859
Opko Health, Inc. (b)		37,783		607,551
Puma Biotechnology, Inc. (b)		4,025		469,919
Receptos, Inc. (b)		5,269		1,001,373
Regeneron Pharmaceuticals, Inc. (b)		12,876		6,568,434
Seattle Genetics, Inc. (a)(b)		16,011		774,932
United Therapeutics Corp. (a)(b)		7,639		1,328,804
Vertex Pharmaceuticals, Inc. (b)		40,010		4,940,435

				114,572,293
Building Products — 0.2%
Allegion PLC		15,966		960,195
AO Smith Corp. (a)		12,424		894,280
Armstrong World Industries, Inc. (b)		6,301		335,717
Fortune Brands Home & Security, Inc.		26,407		1,209,969
Lennox International, Inc. (a)		6,510		701,062
Masco Corp. (a)		57,380		1,530,325
Owens Corning		19,814		817,327
USG Corp. (a)(b)		14,814		411,681

				6,860,556
Capital Markets — 2.3%
Affiliated Managers Group, Inc. (b)		8,983		1,963,684
Ameriprise Financial, Inc.		29,772		3,719,416
Artisan Partners Asset Management, Inc., Class A		5,713		265,426
The Bank of New York Mellon Corp.		184,084		7,726,006
BlackRock, Inc. (c)		20,592		7,124,420
The Charles Schwab Corp.		188,049		6,139,800
E*Trade Financial Corp. (b)		47,795		1,431,460
Eaton Vance Corp. (a)		19,821		775,596
Federated Investors, Inc., Class B (a)		15,083		505,130
Franklin Resources, Inc.		63,663		3,121,397
The Goldman Sachs Group, Inc.		70,911		14,805,508
Invesco Ltd.		70,696		2,650,393
Lazard Ltd., Class A		11,481		645,691
Legg Mason, Inc.		16,394		844,783
LPL Financial Holdings, Inc. (a)		13,268		616,829
Morgan Stanley		251,619		9,760,301
Northern Trust Corp.		38,305		2,928,800
NorthStar Asset Management Group, Inc.		31,192		576,740
Raymond James Financial, Inc.		21,137		1,259,342
SEI Investments Co.		23,115		1,133,328
State Street Corp.		67,573		5,203,121
T. Rowe Price Group, Inc. (a)		42,772		3,324,668
TD Ameritrade Holding Corp. (a)		43,885		1,615,846
Waddell & Reed Financial, Inc., Class A (a)		13,562		641,618

				78,779,303
Chemicals — 2.4%
Air Products & Chemicals, Inc.		35,252		4,823,531
Airgas, Inc.		11,264		1,191,506
Albemarle Corp.		18,647		1,030,620
Ashland, Inc.		11,154		1,359,673
Axalta Coating Systems, Ltd. (b)		16,231		536,921
Cabot Corp.		10,252		382,297
Celanese Corp., Series A		25,153		1,807,998
Common Stocks	Shares		Value
Chemicals (concluded)
CF Industries Holdings, Inc.		38,630	$	2,483,136
Cytec Industries, Inc.		11,489		695,429
The Dow Chemical Co.		189,232		9,683,001
E.I. du Pont de Nemours & Co.		148,585		9,502,011
Eastman Chemical Co.		24,401		1,996,490
Ecolab, Inc.		43,335		4,899,888
FMC Corp. (a)		22,133		1,163,089
Huntsman Corp.		34,460		760,532
International Flavors & Fragrances, Inc.		13,328		1,456,617
LyondellBasell Industries NV, Class A		63,201		6,542,568
Monsanto Co.		78,147		8,329,689
The Mosaic Co.		57,188		2,679,258
NewMarket Corp. (a)		1,369		607,685
Platform Specialty Products Corp. (b)		19,413		496,585
PPG Industries, Inc.		44,622		5,119,036
Praxair, Inc.		47,323		5,657,465
RPM International, Inc. (a)		22,133		1,083,853
The Scotts Miracle-Gro Co., Class A		7,258		429,746
The Sherwin-Williams Co.		13,292		3,655,566
Sigma-Aldrich Corp.		19,641		2,736,973
The Valspar Corp. (a)		13,493		1,103,997
Westlake Chemical Corp.		6,475		444,120
WR Grace & Co. (b)		12,052		1,208,816

				83,868,096
Commercial Services & Supplies — 0.5%
The ADT Corp. (a)		28,598		960,035
Cintas Corp.		15,763		1,333,392
Clean Harbors, Inc. (a)(b)		9,441		507,359
Copart, Inc. (b)		21,343		757,250
Covanta Holding Corp.		18,416		390,235
Iron Mountain, Inc.		34,984		1,084,504
KAR Auction Services, Inc.		23,727		887,390
Pitney Bowes, Inc. (a)		32,454		675,368
Republic Services, Inc. (a)		39,902		1,562,961
Rollins, Inc.		15,277		435,853
RR Donnelley & Sons Co. (a)		33,567		585,073
Stericycle, Inc. (b)		13,960		1,869,384
Tyco International PLC		69,108		2,659,276
Waste Connections, Inc.		20,661		973,546
Waste Management, Inc.		75,147		3,483,063

				18,164,689
Communications Equipment — 1.5%
Arista Networks, Inc. (a)(b)		5,425		443,440
ARRIS Group, Inc. (b)		21,887		669,742
Brocade Communications Systems, Inc.		70,111		832,919
Cisco Systems, Inc.		834,790		22,923,334
CommScope Holding Co., Inc. (b)		16,934		516,656
EchoStar Corp., Class A (b)		7,098		345,531
F5 Networks, Inc. (b)		11,859		1,427,231
Harris Corp.		20,337		1,564,119
JDS Uniphase Corp. (b)		37,678		436,311
Juniper Networks, Inc.		64,855		1,684,284
Motorola Solutions, Inc. (a)		34,624		1,985,340
Palo Alto Networks, Inc. (b)		11,912		2,081,026
QUALCOMM, Inc.		267,572		16,758,034

				51,667,967

See Notes to Financial Statements.



18	BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

Large Cap Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Construction & Engineering — 0.2%
AECOM (a)(b)		25,224	$	834,410
Chicago Bridge & Iron Co. NV (a)		16,430		822,157
Fluor Corp.		24,230		1,284,432
Jacobs Engineering Group, Inc. (b)		21,040		854,645
KBR, Inc.		23,213		452,189
Quanta Services, Inc. (b)		34,089		982,445

				5,230,278
Construction Materials — 0.1%
Eagle Materials, Inc.		8,084		617,052
Martin Marietta Materials, Inc. (a)		11,102		1,571,044
Vulcan Materials Co.		21,775		1,827,576

				4,015,672
Consumer Finance — 0.8%
Ally Financial, Inc. (b)		79,034		1,772,733
American Express Co.		141,843		11,024,038
Capital One Financial Corp.		89,690		7,890,029
Credit Acceptance Corp. (b)		1,368		336,774
Discover Financial Services		72,633		4,185,114
Navient Corp.		64,502		1,174,582
Santander Consumer USA Holdings, Inc.		14,295		365,523
SLM Corp. (b)		68,499		676,085
Springleaf Holdings, Inc. (b)		8,387		385,047
Synchrony Financial (b)		20,669		680,630

				28,490,555
Containers & Packaging — 0.4%
Aptargroup, Inc. (a)		10,074		642,419
Avery Dennison Corp. (a)		15,212		927,019
Ball Corp.		22,668		1,590,160
Bemis Co., Inc. (a)		16,442		740,054
Crown Holdings, Inc. (b)		23,048		1,219,470
Graphic Packaging Holding Co.		55,483		772,878
MeadWestvaco Corp.		27,740		1,309,051
Owens-Illinois, Inc. (b)		25,948		595,247
Packaging Corp. of America (a)		16,305		1,018,900
Rock-Tenn Co., Class A		23,234		1,398,687
Sealed Air Corp.		34,497		1,772,456
Silgan Holdings, Inc.		6,536		344,839
Sonoco Products Co.		16,237		695,918

				13,027,098
Distributors — 0.1%
Genuine Parts Co.		24,982		2,236,638
LKQ Corp. (b)		50,089		1,514,942

				3,751,580
Diversified Consumer Services — 0.1%
H&R Block, Inc. (a)		45,440		1,347,296
Service Corp. International		33,701		991,820
ServiceMaster Global Holdings, Inc. (b)		16,533		597,999

				2,937,115
Diversified Financial Services — 4.7%
Bank of America Corp.		1,723,797		29,339,025
Berkshire Hathaway, Inc., Class B (b)		305,274		41,550,844
CBOE Holdings, Inc.		14,045		803,655
Citigroup, Inc.		498,019		27,510,570
CME Group, Inc.		52,619		4,896,724
Equity Commonwealth (b)		20,875		535,861
Interactive Brokers Group, Inc., Class A		9,264		385,012
Common Stocks	Shares		Value
Diversified Financial Services (concluded)
IntercontinentalExchange Group, Inc.		18,271	$	4,085,578
JPMorgan Chase & Co.		609,132		41,274,784
Leucadia National Corp.		54,303		1,318,477
McGraw-Hill Financial, Inc.		44,925		4,512,716
Moody’s Corp. (a)		29,137		3,145,631
MSCI, Inc.		18,642		1,147,415
The NASDAQ OMX Group, Inc.		19,336		943,790

				161,450,082
Diversified Telecommunication Services — 2.0%
AT&T, Inc.		852,371		30,276,218
CenturyLink, Inc.		92,533		2,718,619
Frontier Communications Corp. (a)		168,732		835,223
Level 3 Communications, Inc. (b)		47,474		2,500,456
Verizon Communications, Inc.		669,436		31,202,412
Zayo Group Holdings, Inc. (b)		23,100		594,132

				68,127,060
Electric Utilities — 1.5%
American Electric Power Co., Inc.		80,419		4,259,794
Duke Energy Corp.		113,508		8,015,935
Edison International		53,479		2,972,363
Entergy Corp. (a)		29,467		2,077,423
Eversource Energy (a)		52,139		2,367,632
Exelon Corp. (a)		141,364		4,441,657
FirstEnergy Corp.		69,271		2,254,771
Great Plains Energy, Inc.		24,828		599,844
Hawaiian Electric Industries, Inc.		17,286		513,913
ITC Holdings Corp.		26,060		838,611
NextEra Energy, Inc.		72,898		7,146,191
OGE Energy Corp.		33,328		952,181
Pepco Holdings, Inc.		42,035		1,132,423
Pinnacle West Capital Corp.		18,440		1,049,052
PPL Corp.		109,662		3,231,739
The Southern Co. (a)		149,081		6,246,494
Westar Energy, Inc.		22,300		763,106
Xcel Energy, Inc.		83,204		2,677,505

				51,540,634
Electrical Equipment — 0.6%
Acuity Brands, Inc.		7,169		1,290,277
AMETEK, Inc.		39,643		2,171,643
Eaton Corp. PLC		76,669		5,174,391
Emerson Electric Co. (a)		109,695		6,080,394
Hubbell, Inc., Class B		9,627		1,042,412
Regal-Beloit Corp. (a)		7,211		523,446
Rockwell Automation, Inc.		22,089		2,753,173
SolarCity Corp. (a)(b)		9,518		509,689

				19,545,425
Electronic Equipment, Instruments & Components — 0.4%
Amphenol Corp., Class A		50,706		2,939,427
Arrow Electronics, Inc. (b)		16,006		893,135
Avnet, Inc.		22,690		932,786
CDW Corp.		22,217		761,599
Cognex Corp.		14,021		674,410
Corning, Inc.		206,577		4,075,764
Dolby Laboratories, Inc., Class A		8,014		317,996
FLIR Systems, Inc.		22,549		694,960
Ingram Micro, Inc., Class A (b)		25,146		629,404
IPG Photonics Corp. (a)(b)		5,560		473,573

See Notes to Financial Statements.



BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015	19

Schedule of Investments (continued)

Large Cap Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Electronic Equipment, Instruments & Components (concluded)
Jabil Circuit, Inc.		31,180	$	663,822
Keysight Technologies, Inc. (b)		28,284		882,178
National Instruments Corp.		18,092		532,990
Trimble Navigation Ltd. (b)		43,246		1,014,551

				15,486,595
Energy Equipment & Services — 1.3%
Baker Hughes, Inc.		71,347		4,402,110
Cameron International Corp. (b)		31,462		1,647,665
Diamond Offshore Drilling, Inc. (a)		10,333		266,695
Dresser-Rand Group, Inc. (b)		12,798		1,090,134
Dril-Quip, Inc. (b)		6,268		471,667
Ensco PLC, Class A		39,260		874,320
FMC Technologies, Inc. (b)		37,993		1,576,330
Frank’s International NV		5,536		104,298
Halliburton Co.		139,662		6,015,242
Helmerich & Payne, Inc. (a)		16,011		1,127,495
Nabors Industries Ltd.		55,597		802,265
National Oilwell Varco, Inc.		63,664		3,073,698
Noble Corp. PLC		38,936		599,225
Oceaneering International, Inc. (a)		16,631		774,838
Patterson-UTI Energy, Inc.		23,625		444,504
Rowan Cos. PLC, Class A		20,077		423,826
RPC, Inc. (a)		9,362		129,476
Schlumberger Ltd.		208,411		17,962,944
Seadrill Ltd. (a)		60,128		621,724
Superior Energy Services, Inc.		24,210		509,378
Weatherford International PLC (b)		127,475		1,564,118

				44,481,952
Food & Staples Retailing — 2.1%
Costco Wholesale Corp.		72,217		9,753,628
CVS Health Corp.		185,203		19,424,091
The Kroger Co. (a)		80,461		5,834,227
Rite Aid Corp. (b)		163,218		1,362,870
Sprouts Farmers Market, Inc. (a)(b)		24,673		665,678
Sysco Corp.		97,460		3,518,306
Wal-Mart Stores, Inc.		259,270		18,390,021
Walgreens Boots Alliance, Inc.		141,113		11,915,582
Whole Foods Market, Inc.		58,808		2,319,387

				73,183,790
Food Products — 1.7%
Archer-Daniels-Midland Co.		101,827		4,910,098
Bunge Ltd.		23,572		2,069,622
Campbell Soup Co. (a)		28,749		1,369,890
ConAgra Foods, Inc.		70,096		3,064,597
Flowers Foods, Inc. (a)		28,005		592,306
General Mills, Inc.		97,842		5,451,756
The Hain Celestial Group, Inc. (a)(b)		17,036		1,121,991
The Hershey Co.		23,913		2,124,192
Hormel Foods Corp. (a)		22,184		1,250,512
Ingredion, Inc. (a)		11,894		949,260
The J.M. Smucker Co.		19,642		2,129,389
Kellogg Co.		40,991		2,570,136
Keurig Green Mountain, Inc.		21,247		1,628,158
Kraft Foods Group, Inc.		97,161		8,272,287
McCormick & Co., Inc. (a)		20,994		1,699,464
Mead Johnson Nutrition Co.		33,247		2,999,544
Mondelez International, Inc., Class A		266,992		10,984,051
Pilgrim’s Pride Corp. (a)		10,279		236,109
Common Stocks	Shares		Value
Food Products (concluded)
Pinnacle Foods, Inc.		19,519	$	888,895
Tyson Foods, Inc., Class A (a)		48,380		2,062,439
WhiteWave Foods Co. (b)		28,883		1,411,801

				57,786,497
Gas Utilities — 0.1%
AGL Resources, Inc.		20,064		934,180
Atmos Energy Corp.		16,937		868,529
National Fuel Gas Co. (a)		14,171		834,530
Questar Corp.		28,275		591,230
UGI Corp.		28,759		990,748

				4,219,217
Health Care Equipment & Supplies — 2.2%
Abbott Laboratories		244,363		11,993,336
Alere, Inc. (b)		13,699		722,622
Align Technology, Inc. (a)(b)		13,555		850,034
Baxter International, Inc.		89,333		6,247,057
Becton Dickinson & Co.		34,369		4,868,369
Boston Scientific Corp. (b)		220,057		3,895,009
C.R. Bard, Inc. (a)		12,187		2,080,321
The Cooper Cos., Inc.		7,968		1,418,065
DENTSPLY International, Inc. (a)		23,170		1,194,413
DexCom, Inc. (b)		13,201		1,055,816
Edwards Lifesciences Corp. (b)		17,655		2,514,602
Hill-Rom Holdings, Inc.		9,097		494,240
Hologic, Inc. (b)		40,485		1,540,859
IDEXX Laboratories, Inc. (a)(b)		15,612		1,001,354
Intuitive Surgical, Inc. (b)		6,050		2,931,225
Medtronic PLC		233,909		17,332,657
ResMed, Inc. (a)		23,305		1,313,703
Sirona Dental Systems, Inc. (b)		9,286		932,500
St. Jude Medical, Inc.		46,152		3,372,327
Stryker Corp.		55,441		5,298,496
Teleflex, Inc. (a)		6,940		940,023
Varian Medical Systems, Inc. (b)		16,471		1,388,999
Zimmer Biomet Holdings, Inc.		27,970		3,055,163

				76,441,190
Health Care Providers & Services — 2.9%
Acadia Healthcare Co., Inc. (b)		8,317		651,471
Aetna, Inc.		57,318		7,305,752
AmerisourceBergen Corp.		36,059		3,834,514
Anthem, Inc.		43,235		7,096,593
Brookdale Senior Living, Inc. (b)		30,612		1,062,236
Cardinal Health, Inc.		54,303		4,542,446
Catamaran Corp. (b)		34,143		2,085,454
Centene Corp. (a)(b)		19,518		1,569,247
Cigna Corp.		42,244		6,843,528
Community Health Systems, Inc. (b)		19,542		1,230,560
DaVita HealthCare Partners, Inc. (b)		28,958		2,301,292
Envision Healthcare Holdings, Inc. (b)		30,747		1,213,892
Express Scripts Holding Co. (b)		119,705		10,646,563
HCA Holdings, Inc. (b)		52,624		4,774,049
Health Net, Inc. (b)		12,964		831,252
Henry Schein, Inc. (a)(b)		13,726		1,950,739
Humana, Inc. (a)		24,585		4,702,619
Laboratory Corp. of America Holdings (b)		16,480		1,997,706
LifePoint Hospitals, Inc. (b)		7,130		619,954
McKesson Corp.		38,007		8,544,354
MEDNAX, Inc. (b)		15,519		1,150,113

See Notes to Financial Statements.



20	BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

Large Cap Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Health Care Providers & Services (concluded)
Patterson Cos., Inc.		13,856	$	674,094
Premier, Inc., Class A (b)		6,053		232,798
Quest Diagnostics, Inc. (a)		23,597		1,711,254
Tenet Healthcare Corp. (b)		16,575		959,361
UnitedHealth Group, Inc.		156,244		19,061,768
Universal Health Services, Inc., Class B		15,072		2,141,731
VCA, Inc. (b)		13,862		754,162

				100,489,502
Health Care Technology — 0.2%
Athenahealth, Inc. (a)(b)		6,508		745,687
Cerner Corp. (b)		49,186		3,396,785
IMS Health Holdings, Inc. (a)(b)		21,509		659,251
Inovalon Holdings, Inc. (b)		4,068		113,497
Veeva Systems, Inc., Class A (a)(b)		11,428		320,327

				5,235,547
Hotels, Restaurants & Leisure — 1.9%
ARAMARK		32,214		997,668
Brinker International, Inc. (a)		9,838		567,161
Carnival Corp.		69,720		3,443,471
Chipotle Mexican Grill, Inc. (b)		5,097		3,083,634
Choice Hotels International, Inc. (a)		5,703		309,388
Darden Restaurants, Inc.		20,723		1,472,991
Domino’s Pizza, Inc. (a)		9,188		1,041,919
Dunkin’ Brands Group, Inc. (a)		16,119		886,545
Extended Stay America, Inc.		9,609		180,361
Hilton Worldwide Holdings, Inc. (b)		85,255		2,348,775
Hyatt Hotels Corp., Class A (a)(b)		5,480		310,661
International Game Technology PLC (b)		15,150		269,064
Las Vegas Sands Corp. (a)		60,008		3,154,620
Marriott International, Inc., Class A		34,392		2,558,421
McDonald’s Corp.		157,330		14,957,363
MGM Resorts International (b)		73,573		1,342,707
Norwegian Cruise Line Holdings Ltd. (b)		21,762		1,219,542
Panera Bread Co., Class A (a)(b)		4,075		712,188
Royal Caribbean Cruises Ltd. (a)		28,230		2,221,419
Six Flags Entertainment Corp.		11,576		519,184
Starbucks Corp.		246,290		13,204,838
Starwood Hotels & Resorts Worldwide, Inc.		28,049		2,274,493
The Wendy’s Co.		43,700		492,936
Wyndham Worldwide Corp.		19,738		1,616,740
Wynn Resorts Ltd. (a)		13,428		1,324,941
Yum! Brands, Inc.		70,974		6,393,338

				66,904,368
Household Durables — 0.6%
D.R. Horton, Inc.		54,079		1,479,602
Garmin Ltd.		19,831		871,176
GoPro, Inc., Class A (a)(b)		15,008		791,222
Harman International Industries, Inc.		11,729		1,395,047
Jarden Corp. (a)(b)		31,639		1,637,318
Leggett & Platt, Inc.		22,877		1,113,652
Lennar Corp., Class A (a)		28,660		1,462,806
Lennar Corp., Class B		1,562		67,353
Mohawk Industries, Inc. (b)		10,133		1,934,390
Newell Rubbermaid, Inc. (a)		44,104		1,813,116
NVR, Inc. (a)(b)		681		912,540
PulteGroup, Inc.		60,385		1,216,758
Tempur Sealy International, Inc. (b)		9,820		647,138
Toll Brothers, Inc. (b)		29,176		1,114,231
Common Stocks	Shares		Value
Household Durables (concluded)
Tupperware Brands Corp. (a)		8,015	$	517,288
Whirlpool Corp.		12,909		2,233,903

				19,207,540
Household Products — 1.6%
Church & Dwight Co., Inc.		21,484		1,742,997
The Clorox Co.		21,532		2,239,758
Colgate-Palmolive Co.		148,475		9,711,750
Kimberly-Clark Corp.		59,763		6,333,085
The Procter & Gamble Co. (a)		445,307		34,840,820
Spectrum Brands Holdings, Inc.		4,067		414,793

				55,283,203
Independent Power and Renewable Electricity Producers — 0.1%
The AES Corp.		112,422		1,490,716
Calpine Corp. (b)		61,801		1,111,800
NRG Energy, Inc.		55,114		1,261,008
TerraForm Power, Inc., Class A (b)		8,229		312,537

				4,176,061
Industrial Conglomerates — 2.1%
3M Co.		104,120		16,065,716
The BWX Technologies, Inc.		17,216		564,685
Carlisle Cos., Inc.		10,819		1,083,199
Danaher Corp.		101,619		8,697,570
General Electric Co.		1,653,846		43,942,688
Roper Industries, Inc. (a)		16,500		2,845,590

				73,199,448
Insurance — 3.0%
ACE Ltd.		53,607		5,450,760
Aflac, Inc.		71,217		4,429,698
Alleghany Corp. (b)		2,649		1,241,745
Allied World Assurance Co. Holdings AG		15,359		663,816
The Allstate Corp.		67,135		4,355,048
American Financial Group, Inc.		11,632		756,545
American International Group, Inc.		218,862		13,530,049
American National Insurance Co.		1,163		118,998
AmTrust Financial Services, Inc.		6,175		404,524
Aon PLC		46,262		4,611,396
Arch Capital Group Ltd. (b)		20,480		1,371,341
Arthur J Gallagher & Co. (a)		27,755		1,312,812
Aspen Insurance Holdings Ltd.		9,916		474,976
Assurant, Inc.		11,443		766,681
Assured Guaranty Ltd.		24,283		582,549
Axis Capital Holdings Ltd.		16,900		901,953
Brown & Brown, Inc.		18,644		612,642
The Chubb Corp.		37,712		3,587,920
Cincinnati Financial Corp. (a)		27,138		1,361,785
CNA Financial Corp.		4,330		165,449
Endurance Specialty Holdings Ltd.		7,267		477,442
Erie Indemnity Co., Class A (a)		3,890		319,252
Everest Re Group Ltd.		7,341		1,336,136
FNF Group		46,081		1,704,536
Genworth Financial, Inc., Class A (b)		80,037		605,880
The Hanover Insurance Group, Inc.		7,116		526,798
Hartford Financial Services Group, Inc.		68,927		2,865,295
HCC Insurance Holdings, Inc.		15,857		1,218,452
Lincoln National Corp.		41,531		2,459,466
Loews Corp.		51,100		1,967,861
Markel Corp. (b)		2,290		1,833,557

See Notes to Financial Statements.



BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015	21

Schedule of Investments (continued)

Large Cap Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Insurance (concluded)
Marsh & McLennan Cos., Inc.		88,123	$	4,996,574
Mercury General Corp. (a)		1,182		65,778
MetLife, Inc.		153,761		8,609,078
Old Republic International Corp.		42,025		656,851
PartnerRe Ltd.		7,972		1,024,402
Principal Financial Group, Inc.		48,321		2,478,384
ProAssurance Corp.		8,853		409,097
The Progressive Corp.		96,304		2,680,140
Prudential Financial, Inc.		74,355		6,507,550
Reinsurance Group of America, Inc.		11,014		1,044,898
RenaissanceRe Holdings Ltd.		7,751		786,804
StanCorp Financial Group, Inc.		6,792		513,543
Torchmark Corp.		20,887		1,216,041
The Travelers Cos., Inc.		52,311		5,056,381
Unum Group		41,105		1,469,504
Validus Holdings Ltd.		13,611		598,748
Voya Financial, Inc.		37,582		1,746,436
W.R. Berkley Corp.		16,313		847,134
White Mountains Insurance Group Ltd.		965		632,017
XL Group PLC		50,331		1,872,313

				105,227,035
Internet & Catalog Retail — 1.5%
Amazon.com, Inc. (b)		62,566		27,159,275
Expedia, Inc.		16,188		1,770,158
Groupon, Inc. (a)(b)		79,693		400,856
HomeAway, Inc. (b)		15,276		475,389
Liberty Interactive Corp., Series A (b)		77,570		2,152,568
Liberty Ventures, Series A (b)		23,667		929,403
Netflix, Inc. (b)		9,951		6,537,210
The Priceline Group, Inc. (b)		8,509		9,797,007
TripAdvisor, Inc. (b)		18,444		1,607,210

				50,829,076
Internet Software & Services — 3.3%
Akamai Technologies, Inc. (b)		29,309		2,046,354
eBay, Inc. (b)		199,399		12,011,796
Equinix, Inc.		9,344		2,373,376
Facebook, Inc., Class A (b)		355,200		30,463,728
GoDaddy, Inc., Class A (b)		3,798		107,066
Google, Inc., Class A (b)		47,316		25,552,533
Google, Inc., Class C (b)		48,283		25,131,784
IAC/InterActiveCorp		12,262		976,791
LendingClub Corp. (a)(b)		10,645		157,014
LinkedIn Corp., Class A (b)		17,961		3,711,281
Pandora Media, Inc. (a)(b)		34,023		528,717
Rackspace Hosting, Inc. (b)		20,750		771,693
Twitter, Inc. (b)		92,770		3,360,129
VeriSign, Inc. (a)(b)		17,205		1,061,893
Yahoo!, Inc. (b)		154,035		6,052,035
Yelp, Inc. (a)(b)		10,451		449,707
Zillow Group, Inc., Class A (a)(b)		7,079		614,032

				115,369,929
IT Services — 3.3%
Accenture PLC, Class A		103,102		9,978,212
Alliance Data Systems Corp. (b)		10,185		2,973,409
Amdocs Ltd.		25,506		1,392,373
Automatic Data Processing, Inc.		77,067		6,183,085
Black Knight Financial Services, Inc., Class A (b)		3,331		102,828
Booz Allen Hamilton Holding Corp.		16,366		413,078
Common Stocks	Shares		Value
IT Services (concluded)
Broadridge Financial Solutions, Inc.		19,983	$	999,350
Cognizant Technology Solutions Corp., Class A (b)		100,210		6,121,829
Computer Sciences Corp.		22,857		1,500,333
CoreLogic, Inc. (b)		14,517		576,180
DST Systems, Inc.		6,184		779,060
Fidelity National Information Services, Inc.		46,528		2,875,430
Fiserv, Inc. (b)		38,867		3,219,354
FleetCor Technologies, Inc. (b)		15,069		2,351,668
Gartner, Inc. (b)		13,762		1,180,504
Genpact Ltd. (b)		25,599		546,027
Global Payments, Inc.		11,029		1,140,950
International Business Machines Corp.		149,045		24,243,660
Jack Henry & Associates, Inc.		13,691		885,808
Leidos Holdings, Inc.		10,737		433,453
Mastercard, Inc., Class A		164,082		15,338,385
Paychex, Inc.		53,255		2,496,594
Sabre Corp.		18,287		435,231
Teradata Corp. (a)(b)		23,791		880,267
Total System Services, Inc.		27,410		1,144,916
Vantiv, Inc., Class A (b)		23,979		915,758
VeriFone Systems, Inc. (b)		18,290		621,128
Visa, Inc., Class A (a)		321,290		21,574,623
The Western Union Co. (a)		84,785		1,723,679
WEX, Inc. (b)		6,522		743,312
Xerox Corp.		181,200		1,927,968

				115,698,452
Leisure Products — 0.2%
Brunswick Corp.		15,593		793,060
Hasbro, Inc. (a)		18,377		1,374,416
Mattel, Inc. (a)		55,749		1,432,192
Polaris Industries, Inc. (a)		10,930		1,618,842
Vista Outdoor, Inc. (b)		10,279		461,527

				5,680,037
Life Sciences Tools & Services — 0.7%
Agilent Technologies, Inc.		54,659		2,108,744
Bio-Rad Laboratories, Inc., Class A (b)		3,325		500,778
Bio-Techne Corp. (a)		5,979		588,752
Bruker Corp. (b)		17,866		364,645
Charles River Laboratories International, Inc. (a)(b)		7,621		536,061
Illumina, Inc. (b)		23,653		5,164,869
Mettler-Toledo International, Inc. (b)		4,604		1,572,082
PerkinElmer, Inc. (a)		18,862		992,896
QIAGEN NV (a)(b)		38,736		960,266
Quintiles Transnational Holdings, Inc. (b)		13,222		960,049
Thermo Fisher Scientific, Inc.		65,337		8,478,129
VWR Corp. (a)(b)		4,791		128,064
Waters Corp. (b)		13,576		1,742,887

				24,098,222
Machinery — 1.7%
AGCO Corp. (a)		12,206		693,057
Caterpillar, Inc.		99,082		8,404,135
Colfax Corp. (a)(b)		16,915		780,627
Crane Co.		7,741		454,629
Cummins, Inc. (a)		29,761		3,904,346
Deere & Co. (a)		54,802		5,318,534
Donaldson Co., Inc. (a)		22,947		821,503
Dover Corp. (a)		26,325		1,847,488
Flowserve Corp.		22,306		1,174,634

See Notes to Financial Statements.



22	BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

Large Cap Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Machinery (concluded)
Graco, Inc.		9,443	$	670,736
IDEX Corp.		12,984		1,020,283
Illinois Tool Works, Inc.		49,114		4,508,174
Ingersoll-Rand PLC		43,451		2,929,466
ITT Corp.		14,354		600,571
Joy Global, Inc. (a)		15,669		567,218
Kennametal, Inc. (a)		12,757		435,269
Lincoln Electric Holdings, Inc.		12,726		774,886
The Manitowoc Co., Inc. (a)		21,908		429,397
The Middleby Corp. (b)		9,534		1,070,001
Nordson Corp.		10,228		796,659
Oshkosh Corp. (a)		12,586		533,395
PACCAR, Inc.		58,236		3,716,039
Pall Corp.		17,535		2,182,231
Parker Hannifin Corp.		22,763		2,648,020
Pentair PLC		29,486		2,027,162
Snap-on, Inc.		9,566		1,523,385
SPX Corp.		6,602		477,919
Stanley Black & Decker, Inc.		25,233		2,655,521
Terex Corp. (a)		16,913		393,227
The Timken Co. (a)		12,502		457,198
The Toro Co.		8,958		607,173
Trinity Industries, Inc. (a)		24,933		658,979
Valmont Industries, Inc. (a)		3,791		450,636
WABCO Holdings, Inc. (b)		9,066		1,121,646
Wabtec Corp.		15,918		1,500,112
Xylem, Inc.		30,136		1,117,142

				59,271,398
Marine — 0.0%
Kirby Corp. (b)		8,978		688,253
Media — 3.7%
AMC Networks, Inc., Class A (b)		10,059		823,329
Cablevision Systems Corp., New York Group, Class A (a)		33,981		813,505
CBS Corp., Class B		80,780		4,483,290
Charter Communications, Inc., Class A (b)		12,304		2,107,060
Cinemark Holdings, Inc.		19,502		783,395
Clear Channel Outdoor Holdings, Inc., Class A		5,809		58,845
Comcast Corp., Class A		348,451		20,955,843
Comcast Corp., Special Class A		62,567		3,750,266
DIRECTV (b)		77,590		7,199,576
Discovery Communications, Inc., Class A (a)(b)		26,091		867,787
Discovery Communications, Inc., Class C (b)		45,008		1,398,849
DISH Network Corp., Class A (b)		35,721		2,418,669
Gannett Co., Inc. (b)		20,639		288,733
Graham Holdings Co., Class B		561		603,103
The Interpublic Group of Cos., Inc.		68,230		1,314,792
John Wiley & Sons, Inc., Class A		7,451		405,111
Liberty Broadband Corp., Class A (a)(b)		4,205		214,329
Liberty Broadband Corp., Class C (b)		10,678		546,286
Liberty Media Corp., Class A (b)		16,823		606,301
Liberty Media Corp., Class C (b)		33,226		1,192,813
Lions Gate Entertainment Corp. (a)		15,272		565,828
Live Nation Entertainment, Inc. (b)		23,433		644,173
The Madison Square Garden Co., Class A (b)		10,313		861,032
Morningstar, Inc. (a)		3,070		244,219
News Corp., Class A (b)		64,030		934,198
News Corp., Class B (b)		19,455		277,039
Omnicom Group, Inc.		40,101		2,786,618
Regal Entertainment Group, Class A (a)		13,319		278,500
Common Stocks	Shares		Value
Media (concluded)
Scripps Networks Interactive, Inc., Class A (a)		15,232	$	995,716
Sirius XM Holdings, Inc. (b)		378,940		1,413,446
Starz, Class A (a)(b)		13,879		620,669
TEGNA, Inc.		36,567		1,172,704
Thomson Reuters Corp. (a)		54,108		2,059,892
Time Warner Cable, Inc.		46,400		8,267,088
Time Warner, Inc. (a)		135,349		11,830,856
Tribune Co., Class A		12,975		692,735
Twenty-First Century Fox, Inc., Class A		206,641		6,725,131
Twenty-First Century Fox, Inc., Class B		79,378		2,557,559
Viacom, Inc., Class A		1,662		107,814
Viacom, Inc., Class B		56,890		3,677,370
The Walt Disney Co.		278,504		31,788,447

				129,332,916
Metals & Mining — 0.4%
Alcoa, Inc. (a)		200,640		2,237,136
Allegheny Technologies, Inc. (a)		17,575		530,765
Compass Minerals International, Inc.		5,418		445,035
Freeport-McMoRan Copper & Gold, Inc. (a)		170,712		3,178,657
Newmont Mining Corp.		82,045		1,916,571
Nucor Corp.		52,383		2,308,519
Reliance Steel & Aluminum Co.		12,503		756,181
Royal Gold, Inc. (a)		10,429		642,322
Southern Copper Corp. (a)		18,367		540,174
Steel Dynamics, Inc.		40,502		838,999
Tahoe Resources, Inc.		25,688		311,595
United States Steel Corp. (a)		23,442		483,374

				14,189,328
Multi-Utilities — 1.0%
Alliant Energy Corp. (a)		18,787		1,084,386
Ameren Corp.		39,975		1,506,258
CenterPoint Energy, Inc.		71,101		1,353,052
CMS Energy Corp.		45,645		1,453,337
Consolidated Edison, Inc. (a)		48,073		2,782,465
Dominion Resources, Inc. (a)		97,412		6,513,940
DTE Energy Co.		29,435		2,197,028
MDU Resources Group, Inc.		31,350		612,266
NiSource, Inc.		52,094		2,374,965
PG&E Corp.		78,783		3,868,245
Public Service Enterprise Group, Inc.		83,032		3,261,497
SCANA Corp. (a)		23,689		1,199,848
Sempra Energy		40,638		4,020,724
TECO Energy, Inc.		37,835		668,166
Vectren Corp.		13,297		511,669
WEC Energy Group, Inc. (a)		51,818		2,330,260

				35,738,106
Multiline Retail — 0.7%
Dillard’s, Inc., Class A (a)		3,820		401,826
Dollar General Corp.		49,850		3,875,339
Dollar Tree, Inc. (b)		33,844		2,673,338
Family Dollar Stores, Inc.		16,021		1,262,615
JC Penney Co., Inc. (a)(b)		49,099		415,868
Kohl’s Corp. (a)		33,288		2,084,162
Macy’s, Inc.		56,070		3,783,043
Nordstrom, Inc. (a)		23,046		1,716,927
Sears Holdings Corp. (a)(b)		2,132		56,924
Target Corp. (a)		104,801		8,554,906

				24,824,948

See Notes to Financial Statements.



BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015	23

Schedule of Investments (continued)

Large Cap Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Office Electronics — 0.0%
Zebra Technologies Corp., Class A (a)(b)		8,635	$	958,917
Oil, Gas & Consumable Fuels — 6.2%
Anadarko Petroleum Corp.		83,372		6,508,018
Antero Resources Corp. (b)		11,218		385,226
Apache Corp. (a)		61,896		3,567,067
Cabot Oil & Gas Corp.		67,889		2,141,219
California Resources Corp.		50,597		305,606
Cheniere Energy, Inc. (b)		38,831		2,689,435
Chesapeake Energy Corp. (a)		97,544		1,089,566
Chevron Corp.		308,659		29,776,334
Cimarex Energy Co.		15,530		1,713,114
Cobalt International Energy, Inc. (b)		59,004		572,929
Concho Resources, Inc. (b)		19,699		2,242,928
ConocoPhillips		202,374		12,427,787
CONSOL Energy, Inc. (a)		38,389		834,577
Continental Resources, Inc. (a)(b)		13,792		584,643
CVR Energy, Inc.		2,514		94,627
Denbury Resources, Inc. (a)		57,436		365,293
Devon Energy Corp.		67,478		4,014,266
Diamondback Energy, Inc. (b)		10,607		799,556
Energen Corp.		12,276		838,451
EOG Resources, Inc.		90,102		7,888,430
EP Energy Corp., Class A (a)(b)		5,474		69,684
EQT Corp.		25,006		2,033,988
Exxon Mobil Corp. (a)		686,280		57,098,496
Golar LNG Ltd.		14,469		677,149
Gulfport Energy Corp. (b)		15,554		626,049
Hess Corp.		41,384		2,767,762
HollyFrontier Corp. (a)		32,170		1,373,337
Kinder Morgan, Inc.		293,083		11,251,456
Kosmos Energy Ltd. (b)		25,369		213,861
Laredo Petroleum, Inc. (a)(b)		19,817		249,298
Marathon Oil Corp. (a)		110,786		2,940,260
Marathon Petroleum Corp.		89,173		4,664,640
Memorial Resource Development Corp. (a)(b)		13,287		252,054
Murphy Oil Corp. (a)		29,470		1,225,068
Murphy USA, Inc. (b)		7,284		406,593
Newfield Exploration Co. (b)		27,160		981,019
Noble Energy, Inc.		63,702		2,718,801
Occidental Petroleum Corp.		126,078		9,805,086
ONEOK, Inc.		34,472		1,360,955
PBF Energy, Inc. (a)		13,845		393,475
Phillips 66		88,903		7,162,026
Pioneer Natural Resources Co.		24,506		3,398,737
QEP Resources, Inc.		28,428		526,202
Range Resources Corp. (a)		27,915		1,378,443
SM Energy Co.		10,856		500,679
Southwestern Energy Co. (a)(b)		63,386		1,440,764
Spectra Energy Corp.		110,191		3,592,227
Targa Resources Corp.		9,400		838,668
Teekay Corp.		7,507		321,450
Tesoro Corp.		20,659		1,743,826
Valero Energy Corp.		83,485		5,226,161
Whiting Petroleum Corp. (b)		33,837		1,136,923
The Williams Cos., Inc.		122,934		7,055,182
World Fuel Services Corp. (a)		11,616		556,987
WPX Energy, Inc. (b)		32,946		404,577

				215,230,955
Common Stocks	Shares		Value
Paper & Forest Products — 0.1%
Domtar Corp. (a)		10,251	$	424,391
International Paper Co.		69,088		3,287,898

				3,712,289
Personal Products — 0.2%
Avon Products, Inc. (a)		70,011		438,269
Coty, Inc., Class A (b)		13,386		427,950
Edgewell Personal Care Co.		10,268		1,350,755
The Estee Lauder Cos., Inc., Class A		34,431		2,983,790
Herbalife Ltd. (a)(b)		11,786		649,291
Nu Skin Enterprises, Inc., Class A		9,435		444,672

				6,294,727
Pharmaceuticals — 5.7%
AbbVie, Inc.		287,245		19,299,992
Akorn, Inc. (b)		12,614		550,727
Allergan PLC (b)		64,416		19,547,679
Bristol-Myers Squibb Co.		273,615		18,206,342
Eli Lilly & Co.		160,607		13,409,078
Endo International PLC (b)		29,340		2,336,931
Hospira, Inc. (b)		28,360		2,515,816
Jazz Pharmaceuticals PLC (b)		10,029		1,765,806
Johnson & Johnson		455,163		44,360,186
Mallinckrodt PLC (b)		19,201		2,260,342
Merck & Co., Inc.		463,728		26,400,035
Mylan NV (b)		68,981		4,681,051
Omnicare, Inc. (a)		15,964		1,504,607
Perrigo Co. PLC		24,009		4,437,584
Pfizer, Inc.		1,010,710		33,889,106
Zoetis, Inc.		82,064		3,957,126

				199,122,408
Producer Durables: Miscellaneous — 0.0%
The Ultimate Software Group, Inc. (b)		4,810		790,475
Professional Services — 0.4%
CoStar Group, Inc. (b)		5,398		1,086,401
The Dun & Bradstreet Corp.		6,076		741,272
Equifax, Inc.		19,534		1,896,556
IHS, Inc., Class A (b)		11,338		1,458,407
Manpowergroup, Inc.		12,971		1,159,348
Nielsen NV (a)		60,413		2,704,690
Robert Half International, Inc.		22,356		1,240,758
Towers Watson & Co., Class A (a)		11,404		1,434,623
Verisk Analytics, Inc., Class A (b)		27,752		2,019,236

				13,741,291
Real Estate Investment Trusts (REITs) — 3.2%
Alexandria Real Estate Equities, Inc.		11,970		1,046,896
American Campus Communities, Inc.		18,071		681,096
American Capital Agency Corp.		58,770		1,079,605
American Homes 4 Rent, Class A		26,661		427,642
American Realty Capital Properties, Inc.		149,899		1,218,679
American Tower Corp.		69,446		6,478,617
Annaly Capital Management, Inc.		156,512		1,438,345
Apartment Investment & Management Co., Class A		26,150		965,720
Apple Hospitality REIT, Inc.		29,950		565,157
AvalonBay Communities, Inc.		21,698		3,468,859
BioMed Realty Trust, Inc.		32,757		633,520
Boston Properties, Inc.		25,180		3,047,787
Brandywine Realty Trust		28,944		384,376

See Notes to Financial Statements.



24	BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

Large Cap Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Real Estate Investment Trusts (REITs) (continued)
Brixmor Property Group, Inc.		27,844	$	644,032
Camden Property Trust		14,445		1,072,975
CBL & Associates Properties, Inc. (a)		26,871		435,310
Chimera Investment Corp.		33,082		453,554
Columbia Property Trust, Inc.		20,127		494,118
Communications Sales & Leasing, Inc. (a)		19,413		479,889
Corporate Office Properties Trust		15,213		358,114
Corrections Corp. of America		18,831		622,930
Crown Castle International Corp.		54,783		4,399,075
DDR Corp.		48,892		755,870
Digital Realty Trust, Inc.		22,349		1,490,231
Douglas Emmett, Inc.		23,474		632,390
Duke Realty Corp.		57,386		1,065,658
Empire State Realty Trust, Inc., Class A		17,928		305,852
Equity Lifestyle Properties, Inc.		13,592		714,667
Equity Residential		59,745		4,192,307
Essex Property Trust, Inc.		10,727		2,279,488
Extra Space Storage, Inc.		19,281		1,257,507
Federal Realty Investment Trust		11,321		1,450,107
Gaming and Leisure Properties, Inc.		14,196		520,425
General Growth Properties, Inc.		94,713		2,430,336
HCP, Inc.		75,779		2,763,660
Health Care REIT, Inc.		57,552		3,777,138
Healthcare Trust of America, Inc., Class A		20,147		482,521
Home Properties, Inc.		9,320		680,826
Hospitality Properties Trust		21,016		605,681
Host Hotels & Resorts, Inc.		124,364		2,466,138
Kilroy Realty Corp.		14,678		985,628
Kimco Realty Corp.		67,936		1,531,277
Lamar Advertising Co., Class A		13,632		783,567
Liberty Property Trust		25,058		807,369
The Macerich Co.		25,977		1,937,884
MFA Financial, Inc.		59,602		440,459
Mid-America Apartment Communities, Inc.		12,600		917,406
National Retail Properties, Inc.		22,546		789,335
NorthStar Realty Finance Corp.		57,958		921,532
Omega Healthcare Investors, Inc.		30,409		1,043,941
Outfront Media, Inc.		22,110		558,056
Paramount Group, Inc.		28,738		493,144
Piedmont Office Realty Trust, Inc., Class A (a)		24,844		437,006
Plum Creek Timber Co., Inc.		29,113		1,181,114
Post Properties, Inc.		8,785		477,640
Prologis, Inc.		86,017		3,191,231
Public Storage		23,774		4,383,212
Rayonier, Inc.		20,415		521,603
Realty Income Corp. (a)		38,204		1,695,876
Regency Centers Corp.		15,762		929,643
Retail Properties of America, Inc., Class A		38,167		531,666
Senior Housing Properties Trust		37,816		663,671
Simon Property Group, Inc.		51,092		8,839,938
SL Green Realty Corp. (a)		16,346		1,796,262
Spirit Realty Capital, Inc.		71,035		686,908
Starwood Property Trust, Inc.		39,921		861,096
Tanger Factory Outlet Centers		15,422		488,877
Taubman Centers, Inc.		7,970		553,915
Two Harbors Investment Corp.		58,988		574,543
UDR, Inc.		42,752		1,369,347
Ventas, Inc.		49,800		3,092,082
Vornado Realty Trust		30,903		2,933,622
Weingarten Realty Investors		19,953		652,264
Common Stocks	Shares		Value
Real Estate Investment Trusts (REITs) (concluded)
Weyerhaeuser Co.		84,982	$	2,676,933
WP Carey, Inc.		17,383		1,024,554
WP Glimcher, Inc.		29,816		403,411

				109,443,110
Real Estate Management & Development — 0.2%
CBRE Group, Inc., Class A (b)		46,962		1,737,594
Forest City Enterprises, Inc., Class A (b)		36,686		810,761
The Howard Hughes Corp. (b)		6,630		951,670
Jones Lang LaSalle, Inc.		7,422		1,269,162
Realogy Holdings Corp. (b)		24,359		1,138,052

				5,907,239
Road & Rail — 0.9%
AMERCO, Inc.		1,175		384,119
Avis Budget Group, Inc. (b)		17,073		752,578
CSX Corp.		162,166		5,294,720
Genesee & Wyoming, Inc., Class A (b)		8,541		650,654
Hertz Global Holdings, Inc. (a)(b)		67,153		1,216,812
JB Hunt Transport Services, Inc. (a)		15,220		1,249,410
Kansas City Southern		18,160		1,656,192
Landstar System, Inc. (a)		7,145		477,786
Norfolk Southern Corp.		50,038		4,371,320
Old Dominion Freight Line, Inc. (b)		11,741		805,491
Ryder System, Inc. (a)		8,973		783,971
Union Pacific Corp.		143,719		13,706,481

				31,349,534
Semiconductors & Semiconductor Equipment — 2.3%
Altera Corp.		49,421		2,530,355
Analog Devices, Inc.		51,465		3,303,281
Applied Materials, Inc.		202,153		3,885,381
Atmel Corp.		67,162		661,881
Avago Technologies Ltd. (a)		42,116		5,598,480
Broadcom Corp., Class A		90,683		4,669,268
Cree, Inc. (a)(b)		17,559		457,061
Cypress Semiconductor Corp.		53,409		628,090
First Solar, Inc. (a)(b)		12,157		571,136
Freescale Semiconductor Ltd. (b)		18,751		749,477
Intel Corp.		778,673		23,683,339
KLA-Tencor Corp.		26,349		1,481,077
Lam Research Corp.		25,988		2,114,124
Linear Technology Corp. (a)		39,308		1,738,593
Marvell Technology Group Ltd. (a)		75,415		994,347
Maxim Integrated Products, Inc.		46,710		1,614,998
Microchip Technology, Inc. (a)		33,282		1,578,399
Micron Technology, Inc. (b)		177,523		3,344,533
NVIDIA Corp. (a)		88,307		1,775,854
ON Semiconductor Corp. (b)		71,991		841,575
Qorvo, Inc. (b)		24,528		1,968,862
Skyworks Solutions, Inc. (a)		31,367		3,265,305
SunEdison, Inc. (b)		44,956		1,344,634
SunPower Corp. (a)(b)		8,800		250,008
Teradyne, Inc.		34,523		665,949
Texas Instruments, Inc.		170,764		8,796,054
Xilinx, Inc.		42,459		1,874,989

				80,387,050
Software — 3.9%
Activision Blizzard, Inc.		82,822		2,005,121
Adobe Systems, Inc. (b)		82,114		6,652,055

See Notes to Financial Statements.



BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015	25

Schedule of Investments (continued)

Large Cap Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Software (concluded)
Allscripts Healthcare Solutions, Inc. (b)		29,103	$	398,129
ANSYS, Inc. (b)		14,827		1,352,815
Autodesk, Inc. (b)		37,367		1,871,153
CA, Inc. (a)		51,993		1,522,875
Cadence Design Systems, Inc. (a)(b)		48,783		959,074
CDK Global, Inc.		26,428		1,426,583
Citrix Systems, Inc. (b)		26,310		1,845,910
Electronic Arts, Inc. (b)		51,640		3,434,060
FactSet Research Systems, Inc. (a)		6,934		1,126,844
FireEye, Inc. (a)(b)		22,918		1,120,919
Fortinet, Inc. (b)		23,823		984,605
Informatica Corp. (b)		17,574		851,812
Intuit, Inc.		45,248		4,559,641
King Digital Entertainment PLC		12,936		184,338
Microsoft Corp.		1,327,810		58,622,811
NetSuite, Inc. (a)(b)		6,429		589,861
Nuance Communications, Inc. (b)		42,702		747,712
Oracle Corp.		520,062		20,958,499
PTC, Inc. (b)		19,347		793,614
Red Hat, Inc. (b)		30,090		2,284,734
Salesforce.com, Inc. (b)		107,675		7,497,410
ServiceNow, Inc. (b)		25,245		1,875,956
SolarWinds, Inc. (b)		10,733		495,113
Solera Holdings, Inc.		10,801		481,293
Splunk, Inc. (b)		20,664		1,438,628
SS&C Technologies Holdings, Inc.		12,041		752,562
Symantec Corp.		111,734		2,597,815
Synopsys, Inc. (b)		25,677		1,300,540
Tableau Software, Inc., Class A (a)(b)		8,275		954,107
VMware, Inc., Class A (b)		13,585		1,164,778
Workday, Inc., Class A (b)		17,518		1,338,200
Zynga, Inc., Class A (a)(b)		123,625		353,568

				134,543,135
Specialty Retail — 2.4%
Aaron’s, Inc.		10,431		377,707
Advance Auto Parts, Inc.		12,008		1,912,754
AutoNation, Inc. (b)		12,266		772,513
AutoZone, Inc. (b)		5,128		3,419,863
Bed Bath & Beyond, Inc. (b)		28,119		1,939,649
Best Buy Co., Inc. (a)		49,871		1,626,293
Cabela’s, Inc. (b)		8,126		406,138
CarMax, Inc. (b)		34,343		2,273,850
CST Brands, Inc. (a)		12,369		483,133
Dick’s Sporting Goods, Inc.		15,468		800,778
DSW, Inc., Class A		11,800		393,766
Foot Locker, Inc. (a)		23,027		1,543,039
GameStop Corp., Class A (a)		18,042		775,084
The Gap, Inc. (a)		39,250		1,498,173
GNC Holdings, Inc., Class A		13,936		619,873
The Home Depot, Inc.		213,212		23,694,250
Kate Spade & Co. (a)(b)		20,542		442,475
L Brands, Inc.		40,617		3,482,095
Lowe’s Cos., Inc.		156,212		10,461,518
The Michaels Cos., Inc. (a)(b)		10,085		271,387
O’Reilly Automotive, Inc. (b)		16,577		3,746,071
Office Depot, Inc. (b)		92,052		797,170
Penske Automotive Group, Inc.		6,851		357,006
Ross Stores, Inc.		67,919		3,301,543
Sally Beauty Holdings, Inc. (b)		26,497		836,775
Signet Jewelers Ltd.		13,187		1,691,101
Common Stocks	Shares		Value
Specialty Retail (concluded)
Staples, Inc. (a)		105,278	$	1,611,806
Tiffany & Co.		18,556		1,703,441
TJX Cos., Inc.		111,678		7,389,733
Tractor Supply Co.		22,393		2,014,026
Ulta Salon Cosmetics & Fragrance, Inc. (b)		10,561		1,631,146
Urban Outfitters, Inc. (b)		15,730		550,550
Williams-Sonoma, Inc.		15,170		1,248,036

				84,072,742
Technology Hardware, Storage & Peripherals — 4.2%
3D Systems Corp. (a)(b)		17,990		351,165
Apple, Inc.		945,606		118,602,633
EMC Corp.		318,767		8,412,261
Hewlett-Packard Co.		298,332		8,952,943
Lexmark International, Inc., Class A (a)		9,839		434,884
NCR Corp. (b)		28,464		856,766
NetApp, Inc. (a)		51,252		1,617,513
SanDisk Corp.		34,123		1,986,641
Western Digital Corp. (a)		36,882		2,892,287

				144,107,093
Textiles, Apparel & Luxury Goods — 0.9%
Carter’s, Inc.		8,778		933,102
Coach, Inc. (a)		45,431		1,572,367
Fossil Group, Inc. (a)(b)		6,774		469,845
Hanesbrands, Inc.		65,929		2,196,754
Lululemon Athletica, Inc. (b)		18,475		1,206,418
Michael Kors Holdings Ltd. (b)		32,756		1,378,700
NIKE, Inc., Class B		111,295		12,022,086
PVH Corp.		13,606		1,567,411
Ralph Lauren Corp. (a)		9,884		1,308,246
Skechers U.S.A., Inc., Class A (b)		6,899		757,441
Under Armour, Inc., Class A (b)		29,321		2,446,544
VF Corp.		55,477		3,868,966

				29,727,880
Thrifts & Mortgage Finance — 0.1%
Hudson City Bancorp, Inc.		88,670		876,060
New York Community Bancorp, Inc. (a)		73,303		1,347,309
People’s United Financial, Inc. (a)		51,856		840,586
TFS Financial Corp.		10,620		178,628

				3,242,583
Tobacco — 1.2%
Altria Group, Inc.		322,788		15,787,561
Philip Morris International, Inc.		254,275		20,385,227
Reynolds American, Inc.		67,766		5,059,409

				41,232,197
Trading Companies & Distributors — 0.3%
Air Lease Corp. (a)		16,507		559,587
Fastenal Co. (a)		48,250		2,035,185
GATX Corp. (a)		7,065		375,505
HD Supply Holdings, Inc. (b)		28,422		999,886
MSC Industrial Direct Co., Inc., Class A (a)		7,660		534,438
NOW, Inc. (a)(b)		17,247		343,388
United Rentals, Inc. (a)(b)		15,995		1,401,482
W.W. Grainger, Inc. (a)		10,985		2,599,600
Watsco, Inc.		4,189		518,347
WESCO International, Inc. (a)(b)		7,116		488,442

				9,855,860
Transportation Infrastructure — 0.0%
Macquarie Infrastructure Corp.		11,535		953,137

See Notes to Financial Statements.



26	BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

Large Cap Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Water Utilities — 0.1%
American Water Works Co., Inc.		29,666	$	1,442,658
Aqua America, Inc. (a)		28,494		697,818

				2,140,476
Wireless Telecommunication Services — 0.2%
SBA Communications Corp., Class A (b)		21,249		2,442,997
Sprint Corp. (a)(b)		119,519		545,007
T-Mobile U.S., Inc. (b)		45,071		1,747,403
Telephone & Data Systems, Inc.		15,127		444,734
United States Cellular Corp. (b)		2,114		79,634

				5,259,775
Total Long-Term Investments (Cost — $3,041,470,170) — 99.5%				3,445,873,599


Short-Term Securities	Shares		Value
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (c)(d)		123,795,891	$	123,795,891
BlackRock Cash Funds: Prime, SL Agency Shares, 0.13% (c)(d)(e)		267,780,214		267,780,214
Total Short-Term Securities (Cost — $391,576,105) — 11.3%				391,576,105
Total Investments (Cost — $3,433,046,275) — 110.8%				3,837,449,704
Liabilities in Excess of Other Assets — (10.8)%				(374,358,439	)

Net Assets — 100.0%			$	3,463,091,265


Notes to Schedule of Investments

(a)

Security, or a portion of security, is on loan.

(b)

Non-income producing security.

(c)

During the period ended June 30, 2015, investments in issuers considered to be affiliates of the Master Portfolio for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


Affiliate	Shares Held at December 31, 2014		Shares Purchased			Shares Sold			Shares Held at June 30, 2015		Value at June 30, 2015		Income			Realized Gain
BlackRock Cash Funds: Institutional, SL Agency Shares		79,872,532		43,923,359	¹		—			123,795,891	$	123,795,891	$	66,570			—
BlackRock Cash Funds: Prime, SL Agency Shares		33,734,031		234,046,183	¹		—			267,780,214	$	267,780,214	$	345,917	²		—
BlackRock, Inc.		16,270		4,660			(338	)		20,592	$	7,124,420	$	83,509		$	12,868
The PNC Financial Services Group, Inc.		68,164		19,506			(2,660	)		85,010	$	8,131,207	$	77,652		$	33,790
iShares Russell 1000 ETF		191,542		—			(191,542	)		—		—		—		$	2,938,679
¹ Represents net shares purchased.
² Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.

(d)

Represents the current yield as of report date.

(e)

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

•

As of June 30, 2015, financial futures contracts outstanding were as follows:


Contracts Long		Issue	Exchange	Expiration	Notional Value		Unrealized Depreciation
	165	S&P 500 E-Mini Index	Chicago Mercantile	September 2015	$	16,948,800	$	(341,656	)
	13	S&P MidCap 400 E-Mini Index	Chicago Mercantile	September 2015	$	1,947,530		(14,821	)
	Total						$	(356,477	)

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that the Master Portfolio has the ability to access

•

See Notes to Financial Statements.



BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015	27


Schedule of Investments (concluded)		Large Cap Index Master Portfolio

As of June 30, 2015, the following tables summarize the Master Portfolio’s investments and derivative financial instruments categorized in the disclosure hierarchy:


	Level 1			Level 2	Level 3	Total
Assets:
Investments:
Long-Term Investments¹:
Common Stocks	$	3,445,873,599		—	—	$	3,445,873,599
Short-Term Securities:
Short-Term Securities		391,576,105		—	—		391,576,105

Total	$	3,837,449,704		—	—	$	3,837,449,704

¹ See above Schedule of Investments for values in each industry.
	Level 1			Level 2	Level 3	Total
Derivative Financial Instruments²
Liabilities:
Equity contracts	$	(356,477	)	—	—	$	(356,477	)
² Derivative financial instruments are financial futures contracts, which are valued at the unrealized appreciation (depreciation) on the instrument.


	Level 1		Level 2			Level 3	Total
Assets:
Cash pledged for financial futures contracts	$	2,709,800		—		—	$	2,709,800
Liabilities:
Collateral on securities loaned at value		—	$	(267,780,214	)	—		(267,780,214	)

Total	$	2,709,800	$	(267,780,214	)	—	$	(265,070,414	)

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



28	BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015


Statement of Assets and Liabilities		Large Cap Index Master Portfolio


June 30, 2015 (Unaudited)

Assets
Investments at value — unaffiliated (including securities loaned of $262,037,762) (cost — $3,028,629,033)	$	3,430,617,972
Investments at value — affiliated (cost — $404,417,242)		406,831,732
Cash pledged — financial futures contracts		2,709,800
Receivables:
Dividends		3,876,057
Investments sold		79,581,478
Securities lending income — affiliated		58,419
Variation margin receivable on financial futures contracts		99,361
Prepaid expenses		173

Total assets		3,923,774,992


Liabilities
Collateral on securities loaned at value		267,780,214
Payables:
Investments purchased		146,668,837
Investment advisory fees		81,793
Officer’s and Trustees’ fees		5,310
Withdrawals to investors		46,065,122
Other accrued expenses payable		82,451

Total liabilities		460,683,727

Net Assets	$	3,463,091,265


Net Assets Consist of
Investors’ capital	$	3,059,044,313
Net unrealized appreciation		404,046,952

Net Assets	$	3,463,091,265


Statement of Operations		Large Cap Index Master Portfolio


Six Months Ended June 30, 2015 (Unaudited)

Investment Income
Dividends — unaffiliated	$	30,179,252
Securities lending — affiliated — net		345,917
Dividends — affiliated		161,161
Interest — affiliated		66,570
Foreign taxes withheld		(12,275	)

Total income		30,740,625


Expenses
Investment advisory		686,899
Accounting services		62,572
Trustees		37,480
Professional		25,040
Printing		816
Miscellaneous		255

Total expenses		813,062
Less fees waived and/or reimbursed by the Manager		(26,717	)

Total expenses after fees waived and/or reimbursed		786,345

Net investment income		29,954,280


Realized and Unrealized Gain (Loss)
Net realized gain from:
Investments — unaffiliated		18,113,089
Investments — affiliated		2,985,337
Financial futures contracts		1,665,637

		22,764,063

Net change in unrealized appreciation (depreciation) on:
Investments — unaffiliated		6,120,943
Investments — affiliated		(2,210,597	)
Financial futures contracts		(1,058,431	)

		2,851,915

Net realized and unrealized gain		25,615,978

Net Increase in Net Assets Resulting from Operations	$	55,570,258


Statements of Changes in Net Assets


	Large Cap Index Master Portfolio
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	29,954,280		$	34,627,320
Net realized gain		22,764,063			14,179,093
Net change in unrealized appreciation (depreciation)		2,851,915			187,555,527

Net increase in net assets resulting from operations		55,570,258			236,361,940


Capital Transactions
Proceeds from contributions		875,607,763			3,160,600,185
Value of withdrawals		(241,484,359	)		(1,756,436,556	)

Net increase in net assets derived from capital transactions		634,123,404			1,404,163,629


Net Assets
Total increase in net assets		689,693,662			1,640,525,569
Beginning of period		2,773,397,603			1,132,872,034

End of period	$	3,463,091,265		$	2,773,397,603


Financial Highlights		Large Cap Index Master Portfolio


	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,							Period March 31, 2011¹ to December 31, 2011
	Six Months Ended June 30, 2015 (Unaudited)			2014		2013			2012		Period March 31, 2011¹ to December 31, 2011

Total Return
Total Return		1.65%	²		13.27%		32.88%			16.39%		(4.68)%	²


Ratio to Average Net Assets
Total expenses		0.05%	³		0.06%		0.08%	⁴		0.09%		0.40%	^3,5

Total expenses after fees waived and/or reimbursed		0.05%	³		0.06%		0.08%	⁴		0.09%		0.16%	³

Net investment income		1.85%	³		1.92%		1.96%	⁴		2.30%		2.04%	³


Supplemental Data
Net assets, end of period (000)		$3,463,091			$2,773,398		$1,132,872			$440,092		$56,881

Portfolio turnover rate		4%			6%		14%			16%		9%

Commencement of operations.

Aggregate total return.

Annualized.

⁴

Excludes expenses incurred indirectly as a result of investments in underlying funds of approximately 0.01% for the year ending December 31, 2014.

⁵

Organization costs were not annualized in the calculation of the expense ratio.


Notes to Financial Statements (Unaudited)		Large Cap Index Master Portfolio

1. Organization:

Large Cap Index Master Portfolio (formerly known as Russell 1000^® Index Master Portfolio) (the “Master Portfolio”), a series of Master Investment Portfolio (“MIP”), is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a diversified, open-end management investment company. MIP is organized as a Delaware statutory trust.

2. Significant Accounting Policies:

Segregation and Collateralization: In cases where the Master Portfolio enters into certain investments (e.g., financial futures contracts) that would be “senior securities” for 1940 Act purposes, the Master Portfolio may segregate or designate on its books and records cash or liquid securities having a market value at least equal to the amount of the Master Portfolio’s future obligations under such investments. Doing so allows the investment to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Master Portfolio may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments or obligations.



BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015	33


Notes to Financial Statements (continued)		Large Cap Index Master Portfolio

3. Securities and Other Investments:

The market value of securities on loan, all of which were classified as common stocks in the Master Portfolio’s Schedule of Investments, and the value of the 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. As of June 30, 2015, any securities on loan were collateralized by cash. The cash collateral invested by the securities lending agent, BlackRock Institutional Trust Company, N.A. (“BTC”), if any, is disclosed in the Schedule of Investments.

As of June 30, 2015, the following table is a summary of the Master Portfolio’s securities lending agreements by counterparty, which are subject to offset under an MSLA:


Counterparty	Securities Loaned at Value		Cash Collateral Received¹			Net Amount
Barclays Capital, Inc.	$	1,621,716	$	(1,621,716	)		—
BNP Paribas S.A.		2,667,113		(2,667,113	)		—
Credit Suisse Securities (USA) LLC		11,474,045		(11,474,045	)		—
Deutsche Bank Securities, Inc.		4,531,289		(4,531,289	)		—
Goldman Sachs & Co.		85,354,304		(85,354,304	)		—
HSBC Bank PLC		8,940,691		(8,940,691	)		—
Jefferies LLC		14,564,675		(14,564,675	)		—
JP Morgan Securities LLC		34,962,599		(34,962,599	)		—
Merrill Lynch, Pierce, Fenner & Smith, Inc.		20,812,683		(20,812,683	)		—
Morgan Stanley		29,734,125		(29,734,125	)		—
Nomura Securities International Inc.		680,544		(680,544	)		—
SG Americas Securities LLC		839,769		(839,769	)		—
State Street Bank & Trust Company		36,819,674		(36,819,674	)		—
UBS Securities LLC		9,034,535		(9,034,535	)		—

Total	$	262,037,762	$	(262,037,762	)		—

Collateral with a value of $267,780,214 has been received in connection with securities lending agreements. Collateral received in excess of the value of securities loaned from the individual counterparty is not shown for financial reporting purposes.



34	BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015


Notes to Financial Statements (continued)		Large Cap Index Master Portfolio

event of borrower default. The Master Portfolio could suffer 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.

4. Derivative Financial Instruments:

The Master Portfolio engages in various portfolio investment strategies using derivative contracts both to increase the returns of the Master Portfolio and/or to manage economically its exposure to certain risks such as equity risk. These contracts may be transacted on an exchange or over-the-counter (“OTC”).

Financial Futures Contracts: The Master Portfolio invests in long and/or short positions in financial futures contracts and options on financial futures contracts to gain exposure to, or economically hedge against, changes in the value of equity securities (equity risk). Financial futures contracts are agreements between the Master Portfolio and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and at a specified date. Depending on the terms of the particular contract, financial futures contracts are settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date.

The following is a summary of the Master Portfolio’s derivative financial instruments categorized by risk exposure:

Includes cumulative depreciation on financial futures contracts as reported in the Schedule of Investments. Only current day’s margin variation is reported within the Statement of Assets and Liabilities.

For the six months ended June 30, 2015, the average quarterly balances of outstanding derivative financial instruments were as follows:


Financial futures contracts:
Average notional value of contracts purchased		$47,397,685



BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015	35


Notes to Financial Statements (continued)		Large Cap Index Master Portfolio

of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency) of the clearing broker or clearinghouse. Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Master Portfolio.

5. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock for 1940 Act purposes.

MIP, on behalf of the Master Portfolio, entered into an Investment Advisory Agreement with the Manager, the Master Portfolio’s investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory and administration services. The Manager is responsible for the management of the Master Portfolio’s portfolio and provides the necessary personnel, facilities, equipment and certain other services to the operations of the Master Portfolio. For such services, the Master Portfolio pays the Manager a monthly fee based on a percentage of the Master Portfolio’s average daily net assets at an annual rate of 0.03%. Prior to April 30, 2015, the annual rate as a percentage of average daily net assets was 0.05%.

The Manager contractually agreed to waive and/or reimburse fees or expenses, excluding interest expense, dividend expense, acquired fund fees and expenses and certain other fund expenses, which constitute extraordinary expenses not incurred in the ordinary course of the Master Portfolio’s business, in order to limit expenses of certain feeder funds, which invest their assets in the Master Portfolio. The Manager has agreed not to reduce or discontinue this contractual waiver or reimbursement prior to May 1, 2016 unless approved by the Board, including a majority of the Independent Trustees.

The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the Master Portfolio pays to the Manager indirectly through its investment in affiliated money market funds. This amount is included in fees waived by the Manager in the Statement of Operations. However, the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid in connection with the Master Portfolio’s investments in other affiliated investment companies, if any. For the six months ended June 30, 2015, the amount waived was $26,717.

Pursuant to a securities lending agreement, the Master Portfolio retains 71.5% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment fees. In addition, commencing the business day following the date that the aggregate securities lending income earned across certain funds in the Equity-Liquidity Complex in a calendar year exceeds a specified threshold, the Master Portfolio, pursuant to the securities lending agreement, will retain for the remainder of the calendar year securities lending income in an amount equal to 75% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment fees.

The share of securities lending income earned by the Master Portfolio is shown as securities lending — affiliated — net in the Statement of Operations. For the six months ended June 30, 2015, the Master Portfolio paid BTC $133,754 for securities lending agent services and collateral investment fees.

Certain officers and/or trustees of MIP are officers and/or directors of BlackRock or its affiliates.

6. Purchases and Sales:

For the six months ended June 30, 2015, purchases and sales of investments excluding short-term securities were $851,187,920 and $120,687,479, respectively.



36	BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015


Notes to Financial Statements (concluded)		Large Cap Index Master Portfolio

7. Income Tax Information:

As of June 30, 2015, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:


Tax cost	$	3,438,538,563

Gross unrealized appreciation	$	464,481,526
Gross unrealized depreciation		(65,570,385	)

Net unrealized appreciation	$	398,911,141

8. Bank Borrowings:

MIP, on behalf of the Master Portfolio, along with certain other funds managed by the Manager and its affiliates (“Participating Funds”), is a party to a 364-day, $2.1 billion credit agreement with a group of lenders, under which the Master Portfolio may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Master Portfolio, can borrow up to an aggregate commitment amount of $1.6 billion, subject to asset coverage and other limitations as specified in the agreement. The credit agreement has the following terms: a fee of 0.06% 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 2016 unless extended or renewed. Participating Funds paid administration, legal and arrangement fees, which are included in miscellaneous expenses in the Statement of Operations, and along with commitment 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 June 30, 2015, the Master Portfolio did not borrow under the credit agreement.

9. Principal Risks:

10. Subsequent Events:



BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015	37


Disclosure of Investment Advisory Agreement

Disclosure of Investment Advisory Agreement

Activities and Composition of the Board

The Agreement



38	BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015


Disclosure of Investment Advisory Agreement (continued)

third parties); the viability of specific funds; fund size and manager capacity; BlackRock’s research capabilities; portfolio managers’ investments in funds they manage; funds’ portfolio risk targets; and management fee levels and breakpoints. The Board further discussed with BlackRock: BlackRock’s management structure; portfolio turnover, execution quality and use of soft dollars; BlackRock’s portfolio manager compensation and performance accountability; marketing support for the funds; services provided to the funds by BlackRock affiliates; and BlackRock’s oversight of relationships with third party service providers.

Board Considerations in Approving the Agreement

Funds are ranked by Lipper in quartiles, ranging from first to fourth, where first is the most desirable quartile position and fourth is the least desirable.



BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015	39


Disclosure of Investment Advisory Agreement (continued)

The Board noted that for each of the one-year, three-year and since-inception periods reported, the Portfolio’s gross performance (before expenses and fees), as agreed upon by the Board, was within tolerance of its benchmark. BlackRock believes that gross performance relative to the benchmark is an appropriate performance metric for the Portfolio.



40	BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015


Disclosure of Investment Advisory Agreement (continued)

cable, and other funds the Board currently oversees for the year ended December 31, 2014 compared to available aggregate profitability data provided for the two prior years. The Board reviewed BlackRock’s profitability with respect to certain other U.S. fund complexes managed by the Manager and/or its affiliates. The Board reviewed BlackRock’s assumptions and methodology of allocating expenses in the profitability analysis, noting the inherent limitations in allocating costs among various advisory products. The Board recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, precision of expense allocations and business mix. As a result, calculating and comparing profitability at individual fund levels is difficult.

The Board noted that the Master Portfolio’s/Portfolio’s contractual management fee rate ranked in the first quartile, and that the actual management fee rate and the Portfolio’s total expense ratio each ranked in the first quartile, relative to the Portfolio’s Expense Peers. The Board also noted that BlackRock has contractually agreed to a cap on the Portfolio’s total expenses as a percentage of the Portfolio’s average daily net assets on a class-by-class basis. The Board also noted that BlackRock proposed, and the Board agreed to, a contractual reduction of the Master Portfolio’s advisory fee. This advisory fee reduction was implemented on April 30, 2015. The Board further noted that BlackRock proposed, and the Board agreed to, a lower contractual expense cap on the Portfolio on a class-by-class basis. This expense cap reduction was implemented on April 30, 2015.



BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015	41


Disclosure of Investment Advisory Agreement (concluded)

Conclusion



42	BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015


Officers and Trustees

Rodney D. Johnson, Chair of the Board and Trustee

David O. Beim, Trustee

Collette Chilton, Trustee

Frank J. Fabozzi, Trustee

Dr. Matina S. Horner, Trustee

Herbert I. London, Trustee

Cynthia A. Montgomery, Trustee

Barbara G. Novick, Trustee

Joseph P. Platt, Trustee

Robert C. Robb, Jr., Trustee

Toby Rosenblatt, Trustee

Mark Stalnecker, Trustee

Kenneth L. Urish, Trustee

Frederick W. Winter, Trustee

John M. Perlowski, President and Chief Executive Officer

Richard Hoerner, CFA, Vice President

Fernanda Piedra, Anti-Money Laundering Compliance Officer

Jennifer McGovern, Vice President

Neal Andrews, Chief Financial Officer

Jay Fife, Treasurer

Charles Park, Chief Compliance Officer

Benjamin Archibald, Secretary

Effective March 1, 2015, Charles Park resigned as Anti-Money Laundering Compliance Officer of the Trust/MIP and Fernanda Piedra became Anti-Money Laundering Compliance Officer of the Trust/MIP.

Effective May 18, 2015, Ian MacKinnon resigned as a Trustee of the Trust/MIP.



BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015	43


Additional Information

General Information

Householding

Availability of Quarterly Schedule of Investments

The Fund/Master Portfolio file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s/Master Portfolio’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The Fund’s/Master Portfolio’s Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762.

Availability of Proxy Voting Policies and Procedures

Availability of Proxy Voting Record

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 http://www.blackrock.com for more information.

Shareholder Privileges

Account 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.



44	BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015


Additional Information (concluded)

BlackRock Privacy Principles



BLACKROCK LARGE CAP INDEX FUND	JUNE 30, 2015	45

LOGO


R1000-6/15-SAR

JUNE 30, 2015

SEMI-ANNUAL REPORT (UNAUDITED)

BlackRock S&P 500 Index Fund | of BlackRock Funds III

Not FDIC Insured • May Lose Value • No Bank Guarantee


Table of Contents


	Page
The Markets in Review		3
Semi-Annual Report:
Fund Summary		4
About Fund Performance		6
Disclosure of Expenses		6
Derivative Financial Instruments		6
Fund Financial Statements:
Statement of Assets and Liabilities		7
Statement of Operations		8
Statements of Changes in Net Assets		9
Fund Financial Highlights		10
Fund Notes to Financial Statements		15
Master Portfolio Information		18
Master Portfolio Financial Statements:
Schedule of Investments		19
Statement of Assets and Liabilities		26
Statement of Operations		27
Statements of Changes in Net Assets		28
Master Portfolio Financial Highlights		28
Master Portfolio Notes to Financial Statements		29
Disclosure of Investment Advisory Agreement		35
Officers and Trustees		40
Additional Information		41

LOGO



2	BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015

The Markets in Review

Dear Shareholder,

Sincerely,

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

LOGO

Rob Kapito

President, BlackRock Advisors, LLC


Total Returns as of June 30, 2015
	6-month			12-month
U.S. large cap equities (S&P 500^® Index)		1.23	%		7.42	%
U.S. small cap equities (Russell 2000^® Index)		4.75			6.49
International equities (MSCI Europe, Australasia, Far East Index)		5.52			(4.22	)
Emerging market equities (MSCI Emerging Markets Index)		2.95			(5.12	)
3-month Treasury bills (BofA Merrill Lynch 3-Month U.S. Treasury Bill Index)		0.01			0.02
U.S. Treasury securities (BofA Merrill Lynch 10-Year U.S. Treasury Index)		(0.51	)		3.79
U.S. investment-grade bonds (Barclays U.S. Aggregate Bond Index)		(0.10	)		1.86
Tax-exempt municipal bonds (S&P Municipal Bond Index)		0.01			3.00
U.S. high yield bonds (Barclays U.S. Corporate High Yield 2% Issuer Capped Index)		2.53			(0.39	)
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.



		THIS PAGE NOT PART OF YOUR FUND REPORT				3


Fund Summary as of June 30, 2015


Investment Objective

BlackRock S&P 500 Index Fund’s (the “Fund”) (formerly known as BlackRock S&P 500 Stock Fund) investment objective is to provide investment results that correspond to the total return performance of publicly-traded common stocks in the aggregate, as represented by the Standard & Poor’s (“S&P”) 500^® Index.


Portfolio Management Commentary

How did the Fund perform?

•

For the six months ended June 30, 2015, the Fund’s Institutional Shares returned 1.20%, Service Shares returned 1.14%, Investor A Shares returned 1.07%, Investor C1 Shares returned 0.71% and Class K Shares returned 1.23%. The benchmark S&P 500^® Index returned 1.23% for the same period.

•

Returns for the Fund’s respective share classes differ from the benchmark index due to individual share-class expenses. The Fund invests all of its assets in S&P 500 Index Master Portfolio (the “Master Portfolio”) (formerly known as S&P 500 Stock Master Portfolio), a series of Master Investment Portfolio.

Describe the market environment.

•

The year started with U.S. stock prices falling as lower oil prices punished the energy sector and the negative impact of a stronger dollar began to show in the earnings of large global exporting companies. High valuations in U.S. stocks drove equity investors toward more appealing opportunities overseas. U.S. stocks rebounded in February due to increased merger and acquisition activity and strong earnings reports from cyclical technology companies. However, stock prices came under pressure again in March as an improving labor market furthered the appreciation of the U.S. dollar and raised investors’ focus on the timing of an expected Federal Reserve move toward tightening policy. U.S. equities came back into favor in April, after a powerful rally in European equities left valuations in the United States looking more appealing by comparison. U.S. stocks continued to outperform international markets in the following months as increasing turmoil around Greece’s debt troubles drove investors to the relative stability of U.S. markets.

•

Describe recent portfolio activity.

•

During the period, as changes were made to the composition of the S&P 500^® Index, the Master Portfolio purchased and sold securities to maintain its objective of replicating the risks and return of the benchmark index.

Describe portfolio positioning at period end.

•

The Master Portfolio remains positioned to match the risk characteristics of its benchmark index, irrespective of the market’s future direction.



4	BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015


Total Return Based on a $10,000 Investment

LOGO

Assuming transaction costs and other operating expenses, including administration fees, if any.

The Fund invests all of its assets in the Master Portfolio. The Master Portfolio invests primarily in a diversified portfolio of equity securities of large companies located in the United States.

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


Performance Summary for the Period Ended June 30, 2015


	6-Month Total Returns			Average Annual Total Returns⁴
				1 Year			5 Years			10 Years
				w/o sales charge			w/o sales charge			w/o sales charge
Institutional		1.20	%		7.34	%		17.13	%		7.72	%
Service		1.14			7.21			16.98			7.59
Investor A		1.07			7.07			16.83			7.45
Investor C1		0.71			6.30			16.00			6.68
Class K		1.23			7.41			17.21			7.79
S&P 500^® Index		1.23			7.42			17.34			7.90

⁴

Past performance is not indicative of future results.

Expense Example


	Actual						Hypothetical⁶
	Beginning Account Value January 1, 2015		Ending Account Value June 30, 2015		Expenses Paid During the Period⁵		Beginning Account Value January 1, 2015		Ending Account Value June 30, 2015		Expenses Paid During the Period⁵		Annualized Expense Ratio
Institutional	$	1,000.00	$	1,012.00	$	0.55	$	1,000.00	$	1,024.25	$	0.55		0.11	%
Service	$	1,000.00	$	1,011.40	$	1.15	$	1,000.00	$	1,023.65	$	1.15		0.23	%
Investor A	$	1,000.00	$	1,010.70	$	1.79	$	1,000.00	$	1,023.01	$	1.81		0.36	%
Investor C1	$	1,000.00	$	1,007.10	$	5.37	$	1,000.00	$	1,019.44	$	5.41		1.08	%
Class K	$	1,000.00	$	1,012.30	$	0.20	$	1,000.00	$	1,024.60	$	0.20		0.04	%

⁵

For each class of the Fund, expenses are equal to the annualized net expense ratio for the class, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period shown). Because the Fund invests significantly in the Master Portfolio, the expense example reflects the net expenses of both the Fund and the Master Portfolio in which it invests.

⁶

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

See “Disclosure of Expenses” on page 6 for further information on how expenses were calculated.



BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015	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.

•

Service Shares are not subject to any sales charge. These shares are subject to a service fee of 0.15% per year (but no distribution fee) and are available only to certain eligible investors.

•

Investor A Shares are not subject to any sales charge. These shares are subject to 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 C1 Shares are not subject to any sales charge. These shares are subject to a distribution fee of 0.75% per year and a service fee of 0.15% per year. These shares are only available through distribution reinvestments by current holders and for purchase by certain employer-sponsored retirement plans.

Disclosure of Expenses

Shareholders of the Fund may incur the following charges: (a) transactional expenses, such as sales charges; and (b) operating expenses, including administration fees, service and distribution fees, including 12b-1 fees, acquired fund fees and expenses and other Fund expenses. The expense example on previous page (which is based on a hypothetical investment of $1,000 invested on January 1, 2015 and held through June 30, 2015) 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.

Derivative Financial Instruments

The Fund may invest in various derivative financial instruments. Derivative financial instruments are used to obtain exposure to a security, index and/or market without owning or taking physical custody of securities or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage. Derivative financial instruments also involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the derivative financial instrument. The Fund’s ability to use a derivative financial instrument successfully depends on the investment advisor’s ability to predict pertinent market movements accurately, which cannot be assured. The use of derivative financial instruments may result in losses greater than if they had not been used, may limit the amount of appreciation a Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Fund’s investments in these instruments are discussed in detail in the Notes to Financial Statements.



6	BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015


Statement of Assets and Liabilities		BlackRock S&P 500 Index Fund


June 30, 2015 (Unaudited)

Assets
Investments at value — Master Portfolio (cost — $3,833,232,122)	$	5,497,382,056
Capital shares sold receivable		54,732,859

Total assets		5,552,114,915


Liabilities
Payables:
Capital shares redeemed		29,469,939
Contributions to the Master Portfolio		25,262,920
Income dividends		15,480,059
Service and distribution fees		347,369
Administration fees		256,782
Professional fees		7,668
Other accrued expenses payable		300

Total liabilities		70,825,037

Net Assets	$	5,481,289,878


Net Assets Consist of
Paid-in capital	$	3,668,401,521
Undistributed net investment income		433,254
Accumulated net realized gain		148,305,169
Net unrealized appreciation (depreciation)		1,664,149,934

Net Assets	$	5,481,289,878


Net Asset Value
Institutional — Based on net assets of $2,933,223,378 and 11,820,719 shares outstanding, unlimited number of shares authorized, no par value	$	248.14

Service — Based on net assets of $275,599,353 and 1,110,630 shares outstanding, unlimited number of shares authorized, no par value	$	248.15

Investor A — Based on net assets of $1,213,413,016 and 4,890,153 shares outstanding, unlimited number of shares authorized, no par value	$	248.13

Investor C1 — Based on net assets of $77,067,923 and 310,555 shares outstanding, unlimited number of shares authorized, no par value	$	248.16

Class K — Based on net assets of $981,986,208 and 3,956,761 shares outstanding, unlimited number of shares authorized, no par value	$	248.18


Statement of Operations		BlackRock S&P 500 Index Fund


Six Months Ended June 30, 2015 (Unaudited)

Investment Income
Net investment income allocated from the Master Portfolio:
Dividends — unaffiliated	$	49,207,000
Dividends — affiliated		295,396
Interest — affiliated		148,242
Securities lending — affiliated — net		137,345
Foreign taxes withheld		(10,230	)
Expenses		(1,262,948	)
Fees waived		142,344

Total income		48,657,149


Fund Expenses
Administration — Institutional		903,885
Administration — Service		57,058
Administration — Investor A		415,874
Administration — Investor C1		55,073
Service — Service		213,958
Service — Investor A		1,486,185
Service and distribution — Investor C1		354,032
Professional		9,231
Miscellaneous		325

Total expenses		3,495,621
Less administration fees waived		(9,231	)

Total expenses after fees waived		3,486,390

Net investment income		45,170,759


Realized and Unrealized Gain (Loss) Allocation from the Master Portfolio
Net realized gain from investments, short sales and financial futures contracts		52,305,569
Net change in unrealized appreciation (depreciation) on investments, short sales and financial futures contracts		(53,847,936	)

Net realized and unrealized loss		(1,542,367	)

Net Increase in Net Assets Resulting from Operations	$	43,628,392


Statements of Changes in Net Assets


	BlackRock S&P 500 Index Fund
Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	45,170,759		$	72,193,968
Net realized gain		52,305,569			57,400,988
Net change in unrealized appreciation (depreciation)		(53,847,936	)		382,247,974

Net increase in net assets resulting from operations		43,628,392			511,842,930


Distributions to Shareholders From¹
Net investment income:
Institutional		(24,916,467	)		(32,595,160	)
Service		(2,289,146	)		(4,674,737	)
Investor A		(9,052,266	)		(17,698,998	)
Investor C1		(301,556	)		(685,660	)
Class K		(8,826,900	)		(16,857,221

Decrease in net assets resulting from distributions to shareholders		(45,386,335	)		(72,511,776	)


Capital Share Transactions
Net increase in net assets derived from capital share transactions		1,143,652,334			127,074,885


Net Assets
Total increase in net assets		1,141,894,391			566,406,039
Beginning of period		4,339,395,487			3,772,989,448

End of period	$	5,481,289,878		$	4,339,395,487

Undistributed net investment income, end of period	$	433,254		$	648,830

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


Financial Highlights		BlackRock S&P 500 Index Fund


	Institutional
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014			Period April 10, 2013¹ to December 31, 2013

Per Share Operating Performance
Net asset value, beginning of period	$	247.36		$	221.97		$	190.60

Net investment income²		2.28			4.28			2.89
Net realized and unrealized gain		0.68			25.50			31.21

Net increase from investment operations		2.96			29.78			34.10

Distributions from net investment income³		(2.18	)		(4.39	)		(2.73	)

Net asset value, end of period	$	248.14		$	247.36		$	221.97


Total Return⁴
Based on net asset value		1.20%	⁵		13.53%			18.03%	⁵


Ratios to Average Net Assets⁶
Total expenses⁷		0.11%	⁸		0.14%			0.23%	⁸

Total expenses after fees waived⁷		0.11%	⁸		0.14%			0.23%	⁸

Net investment income⁷		1.84%	⁸		1.84%			1.93%	⁸


Supplemental Data
Net assets, end of period (000)	$	2,933,223		$	1,909,077		$	1,570,760

Portfolio turnover rate of the Master Portfolio		1%			3%			2%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income.

⁷

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of less than 0.01%.

⁸

Annualized.


Financial Highlights (continued)		BlackRock S&P 500 Index Fund


	Service
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014			Period April 19, 2013¹ to December 31, 2013

Per Share Operating Performance
Net asset value, beginning of period	$	247.35		$	221.97		$	186.71

Net investment income²		2.14			3.98			2.59
Net realized and unrealized gain		0.68			25.50			35.22

Net increase from investment operations		2.82			29.48			37.81

Distributions from net investment income³		(2.02	)		(4.10	)		(2.55	)

Net asset value, end of period	$	248.15		$	247.35		$	221.97


Total Return⁴
Based on net asset value		1.14%	⁵		13.39%			20.39%	⁵


Ratios to Average Net Assets⁶
Total expenses⁷		0.23%	⁸		0.27%			0.35%	⁸

Total expenses after fees waived⁷		0.23%	⁸		0.27%			0.35%	⁸

Net investment income⁷		1.72%	⁸		1.71%			1.81%	⁸


Supplemental Data
Net assets, end of period (000)	$	275,599		$	277,856		$	252,419

Portfolio turnover rate of the Master Portfolio		1%			3%			2%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income.

⁷

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of less than 0.01%.

⁸

Annualized.


Financial Highlights (continued)		BlackRock S&P 500 Index Fund


	Investor A
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014			Period April 10, 2013¹ to December 31, 2013

Per Share Operating Performance
Net asset value, beginning of period	$	247.35		$	221.96		$	190.60

Net investment income²		1.98			3.68			2.50
Net realized and unrealized gain		0.67			25.51			31.23

Net increase from investment operations		2.65			29.19			33.73

Distributions from net investment income³		(1.87	)		(3.80	)		(2.37	)

Net asset value, end of period	$	248.13		$	247.35		$	221.96


Total Return⁴
Based on net asset value		1.07%	⁵		13.25%			17.82%	⁵


Ratios to Average Net Assets⁶
Total expenses⁷		0.36%	⁸		0.39%			0.48%	⁸

Total expenses after fees waived⁷		0.36%	⁸		0.39%			0.48%	⁸

Net investment income⁷		1.59%	⁸		1.59%			1.67%	⁸


Supplemental Data
Net assets, end of period (000)	$	1,213,413		$	1,149,714		$	1,046,428

Portfolio turnover rate of the Master Portfolio		1%			3%			2%

Commencement of operations.

Based on average shares outstanding.

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

⁴

Where applicable, assumes the reinvestment of distributions.

⁵

Aggregate total return.

⁶

Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income.

⁷

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of less than 0.01%.

⁸

Annualized.


Financial Highlights (continued)		BlackRock S&P 500 Index Fund


	Investor C1
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014			Period April 19, 2013¹ to December 31, 2013

Per Share Operating Performance
Net asset value, beginning of period	$	247.36		$	221.98		$	186.71

Net investment income²		1.08			1.98			1.38
Net realized and unrealized gain		0.68			25.48			35.22

Net increase from investment operations		1.76			27.46			36.60

Distributions from net investment income³		(0.96	)		(2.08	)		(1.33	)

Net asset value, end of period	$	248.16		$	247.36		$	221.98


Total Return⁴
Based on net asset value		0.71%	⁵		12.42%			19.68%	⁵


Ratios to Average Net Assets⁶
Total expenses⁷		1.08%	⁸		1.12%			1.19%	⁸

Total expenses after fees waived⁷		1.08%	⁸		1.12%			1.19%	⁸

Net investment income⁷		0.87%	⁸		0.85%			0.97%	⁸


Supplemental Data
Net assets, end of period (000)	$	77,068		$	79,476		$	77,040

Portfolio turnover rate of the Master Portfolio		1%			3%			2%

Commencement of operations.

Based on average shares outstanding.

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

⁴

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

⁵

Aggregate total return.

⁶

Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income.

⁷

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of less than 0.01%.

⁸

Annualized.


Financial Highlights (concluded)		BlackRock S&P 500 Index Fund


	Class K
	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014			2013			2012			2011			2010

Per Share Operating Performance
Net asset value, beginning of period	$	247.39		$	221.99		$	171.12		$	150.57		$	150.60		$	133.49

Net investment income¹		2.38			4.44			3.91			3.57			2.97			2.55
Net realized and unrealized gain (loss)		0.67			25.51			50.74			20.23			(0.05	)		17.10

Net increase from investment operations		3.05			29.95			54.65			23.80			2.92			19.65

Distributions from:²
Net investment income		(2.26	)		(4.55	)		(3.78	)		(3.25	)		(2.92	)		(2.54	)
Return of capital		—			—			—			—			(0.03	)		—

Total distributions		(2.26	)		(4.55	)		(3.78	)		(3.25	)		(2.95	)		(2.54	)

Net asset value, end of period	$	248.18		$	247.39		$	221.99		$	171.12		$	150.57		$	150.60


Total Return³
Based on net asset value		1.23%	⁴		13.61%			32.21%			15.85%			2.00%			14.91%


Ratios to Average Net Assets⁵
Total expenses		0.04%	⁶		0.07%	⁶		0.17%	⁶		0.26%	⁷		0.19%	⁶		0.21%

Total expenses after fees waived		0.04%	⁶		0.07%	⁶		0.16%	⁶		0.18%	⁷		0.18%	⁶		0.20%

Net investment income		1.92%	⁶		1.91%	⁶		1.96%	⁶		2.15%	⁷		1.95%	⁶		1.87%


Supplemental Data
Net assets, end of period (000)	$	981,986		$	923,271		$	826,342		$	380,066		$	255,280		$	277,661

Portfolio turnover rate of the Master Portfolio		1%			3%			2%			10%			5%			9%

Based on average shares outstanding.

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

Where applicable, assumes the reinvestment of distributions.

⁴

Aggregate total return.

⁵

Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the six months ended June 30, 2015 and the four years ended December 31, 2014, which include gross expenses.

⁶

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of less than 0.01%.

⁷

Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.01%.


Notes to Financial Statements (Unaudited)

1. Organization:

BlackRock S&P 500 Index Fund (the “Fund”) (formerly known as BlackRock S&P 500 Stock Fund), a series of BlackRock Funds III (the “Trust”), is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a diversified, open-end management investment company. The Trust is organized as a Delaware statutory trust. The Fund seeks to achieve its investment objective by investing all of its assets in S&P 500 Index Master Portfolio (the “Master Portfolio”) (formerly known as S&P 500 Stock Master Portfolio), a series of Master Investment Portfolio (“MIP”), an affiliate of the Fund, which has the same investment objective and strategies as the Fund. The value of the Fund’s investment in the Master Portfolio reflects the Fund’s proportionate interest in the net assets of the Master Portfolio. The performance of the Fund is directly affected by the performance of the Master Portfolio. At June 30, 2015, the percentage of the Master Portfolio owned by the Fund was 81.2%. As such, the financial statements of the Master Portfolio, including the Schedule of Investments, are included elsewhere in this report and should be read in conjunction with the Fund’s financial statements.

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 Service, Investor A and Investor C1 Shares bear certain expenses related to shareholder servicing of such shares, and Investor C1 Shares also bears certain expenses related to distribution of such shares. Institutional, Service and Class K Shares are sold only to certain eligible investors. Investor A Shares are generally available through financial intermediaries. Investor C1 Shares are only available through distribution reinvestments by current holders and for purchase by certain employer-sponsored retirement plans. Each class has exclusive voting rights with respect to matters relating to its shareholder servicing and distribution expenditures.

Share Class

Initial Sales Charge

CDSC

Conversion Privilege

Institutional Shares

None

Service Shares

None

Investor A Shares

None

Investor C1 Shares

None

Class K Shares

None

Investor A shares may be subjected to CDSC where no initial sales charge was paid at the time of purchase.

2. Significant Accounting Policies:

The Fund’s 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 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. The following is a summary of significant accounting policies followed by the Fund:

Valuation: The Fund’s investments are valued at fair value as of the close of trading on the New York Stock Exchange (“NYSE”) (generally 4:00 p.m., Eastern time). U.S. GAAP defines fair value as the price the 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 BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to provide oversight of the pricing function for the Fund for all financial instruments. The Fund’s policy is to fair value its financial instruments at market value. The Fund records its investment in the Master Portfolio at fair value based on the Fund’s proportionate interest in the net assets of the Master Portfolio. Valuation of securities held by the Master Portfolio is discussed in Note 2 of the Master Portfolio’s Notes to Financial Statements, which are included elsewhere in this report.



BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015	15


Notes to Financial Statements (continued)

3. Administration Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock, Inc. (“BlackRock”) for 1940 Act purposes.

The Trust entered into an Administration Agreement with BlackRock Advisor, LLC (“BAL”), which has agreed to provide general administration services (other than investment advice and related portfolio activities). BAL, in consideration thereof, has agreed to bear all of the Fund’s ordinary operating expenses, excluding, generally, investment advisory fees, distribution fees, brokerage and other expenses related to the execution of portfolio transactions, extraordinary expenses and certain other expenses which are borne by the Fund. BAL is entitled to receive for these administration services an annual fee based on the average daily net assets attributed to each share class of the Fund as follows:


	Institutional		Service		Investor A		Investor C1		Class K
Rate		0.07%		0.04%		0.07%		0.14%		0.00%

The Trust, on behalf of the Fund, entered into a Distribution Agreement and a Distribution and Service Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of the Administrator. 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:


	Service		Investor A		Investor C1
Service Fee		0.15%		0.25%		0.15%
Distribution Fee		—		—		0.75%

For the six months ended June 30, 2015, affiliates received CDSCs of $510 for Investor C1 Shares.

Certain officers and/or trustees of the Trust are officers and/or directors of BlackRock or its affiliates.

4. 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 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 remains open for each of the four years ended December 31, 2014. The statutes of limitations on the Fund’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.

As of December 31, 2014, the Fund had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:


Expires December 31,
2015	$	18,209,355
2016		79,804,537
2017		21,080,621
2018		29,366,509

Total	$	148,461,022



16	BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015


Notes to Financial Statements (concluded)

5. Capital Share Transactions:

Transactions in capital shares for each class were as follows:


	Six Months Ended June 30, 2015						Year Ended December 31, 2014
	Shares			Amount			Shares			Amount
Institutional
Shares sold		5,850,230		$	1,472,124,308			3,533,974		$	824,534,139
Shares issued to shareholders in reinvestment of distributions		98,220			24,394,850			134,268			31,617,898
Shares redeemed		(1,845,572	)		(463,488,001	)		(3,026,858	)		(706,662,787	)

Net increase		4,102,878		$	1,033,031,157			641,384		$	149,489,250


Service
Shares sold		114,163		$	28,432,857			171,454		$	40,125,114
Shares issued to shareholders in reinvestment of distributions		9,056			2,249,448			19,512			4,591,617
Shares redeemed		(135,917	)		(34,186,353	)		(204,834	)		(47,833,460	)

Net decrease		(12,698	)	$	(3,504,048	)		(13,868	)	$	(3,116,729	)


Investor A
Shares sold		780,146		$	195,691,040			1,367,982		$	318,342,711
Shares issued to shareholders in reinvestment of distributions		34,547			8,580,046			71,007			16,706,046
Shares redeemed		(572,729	)		(143,422,272	)		(1,505,189	)		(350,176,620	)

Net increase (decrease)		241,964		$	60,848,814			(66,200	)	$	(15,127,863	)


Investor C1
Shares sold		101		$	25,159			44		$	10,057
Shares issued to shareholders in reinvestment of distributions		1,078			267,774			2,574			605,881
Shares redeemed		(11,926	)		(3,005,119	)		(28,378	)		(6,561,824	)

Net decrease		(10,747	)	$	(2,712,186	)		(25,760	)	$	(5,945,886	)


Class K
Shares sold		592,964		$	148,475,723			931,025		$	217,851,261
Shares issued to shareholders in reinvestment of distributions		27,433			6,814,724			54,585			12,850,253
Shares redeemed		(395,730	)		(99,301,850	)		(975,948	)		(228,925,401	)

Net increase		224,667		$	55,988,597			9,662		$	1,776,113

Total Net Increase		4,546,064		$	1,143,652,334			545,218		$	127,074,885

6. Subsequent Events:



BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015	17


Master Portfolio Information		S&P 500 Index Master Portfolio

As of June 30, 2015

Ten Largest Holdings

Percent of

Long-Term Investments


Apple, Inc.	4	%
Microsoft Corp.	2
Exxon Mobil Corp.	2
Johnson & Johnson	1
General Electric Co.	1
Wells Fargo & Co.	1
JPMorgan Chase & Co.	1
Berkshire Hathaway, Inc. — Class B	1
The Procter & Gamble Co.	1
Pfizer, Inc.	1

Sector Allocation

Percent of

Long-Term Investments


Information Technology	20	%
Financials	17
Health Care	15
Consumer Discretionary	13
Industrials	10
Consumer Staples	9
Energy	8
Materials	3
Utilities	3
Telecommunication Services	2

For Master Portfolio compliance purposes, the Master Portfolio’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 advisor. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.



18	BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015

Schedule of Investments June 30, 2015 (Unaudited)

S&P 500 Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Aerospace & Defense — 2.5%
The Boeing Co.		231,310	$	32,087,323
General Dynamics Corp.		112,325		15,915,329
Honeywell International, Inc.		281,159		28,669,783
L-3 Communications Holdings, Inc.		29,623		3,358,656
Lockheed Martin Corp.		96,230		17,889,157
Northrop Grumman Corp.		69,718		11,059,366
Precision Castparts Corp.		49,843		9,962,121
Raytheon Co.		109,752		10,501,071
Rockwell Collins, Inc.		47,574		4,393,459
Textron, Inc.		99,861		4,456,797
United Technologies Corp.		297,769		33,031,515

				171,324,577
Air Freight & Logistics — 0.7%
C.H. Robinson Worldwide, Inc.		52,454		3,272,605
Expeditors International of Washington, Inc.		68,797		3,171,886
FedEx Corp.		94,816		16,156,646
United Parcel Service, Inc., Class B		249,599		24,188,639

				46,789,776
Airlines — 0.4%
American Airlines Group, Inc.		250,542		10,005,395
Delta Air Lines, Inc.		295,404		12,135,196
Southwest Airlines Co.		240,369		7,953,810

				30,094,401
Auto Components — 0.4%
BorgWarner, Inc.		81,382		4,625,753
Delphi Automotive PLC		103,852		8,836,767
The Goodyear Tire & Rubber Co.		97,027		2,925,364
Johnson Controls, Inc.		235,525		11,665,553

				28,053,437
Automobiles — 0.6%
Ford Motor Co.		1,429,828		21,461,718
General Motors Co.		485,578		16,184,315
Harley-Davidson, Inc.		75,192		4,237,069

				41,883,102
Banks — 6.0%
Bank of America Corp.		3,777,320		64,289,986
BB&T Corp.		262,903		10,597,620
Citigroup, Inc.		1,091,298		60,283,302
Comerica, Inc.		64,025		3,285,763
Fifth Third Bancorp		291,312		6,065,116
Huntington Bancshares, Inc.		290,806		3,289,016
JPMorgan Chase & Co.		1,334,777		90,444,490
KeyCorp		305,113		4,582,797
M&T Bank Corp.		47,826		5,974,902
The PNC Financial Services Group, Inc. (a)		186,281		17,817,778
Regions Financial Corp.		482,090		4,994,452
SunTrust Banks, Inc.		185,670		7,987,523
US Bancorp		637,713		27,676,744
Wells Fargo & Co.		1,685,347		94,783,915
Zions Bancorporation		73,089		2,319,480

				404,392,884
Beverages — 2.0%
Brown-Forman Corp., Class B		56,047		5,614,788
The Coca-Cola Co.		1,410,936		55,351,019
Coca-Cola Enterprises, Inc.		77,352		3,360,171
Constellation Brands, Inc., Class A		60,939		7,070,143
Beverages (concluded)
Dr Pepper Snapple Group, Inc.		68,961	$	5,027,257
Molson Coors Brewing Co., Class B		57,422		4,008,630
Monster Beverage Corp. (b)		52,880		7,086,977
PepsiCo, Inc.		530,896		49,553,833

				137,072,818
Biotechnology — 3.1%
Alexion Pharmaceuticals, Inc. (b)		80,531		14,557,589
Amgen, Inc.		273,468		41,982,807
Biogen, Inc. (b)(c)		84,606		34,175,748
Celgene Corp. (b)		285,273		33,016,071
Gilead Sciences, Inc.		528,578		61,885,912
Regeneron Pharmaceuticals, Inc. (b)		27,117		13,833,195
Vertex Pharmaceuticals, Inc. (b)		87,671		10,825,615

				210,276,937
Building Products — 0.1%
Allegion PLC		34,669		2,084,994
Masco Corp.		125,021		3,334,310

				5,419,304
Capital Markets — 2.3%
Affiliated Managers Group, Inc. (b)		19,683		4,302,704
Ameriprise Financial, Inc.		65,238		8,150,183
The Bank of New York Mellon Corp.		403,378		16,929,775
BlackRock, Inc. (a)		45,672		15,801,599
The Charles Schwab Corp.		415,745		13,574,074
E*Trade Financial Corp. (b)		104,265		3,122,737
Franklin Resources, Inc.		140,285		6,878,174
The Goldman Sachs Group, Inc.		144,508		30,171,825
Invesco Ltd.		154,914		5,807,726
Legg Mason, Inc.		34,629		1,784,432
Morgan Stanley		552,681		21,438,496
Northern Trust Corp.		78,901		6,032,770
State Street Corp.		148,071		11,401,467
T. Rowe Price Group, Inc.		94,502		7,345,640

				152,741,602
Chemicals — 2.3%
Air Products & Chemicals, Inc.		69,521		9,512,558
Airgas, Inc.		24,445		2,585,792
CF Industries Holdings, Inc.		84,764		5,448,630
The Dow Chemical Co.		389,781		19,945,094
E.I. du Pont de Nemours & Co.		325,590		20,821,481
Eastman Chemical Co.		53,583		4,384,161
Ecolab, Inc.		96,387		10,898,478
FMC Corp.		48,029		2,523,924
International Flavors & Fragrances, Inc.		29,093		3,179,574
LyondellBasell Industries NV, Class A		141,294		14,626,755
Monsanto Co.		171,242		18,252,685
The Mosaic Co.		111,627		5,229,725
PPG Industries, Inc.		97,778		11,217,092
Praxair, Inc.		103,698		12,397,096
The Sherwin-Williams Co.		28,489		7,835,045
Sigma-Aldrich Corp.		42,955		5,985,779

				154,843,869
Commercial Services & Supplies — 0.4%
The ADT Corp. (c)		62,000		2,081,340
Cintas Corp.		34,045		2,879,867
Iron Mountain, Inc.		67,453		2,091,043
Pitney Bowes, Inc.		73,611		1,531,845

See Notes to Financial Statements.



BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015	19

Schedule of Investments (continued)

S&P 500 Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Commercial Services & Supplies (concluded)
Republic Services, Inc.		89,723	$	3,514,450
Stericycle, Inc. (b)		30,590		4,096,307
Tyco International PLC		151,434		5,827,180
Waste Management, Inc.		153,140		7,098,039

				29,120,071
Communications Equipment — 1.5%
Cisco Systems, Inc.		1,829,256		50,231,370
F5 Networks, Inc. (b)		25,872		3,113,695
Harris Corp.		44,324		3,408,959
Juniper Networks, Inc.		126,623		3,288,399
Motorola Solutions, Inc.		66,634		3,820,794
QUALCOMM, Inc.		586,112		36,708,194

				100,571,411
Construction & Engineering — 0.1%
Fluor Corp.		53,026		2,810,908
Jacobs Engineering Group, Inc. (b)		45,022		1,828,794
Quanta Services, Inc. (b)		76,190		2,195,796

				6,835,498
Construction Materials — 0.1%
Martin Marietta Materials, Inc.		22,330		3,159,918
Vulcan Materials Co.		47,715		4,004,720

				7,164,638
Consumer Finance — 0.8%
American Express Co.		314,205		24,420,013
Capital One Financial Corp.		196,534		17,289,096
Discover Financial Services		159,157		9,170,626
Navient Corp.		140,345		2,555,682

				53,435,417
Containers & Packaging — 0.2%
Avery Dennison Corp.		32,739		1,995,115
Ball Corp.		49,584		3,478,318
MeadWestvaco Corp.		120,177		5,671,153
Owens-Illinois, Inc. (b)(c)		57,477		1,318,522
Sealed Air Corp.		75,591		3,883,865

				16,346,973
Distributors — 0.1%
Genuine Parts Co.		54,743		4,901,141
Diversified Consumer Services — 0.0%
H&R Block, Inc.		99,000		2,935,350
Diversified Financial Services — 1.9%
Berkshire Hathaway, Inc., Class B (b)		655,959		89,282,579
CME Group, Inc.		114,126		10,620,566
IntercontinentalExchange Group, Inc.		40,195		8,988,004
Leucadia National Corp.		113,415		2,753,716
McGraw-Hill Financial, Inc.		98,443		9,888,599
Moody’s Corp.		63,989		6,908,252
The NASDAQ OMX Group, Inc.		42,638		2,081,161

				130,522,877
Diversified Telecommunication Services — 2.2%
AT&T, Inc.		1,867,781		66,343,581
CenturyLink, Inc.		202,766		5,957,265
Frontier Communications Corp.		414,814		2,053,329
Level 3 Communications, Inc. (b)		105,817		5,573,382
Verizon Communications, Inc.		1,466,921		68,373,188

				148,300,745
Electric Utilities — 1.5%
American Electric Power Co., Inc.		176,219	$	9,334,321
Duke Energy Corp.		248,728		17,565,171
Edison International		117,186		6,513,198
Entergy Corp.		64,570		4,552,185
Eversource Energy		114,250		5,188,093
Exelon Corp.		309,766		9,732,848
FirstEnergy Corp.		151,792		4,940,830
NextEra Energy, Inc.		159,740		15,659,312
Pepco Holdings, Inc.		90,931		2,449,681
Pinnacle West Capital Corp.		39,834		2,266,156
PPL Corp.		240,300		7,081,641
The Southern Co.		326,677		13,687,766
Xcel Energy, Inc.		182,324		5,867,186

				104,838,388
Electrical Equipment — 0.5%
AMETEK, Inc.		86,869		4,758,684
Eaton Corp. PLC		168,004		11,338,590
Emerson Electric Co.		240,488		13,330,250
Rockwell Automation, Inc.		48,412		6,034,071

				35,461,595
Electronic Equipment, Instruments & Components — 0.4%
Amphenol Corp., Class A		111,111		6,441,105
Corning, Inc.		452,668		8,931,139
FLIR Systems, Inc.		51,061		1,573,700
TE Connectivity Ltd.		146,240		9,403,232

				26,349,176
Energy Equipment & Services — 1.3%
Baker Hughes, Inc.		156,342		9,646,301
Cameron International Corp. (b)		69,316		3,630,079
Diamond Offshore Drilling, Inc. (c)		23,577		608,522
Ensco PLC, Class A		84,813		1,888,785
FMC Technologies, Inc. (b)		83,053		3,445,869
Halliburton Co.		306,037		13,181,014
Helmerich & Payne, Inc.		38,721		2,726,733
National Oilwell Varco, Inc.		139,506		6,735,350
Noble Corp. PLC		86,909		1,337,529
Schlumberger Ltd.		456,687		39,361,853
Transocean Ltd. (c)		122,948		1,981,922

				84,543,957
Food & Staples Retailing — 2.3%
Costco Wholesale Corp.		158,072		21,349,204
CVS Health Corp.		405,830		42,563,451
The Kroger Co.		176,313		12,784,456
Sysco Corp.		213,561		7,709,552
Wal-Mart Stores, Inc.		567,589		40,259,088
Walgreens Boots Alliance, Inc.		313,853		26,501,747
Whole Foods Market, Inc.		128,864		5,082,396

				156,249,894
Food Products — 1.6%
Archer-Daniels-Midland Co.		223,132		10,759,425
Campbell Soup Co.		63,922		3,045,883
ConAgra Foods, Inc.		153,599		6,715,348
General Mills, Inc.		214,398		11,946,257
The Hershey Co.		52,786		4,688,980
Hormel Foods Corp.		48,477		2,732,649
The J.M. Smucker Co.		34,860		3,779,173
Kellogg Co.		90,119		5,650,461

See Notes to Financial Statements.



20	BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

S&P 500 Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Food Products (concluded)
Keurig Green Mountain, Inc.		41,534	$	3,182,750
Kraft Foods Group, Inc.		213,027		18,137,119
McCormick & Co., Inc.		45,961		3,720,543
Mead Johnson Nutrition Co.		72,847		6,572,256
Mondelez International, Inc., Class A		585,052		24,069,039
Tyson Foods, Inc., Class A		104,928		4,473,081

				109,472,964
Gas Utilities — 0.0%
AGL Resources, Inc.		43,231		2,012,835
Health Care Equipment & Supplies — 2.1%
Abbott Laboratories		535,466		26,280,671
Baxter International, Inc.		195,754		13,689,077
Becton Dickinson & Co.		75,311		10,667,803
Boston Scientific Corp. (b)		482,205		8,535,028
C.R. Bard, Inc.		26,705		4,558,544
DENTSPLY International, Inc.		50,340		2,595,027
Edwards Lifesciences Corp. (b)		38,686		5,510,047
Intuitive Surgical, Inc. (b)		13,257		6,423,017
Medtronic PLC		512,558		37,980,548
St. Jude Medical, Inc.		100,753		7,362,022
Stryker Corp.		107,522		10,275,878
Varian Medical Systems, Inc. (b)(c)		35,895		3,027,025
Zimmer Biomet Holdings, Inc.		61,289		6,694,597

				143,599,284
Health Care Providers & Services — 2.9%
Aetna, Inc.		125,598		16,008,721
AmerisourceBergen Corp.		75,065		7,982,412
Anthem, Inc.		95,147		15,617,429
Cardinal Health, Inc.		118,992		9,953,681
Cigna Corp.		92,568		14,996,016
DaVita HealthCare Partners, Inc. (b)		61,847		4,914,981
Express Scripts Holding Co. (b)		262,307		23,329,584
HCA Holdings, Inc. (b)(c)		104,314		9,463,366
Henry Schein, Inc. (b)		30,076		4,274,401
Humana, Inc.		53,872		10,304,636
Laboratory Corp. of America Holdings (b)		36,112		4,377,497
McKesson Corp.		83,284		18,723,076
Patterson Cos., Inc.		31,346		1,524,983
Quest Diagnostics, Inc.		51,662		3,746,528
Tenet Healthcare Corp. (b)		35,744		2,068,863
UnitedHealth Group, Inc.		342,374		41,769,628
Universal Health Services, Inc., Class B		32,787		4,659,033

				193,714,835
Health Care Technology — 0.1%
Cerner Corp. (b)		110,143		7,606,476
Hotels, Restaurants & Leisure — 1.7%
Carnival Corp.		162,215		8,011,799
Chipotle Mexican Grill, Inc. (b)		11,167		6,755,923
Darden Restaurants, Inc.		45,244		3,215,943
Marriott International, Inc., Class A		74,170		5,517,506
McDonald’s Corp.		344,752		32,775,573
Royal Caribbean Cruises Ltd.		59,322		4,668,048
Starbucks Corp.		539,689		28,935,426
Starwood Hotels & Resorts Worldwide, Inc.		61,464		4,984,116
Wyndham Worldwide Corp.		43,177		3,536,628
Wynn Resorts Ltd.		29,325		2,893,498
Yum! Brands, Inc.		155,523		14,009,512

				115,303,972
Household Durables — 0.4%
D.R. Horton, Inc.		119,998	$	3,283,145
Garmin Ltd.		43,738		1,921,410
Harman International Industries, Inc.		25,592		3,043,913
Leggett & Platt, Inc.		49,755		2,422,073
Lennar Corp., Class A		64,212		3,277,381
Mohawk Industries, Inc. (b)		22,346		4,265,851
Newell Rubbermaid, Inc.		96,645		3,973,076
PulteGroup, Inc.		119,290		2,403,694
Whirlpool Corp.		28,287		4,895,065

				29,485,608
Household Products — 1.7%
The Clorox Co.		47,182		4,907,872
Colgate-Palmolive Co.		305,829		20,004,275
Kimberly-Clark Corp.		130,957		13,877,513
The Procter & Gamble Co.		975,791		76,345,888

				115,135,548
Independent Power and Renewable Electricity Producers — 0.1%
The AES Corp.		245,456		3,254,747
NRG Energy, Inc.		120,782		2,763,492

				6,018,239
Industrial Conglomerates — 2.3%
3M Co.		228,156		35,204,471
Danaher Corp.		221,491		18,957,415
General Electric Co.		3,624,038		96,290,689
Roper Industries, Inc.		36,155		6,235,291

				156,687,866
Insurance — 2.7%
ACE Ltd.		117,467		11,944,044
Aflac, Inc.		156,057		9,706,745
The Allstate Corp.		147,111		9,543,090
American International Group, Inc.		479,346		29,633,170
Aon PLC		101,333		10,100,873
Assurant, Inc.		24,234		1,623,678
The Chubb Corp.		82,636		7,861,989
Cincinnati Financial Corp.		53,204		2,669,777
Genworth Financial, Inc., Class A (b)		182,289		1,379,928
Hartford Financial Services Group, Inc.		151,038		6,278,650
Lincoln National Corp.		91,006		5,389,375
Loews Corp.		106,860		4,115,179
Marsh & McLennan Cos., Inc.		193,651		10,980,012
MetLife, Inc.		401,330		22,470,467
Principal Financial Group, Inc.		98,570		5,055,655
The Progressive Corp.		192,029		5,344,167
Prudential Financial, Inc.		162,932		14,259,809
Torchmark Corp.		45,499		2,648,952
The Travelers Cos., Inc.		114,627		11,079,846
Unum Group		89,743		3,208,312
XL Group PLC		110,289		4,102,751

				179,396,469
Internet & Catalog Retail — 1.5%
Amazon.com, Inc. (b)		137,345		59,620,091
Expedia, Inc.		35,862		3,921,510
Netflix, Inc. (b)		21,805		14,324,577
The Priceline Group, Inc. (b)		18,645		21,467,294
TripAdvisor, Inc. (b)		40,261		3,508,343

				102,841,815

See Notes to Financial Statements.



BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015	21

Schedule of Investments (continued)

S&P 500 Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Internet Software & Services — 3.3%
Akamai Technologies, Inc. (b)		64,223	$	4,484,050
eBay, Inc. (b)		397,614		23,952,267
Equinix, Inc. (c)		20,474		5,200,396
Facebook, Inc., Class A (b)		757,535		64,969,989
Google, Inc., Class A (b)		102,940		55,591,718
Google, Inc., Class C (b)		103,234		53,734,329
VeriSign, Inc. (b)(c)		37,835		2,335,176
Yahoo!, Inc. (b)		313,906		12,333,367

				222,601,292
IT Services — 3.3%
Accenture PLC, Class A		225,247		21,799,405
Alliance Data Systems Corp. (b)		22,318		6,515,517
Automatic Data Processing, Inc.		168,875		13,548,841
Cognizant Technology Solutions Corp., Class A (b)		219,587		13,414,570
Computer Sciences Corp.		49,302		3,236,183
Fidelity National Information Services, Inc.		101,955		6,300,819
Fiserv, Inc. (b)		85,167		7,054,383
International Business Machines Corp.		329,390		53,578,577
Mastercard, Inc., Class A		348,596		32,586,754
Paychex, Inc.		117,579		5,512,103
Teradata Corp. (b)(c)		50,758		1,878,046
Total System Services, Inc.		59,192		2,472,450
Visa, Inc., Class A		695,267		46,687,179
The Western Union Co.		185,703		3,775,342
Xerox Corp.		373,236		3,971,231

				222,331,400
Leisure Products — 0.1%
Hasbro, Inc.		40,295		3,013,663
Mattel, Inc.		121,692		3,126,268

				6,139,931
Life Sciences Tools & Services — 0.4%
Agilent Technologies, Inc.		119,841		4,623,466
PerkinElmer, Inc.		40,789		2,147,133
Thermo Fisher Scientific, Inc.		143,171		18,577,869
Waters Corp. (b)		29,743		3,818,406

				29,166,874
Machinery — 1.5%
Caterpillar, Inc.		217,115		18,415,694
Cummins, Inc.		60,310		7,912,069
Deere & Co.		120,085		11,654,249
Dover Corp.		57,919		4,064,755
Flowserve Corp.		48,445		2,551,114
Illinois Tool Works, Inc.		121,942		11,193,056
Ingersoll-Rand PLC		95,213		6,419,261
Joy Global, Inc.		34,113		1,234,891
PACCAR, Inc.		127,611		8,142,858
Pall Corp.		38,424		4,781,867
Parker Hannifin Corp.		49,774		5,790,209
Pentair PLC		64,849		4,458,369
Snap-on, Inc.		20,977		3,340,587
Stanley Black & Decker, Inc.		55,001		5,788,305
Xylem, Inc.		65,584		2,431,199

				98,178,483
Media — 3.6%
Cablevision Systems Corp., New York Group, Class A		79,517		1,903,637
CBS Corp., Class B		162,850		9,038,175
Media (concluded)
Comcast Corp., Class A		904,053	$	54,369,747
DIRECTV (b)		180,844		16,780,515
Discovery Communications, Inc., Class A (b)(c)		51,909		1,726,493
Discovery Communications, Inc., Class C (b)		94,536		2,938,179
The Interpublic Group of Cos., Inc.		148,523		2,862,038
News Corp., Class A (b)		180,100		2,627,659
Omnicom Group, Inc.		87,873		6,106,295
Scripps Networks Interactive, Inc., Class A		34,067		2,226,960
TEGNA, Inc.		81,594		2,616,720
Time Warner Cable, Inc.		101,675		18,115,435
Time Warner, Inc.		296,587		25,924,670
Twenty-First Century Fox, Inc., Class A		636,411		20,711,996
Viacom, Inc., Class B		128,574		8,311,023
The Walt Disney Co.		561,457		64,084,702

				240,344,244
Metals & Mining — 0.3%
Alcoa, Inc.		439,658		4,902,187
Allegheny Technologies, Inc.		40,097		1,210,930
Freeport-McMoRan Copper & Gold, Inc.		374,076		6,965,295
Newmont Mining Corp.		190,212		4,443,352
Nucor Corp.		114,785		5,058,575

				22,580,339
Multi-Utilities — 1.1%
Ameren Corp.		87,270		3,288,334
CenterPoint Energy, Inc.		154,734		2,944,588
CMS Energy Corp.		99,268		3,160,693
Consolidated Edison, Inc.		105,340		6,097,079
Dominion Resources, Inc.		213,457		14,273,870
DTE Energy Co.		64,501		4,814,355
NiSource, Inc.		114,153		5,204,235
PG&E Corp.		172,692		8,479,177
Public Service Enterprise Group, Inc.		181,946		7,146,839
SCANA Corp.		51,404		2,603,613
Sempra Energy		83,708		8,282,069
TECO Energy, Inc.		86,116		1,520,809
WEC Energy Group, Inc.		113,546		5,106,170

				72,921,831
Multiline Retail — 0.8%
Dollar General Corp.		106,863		8,307,530
Dollar Tree, Inc. (b)		74,162		5,858,056
Family Dollar Stores, Inc.		34,578		2,725,092
Kohl’s Corp.		70,586		4,419,389
Macy’s, Inc.		120,998		8,163,735
Nordstrom, Inc.		50,713		3,778,119
Target Corp.		229,649		18,746,248

				51,998,169
Oil, Gas & Consumable Fuels — 6.3%
Anadarko Petroleum Corp.		182,691		14,260,860
Apache Corp.		135,631		7,816,415
Cabot Oil & Gas Corp.		148,763		4,691,985
Chesapeake Energy Corp. (c)		186,426		2,082,378
Chevron Corp.		676,357		65,248,160
Cimarex Energy Co.		33,691		3,716,454
ConocoPhillips		443,458		27,232,756
CONSOL Energy, Inc.		83,199		1,808,746
Devon Energy Corp.		138,990		8,268,515
EOG Resources, Inc.		197,437		17,285,609

See Notes to Financial Statements.



22	BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015

Schedule of Investments (continued)

S&P 500 Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Oil, Gas & Consumable Fuels (concluded)
EQT Corp.		54,795	$	4,457,025
Exxon Mobil Corp.		1,503,831		125,118,739
Hess Corp.		87,859		5,876,010
Kinder Morgan, Inc.		623,862		23,950,062
Marathon Oil Corp.		242,763		6,442,930
Marathon Petroleum Corp.		195,401		10,221,426
Murphy Oil Corp.		60,170		2,501,267
Newfield Exploration Co. (b)		58,556		2,115,043
Noble Energy, Inc.		139,196		5,940,885
Occidental Petroleum Corp.		276,272		21,485,674
ONEOK, Inc.		75,086		2,964,395
Phillips 66		195,061		15,714,114
Pioneer Natural Resources Co.		53,699		7,447,514
Range Resources Corp.		59,891		2,957,418
Southwestern Energy Co. (b)(c)		139,190		3,163,789
Spectra Energy Corp.		241,459		7,871,563
Tesoro Corp.		45,294		3,823,267
Valero Energy Corp.		182,938		11,451,919
The Williams Cos., Inc.		242,460		13,914,779

				429,829,697
Paper & Forest Products — 0.1%
International Paper Co.		152,094		7,238,153
Personal Products — 0.1%
The Estee Lauder Cos., Inc., Class A		80,299		6,958,711
Pharmaceuticals — 6.3%
AbbVie, Inc.		618,480		41,555,671
Allergan PLC (b)		141,152		42,833,986
Bristol-Myers Squibb Co.		599,566		39,895,122
Eli Lilly & Co.		351,247		29,325,612
Endo International PLC (b)		72,931		5,808,954
Hospira, Inc. (b)		62,144		5,512,794
Johnson & Johnson		997,389		97,205,532
Mallinckrodt PLC (b)		42,073		4,952,834
Merck & Co., Inc.		1,016,156		57,849,761
Mylan NV (b)		148,052		10,046,809
Perrigo Co. PLC		52,607		9,723,352
Pfizer, Inc.		2,214,747		74,260,467
Zoetis, Inc.		179,824		8,671,113

				427,642,007
Professional Services — 0.2%
The Dun & Bradstreet Corp.		13,110		1,599,420
Equifax, Inc.		42,804		4,155,840
Nielsen NV.		132,757		5,943,531
Robert Half International, Inc.		48,584		2,696,412

				14,395,203
Real Estate Investment Trusts (REITs) — 2.2%
American Tower Corp.		152,174		14,196,312
Apartment Investment & Management Co., Class A		56,410		2,083,221
AvalonBay Communities, Inc.		47,545		7,601,019
Boston Properties, Inc.		55,177		6,678,624
Crown Castle International Corp.		121,384		9,747,135
Equity Residential		130,917		9,186,446
Essex Property Trust, Inc.		23,506		4,995,025
General Growth Properties, Inc.		226,312		5,807,166
HCP, Inc.		166,053		6,055,953
Health Care REIT, Inc.		126,257		8,286,247
Host Hotels & Resorts, Inc.		272,516		5,403,992
Real Estate Investment Trusts (REITs) (concluded)
Kimco Realty Corp.		148,457	$	3,346,221
The Macerich Co.		50,662		3,779,385
Plum Creek Timber Co., Inc.		63,168		2,562,726
Prologis, Inc.		188,486		6,992,831
Public Storage		52,237		9,630,936
Realty Income Corp. (c)		83,638		3,712,691
Simon Property Group, Inc.		111,955		19,370,454
SL Green Realty Corp.		35,818		3,936,040
Ventas, Inc. (c)		111,891		6,947,312
Vornado Realty Trust		62,977		5,978,407
Weyerhaeuser Co.		186,219		5,865,898

				152,164,041
Real Estate Management & Development — 0.1%
CBRE Group, Inc., Class A (b)		100,602		3,722,274
Road & Rail — 0.9%
CSX Corp.		355,350		11,602,177
JB Hunt Transport Services, Inc.		33,102		2,717,343
Kansas City Southern		39,761		3,626,203
Norfolk Southern Corp.		109,646		9,578,675
Ryder System, Inc.		19,261		1,682,834
Union Pacific Corp.		314,927		30,034,588

				59,241,820
Semiconductors & Semiconductor Equipment — 2.3%
Altera Corp.		108,294		5,544,653
Analog Devices, Inc.		112,773		7,238,335
Applied Materials, Inc.		442,973		8,513,941
Avago Technologies Ltd. (c)		92,288		12,267,844
Broadcom Corp., Class A		195,604		10,071,650
First Solar, Inc. (b)		27,607		1,296,977
Intel Corp.		1,706,288		51,896,750
KLA-Tencor Corp.		58,026		3,261,641
Lam Research Corp.		56,946		4,632,557
Linear Technology Corp.		86,130		3,809,530
Microchip Technology, Inc.		72,771		3,451,165
Micron Technology, Inc. (b)		387,481		7,300,142
NVIDIA Corp.		183,829		3,696,801
Qorvo, Inc. (b)		53,748		4,314,352
Skyworks Solutions, Inc.		68,733		7,155,105
Texas Instruments, Inc.		374,191		19,274,578
Xilinx, Inc.		93,010		4,107,322

				157,833,343
Software — 3.6%
Adobe Systems, Inc. (b)		170,937		13,847,606
Autodesk, Inc. (b)		81,881		4,100,191
CA, Inc.		113,861		3,334,989
Citrix Systems, Inc. (b)		57,652		4,044,864
Electronic Arts, Inc. (b)		111,836		7,437,094
Intuit, Inc.		99,151		9,991,446
Microsoft Corp.		2,909,600		128,458,840
Oracle Corp.		1,146,623		46,208,907
Red Hat, Inc. (b)		65,935		5,006,445
Salesforce.com, Inc. (b)		219,281		15,268,536
Symantec Corp.		244,840		5,692,530

				243,391,448
Specialty Retail — 2.3%
AutoNation, Inc. (b)		27,276		1,717,842
AutoZone, Inc. (b)(c)		11,410		7,609,329

See Notes to Financial Statements.



BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015	23

Schedule of Investments (continued)

S&P 500 Index Master Portfolio

(Percentages shown are based on Net Assets)


Common Stocks	Shares			Value
Specialty Retail (concluded)
Bed Bath & Beyond, Inc. (b)		61,616		$	4,250,272
Best Buy Co., Inc.		105,313			3,434,257
CarMax, Inc. (b)(c)		75,254			4,982,567
GameStop Corp., Class A (c)		37,969			1,631,148
The Gap, Inc.		94,571			3,609,775
The Home Depot, Inc.		467,207			51,920,714
L Brands, Inc.		88,210			7,562,243
Lowe’s Cos., Inc.		335,462			22,465,890
O’Reilly Automotive, Inc. (b)		36,324			8,208,498
Ross Stores, Inc.		148,830			7,234,626
Staples, Inc.		230,426			3,527,822
Tiffany & Co.		40,416			3,710,189
TJX Cos., Inc.		244,716			16,192,858
Tractor Supply Co.		49,070			4,413,356
Urban Outfitters, Inc. (b)		35,003			1,225,105

					153,696,491
Technology Hardware, Storage & Peripherals — 4.7%
Apple, Inc.		2,072,086			259,891,387
EMC Corp.		698,507			18,433,600
Hewlett-Packard Co.		649,719			19,498,067
NetApp, Inc.		112,143			3,539,233
SanDisk Corp.		74,425			4,333,024
Seagate Technology PLC		114,717			5,449,057
Western Digital Corp.		78,070			6,122,249

					317,266,617
Textiles, Apparel & Luxury Goods — 0.9%
Coach, Inc.		99,373			3,439,300
Fossil Group, Inc. (b)(c)		15,506			1,075,496
Hanesbrands, Inc.		144,469			4,813,707
Michael Kors Holdings Ltd. (b)		71,592			3,013,307
NIKE, Inc., Class B		250,475			27,056,309
PVH Corp.		29,743			3,426,394
Ralph Lauren Corp.		21,736			2,876,977
Under Armour, Inc., Class A (b)		60,468			5,045,450
VF Corp.		122,282			8,527,947

					59,274,887
Thrifts & Mortgage Finance — 0.1%
Hudson City Bancorp, Inc.		175,105			1,730,038
People’s United Financial, Inc.		112,010			1,815,682

					3,545,720
Tobacco — 1.3%
Altria Group, Inc.		707,318		$	34,594,923
Philip Morris International, Inc.		557,186			44,669,602
Reynolds American, Inc.		149,506			11,162,118

					90,426,643
Trading Companies & Distributors — 0.2%
Fastenal Co.		97,779			4,124,318
United Rentals, Inc. (b)(c)		34,878			3,056,011
W.W. Grainger, Inc.		21,422			5,069,516

					12,249,845
Total Long-Term Investments (Cost — $3,928,129,254) — 96.8%					6,556,885,212



Short-Term Securities
Money Market Fund — 3.3%
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (a)(d)		176,986,191			176,986,191
BlackRock Cash Funds: Prime, SL Agency Shares, 0.13% (a)(d)(e)		47,201,629			47,201,629
Total Short-Term Securities (Cost — $224,187,820) — 3.3%					224,187,820
Total Investments Before Investments Sold Short (Cost — $4,152,317,074) — 100.1%					6,781,073,032



Investments Sold Short (f)
Common Stocks
Chemicals — 0.0%
The Chemours Co. (b)		(65,118	)		(1,041,888	)
Household Durables — 0.0%
TopBuild Corp. (b)		(12,502	)		(362,558	)
Total Investments Sold Short (Proceeds — $1,404,110) — 0.0%					(1,404,446	)
Total Investments, Net of Investment Sold Short (Cost — $4,150,912,964) — 100.1%					6,779,668,586
Liabilities in Excess of Other Assets — (0.1)%					(8,490,162	)

Net Assets — 100.0%				$	6,771,178,424

Notes to Schedule of Investments

(a)


Affiliate	Shares Held at December 31, 2014		Shares Purchased			Shares Sold			Shares Held at June 30, 2015		Value at June 30, 2015		Income			Realized Gain
BlackRock, Inc.		39,755		6,071			(154	)		45,672	$	15,801,599	$	192,267		$	9,903
BlackRock Cash Funds: Institutional, SL Agency Shares		76,063,771		100,922,420	¹		—			176,986,191	$	176,986,191	$	186,462			—
BlackRock Cash Funds: Prime, SL Agency Shares		6,710,893		40,490,736	¹		—			47,201,629	$	47,201,629	$	173,537	²		—
The PNC Financial Services Group, Inc.		164,243		23,833			(1,795	)		186,281	$	17,817,778	$	171,575		$	54,146
¹ Represents net shares purchased. ² Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.

(b)

Non-income producing security.

See Notes to Financial Statements.



24	BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015


Schedule of Investments (concluded)		S&P 500 Index Master Portfolio

(c)

Security, or a portion of security, is on loan.

(d)

Represents the current yield as of report date.

(e)

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

(f)

In order to track the performance of its benchmark index, the Master Portfolio sold non-index securities that it subsequently received in corporate action occurring on the opening of market trading on the following business day.

•

As of June 30, 2015, financial futures contracts outstanding were as follows:


Contracts Long		Issue	Exchange	Expiration	Notional Value		Unrealized Depreciation
	1,818	S&P 500 E-Mini Index	Chicago Mercantile	September 2015	$	186,744,960	$	(3,507,526	)

•

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

•

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investments and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that the Master Portfolio has the ability to access

•

As of June 30, 2015, the following tables summarize the Master Portfolio’s investments and derivative financial instruments categorized in the disclosure hierarchy:


	Level 1			Level 2		Level 3		Total
Assets:
Investments:
Long-Term Investments:
Common Stocks¹	$	6,556,885,212			—		—	$	6,556,885,212
Short-Term Securities:
Money Market Funds		224,187,820			—		—		224,187,820
Liabilities:
Investments Sold Short		(1,404,446	)		—		—		(1,404,446	)

Total	$	6,779,668,586			—		—	$	6,779,668,586

¹ See above Schedule of Investments for values in each industry.
	Level 1			Level 2		Level 3		Total
Derivative Financial Instruments²
Liabilities:
Equity contracts	$	(3,507,526	)		—		—	$	(3,507,526	)
² Derivative financial instruments are financial futures contracts, which are valued at the unrealized appreciation (depreciation) on the instrument.


	Level 1		Level 2			Level 3		Total
Assets:
Cash pledged for financial futures contracts	$	7,962,600		—			—	$	7,962,600
Liabilities:
Collateral on securities loaned at value		—	$	(47,201,629	)		—		(47,201,629	)

Total	$	7,962,600	$	(47,201,629	)		—	$	(39,239,029	)

During the six months ended June 20, 2015, there were no transfers between levels.

See Notes to Financial Statements.



BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015	25


Statement of Assets and Liabilities		S&P 500 Index Master Portfolio


June 30, 2015 (Unaudited)

Assets
Investments at value — unaffiliated (including securities loaned of $46,306,043) (cost — $3,907,632,181)	$	6,523,265,835
Investments at value — affiliated (cost — $244,684,893)		257,807,197
Cash pledged for financial futures contracts		7,962,600
Receivables:
Contributions from investors		25,691,440
Dividends		7,455,085
Investments sold		3,070,050
Securities lending income — affiliated		21,429
Variation margin receivable on financial futures contracts		335,924

Total assets		6,825,609,560


Liabilities
Collateral on securities loaned at value		47,201,629
Investments sold short at value (proceeds — $1,404,110)		1,404,446
Payables:
Investments purchased		5,574,125
Investment advisory fees		190,515
Professional fees		25,673
Officer’s and Trustees’ fees		23,593
Withdrawals to investors		11,155

Total liabilities		54,431,136

Net Assets	$	6,771,178,424


Net Assets Consist of
Investors’ capital	$	4,145,930,328
Net unrealized appreciation (depreciation)		2,625,248,096

Net Assets	$	6,771,178,424


Statement of Operations		S&P 500 Index Master Portfolio


Six Months Ended June 30, 2015 (Unaudited)

Investment Income
Dividends — unaffiliated	$	62,201,697
Dividends — affiliated		363,842
Interest — affiliated		186,462
Securities lending — affiliated — net		173,537
Foreign taxes withheld		(12,996	)

Total income		62,912,542


Expenses
Investment advisory		1,492,644
Officer and Trustees		81,105
Professional		23,626

Total expenses		1,597,375
Less fees waived by the Manager		(179,447	)

Total expenses after fees waived		1,417,928

Net investment income		61,494,614


Realized and Unrealized Gain (Loss)
Net realized gain from:
Investments — unaffiliated		56,744,520
Investments — affiliated		64,049
Financial futures contracts		9,822,347

		66,630,916

Net change in unrealized appreciation (depreciation) on:
Investments — unaffiliated		(59,167,319	)
Investments — affiliated		77,472
Financial futures contracts		(4,117,513	)
Short sales		336

		(63,207,024	)

Net realized and unrealized gain		3,423,892

Net Increase in Net Assets Resulting from Operations	$	64,918,506


Statements of Changes in Net Assets		S&P 500 Index Master Portfolio


Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	61,494,614		$	108,892,318
Net realized gain		66,630,916			76,733,344
Net change in unrealized appreciation (depreciation)		(63,207,024	)		527,569,116

Net increase in net assets resulting from operations		64,918,506			713,194,778


Capital Transactions
Proceeds from contributions		2,008,992,597			539,481,303
Value of withdrawals		(1,051,310,965	)		(775,228,002	)

Net increase (decrease) in net assets derived from capital transactions		957,681,632			(235,746,699	)


Net Assets
Total increase in net assets		1,022,600,138			477,448,079
Beginning of period		5,748,578,286			5,271,130,207

End of period	$	6,771,178,424		$	5,748,578,286


Financial Highlights		S&P 500 Index Master Portfolio


	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)			2014		2013		2012		2011		2010

Total Return
Total return		1.23%	¹		13.63%		32.33%		15.98%		2.13%		15.06%


Ratio to Average Net Assets
Total expenses		0.05%	²		0.05%		0.05%		0.06%		0.06%		0.05%

Total expenses after fees waived and paid indirectly		0.04%	²		0.05%		0.05%		0.05%		0.05%		0.05%

Net investment income		1.91%	²		1.98%		2.08%		2.22%		2.08%		2.01%


Supplemental Data
Net assets, end of period (000)	$	6,771,178		$	5,748,578	$	5,271,130	$	1,717,932	$	2,108,316	$	2,158,717

Portfolio turnover rate		1%			3%		2%		10%		5%		9%

Aggregate total return.

Annualized.


Notes to Financial Statements (Unaudited)		S&P 500 Index Master Portfolio

1. Organization:

S&P 500 Index Master Portfolio (the “Master Portfolio”) (formerly known as S&P 500 Stock Master Portfolio), a series of Master Investment Portfolio (“MIP”), is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a diversified, open-end management investment company. MIP is organized as a Delaware statutory trust.

The Master Portfolio, together with certain other registered investment companies advised by BlackRock Advisor, LLC (“the Manager”) or its affiliates, is included in a complex of open-end funds referred to as the Equity-Liquidity Complex.

2. Significant Accounting Policies:

The Master Portfolio’s 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 and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Master Portfolio is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. The following is a summary of significant accounting policies followed by the Master Portfolio:

Valuation: The Master Portfolio’s investments are valued at fair value as of the close of trading on the New York Stock Exchange (“NYSE”) (generally 4:00 p.m., Eastern time). U.S. GAAP defines fair value as the price the Master Portfolio would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Master Portfolio determines the fair values of its financial instruments at market value using independent dealers or pricing services under policies approved by the Board of Trustees of MIP (the “Board”). 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 provide oversight of the pricing function for the Master Portfolio for all financial instruments. Investments in open-end registered investment companies are valued at NAV each business day. Equity investments traded on a recognized securities exchange are valued at the official close price each day, if available. For equity investments traded on more than one exchange, the official close price on the exchange where the stock is primarily traded is used. 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. Financial futures contracts traded on exchanges are valued at their last sale price.

Segregation and Collateralization: In cases where a Master Portfolio enters into certain investments (e.g., financial futures contracts and short sales) that would be “senior securities” for 1940 Act purposes, the Master Portfolio may segregate or designate on its books and records cash or liquid securities having a market value at least equal to the amount of the Master Portfolio’s future obligations under such investments. Doing so allows the investment to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Master Portfolio may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments or obligations.



BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015	29


Notes to Financial Statements (continued)		S&P 500 Index Master Portfolio

The Master Portfolio an arrangement with the custodian whereby fees may be reduced by credits earned on uninvested cash balances, which, if applicable, are shown as fees paid indirectly in the Statement of Operations. The custodian imposes fees on overdrawn cash balances, which can be offset by accumulated credits earned or may result in additional custody charges.

3. Securities and Other Investments:

Preferred Stock: The Master Portfolio may invest in preferred stock. 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.

The market value of securities on loan, all of which were classified as common stocks in the Master Portfolio’s Schedule of Investments, and the value of the 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. As of June 30, 2015, any securities on loan were collateralized by cash. The cash collateral invested by the securities lending agent, BlackRock Institutional Trust Company, N.A. (“BTC”), if any, is disclosed in the Schedule of Investments.

As of June 30, 2015, the following table is a summary of the Master Portfolio’s securities lending agreements by counterparty, which are subject to offset under an MSLA:


Counterparty	Securities Loaned at Value		Cash Collateral Received¹			Net Amount
Barclays Capital, Inc.	$	61,530	$	(61,530	)		—
Citigroup Global Markets, Inc.		1,601,215		(1,601,215	)		—
Credit Suisse Securities (USA) LLC		16,485,265		(16,485,265	)		—
Deutsche Bank Securities Inc.		1,182,861		(1,182,861	)		—
Goldman Sachs & Co.		8,023,119		(8,023,119	)		—
HSBC Bank PLC		15,606		(15,606	)		—
Jefferies LLC		353,328		(353,328	)		—
JP Morgan Securities LLC		13,245,643		(13,245,643	)		—
Merrill Lynch, Pierce, Fenner & Smith, Inc.		3,281,812		(3,281,812	)		—
Morgan Stanley		25,110		(25,110	)		—
National Financial Services LLC		166,300		(166,300	)		—
SG Americas Securities LLC		677,081		(677,081	)		—



30	BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015


Notes to Financial Statements (continued)		S&P 500 Index Master Portfolio


Counterparty	Securities Loaned at Value		Cash Collateral Received¹			Net Amount
State Street Bank & Trust Co.	$	1,063,559	$	(1,063,559	)		—
UBS Securities LLC		123,614		(123,614	)		—

Total	$	46,306,043	$	(46,306,043	)		—

Collateral with a value of $47,201,629 has been received in connection with securities lending agreements. Collateral received in excess of the value of securities loaned from the individual counterparty is not shown for financial reporting purposes.

Short Sales: The Master Portfolio may enter into short sale transactions in which the Master Portfolio sells a security it does not hold in anticipation of a decline in the market price of that security. When the Master Portfolio makes a short sale, it will borrow the security sold short from a broker/counterparty and deliver the security to the purchaser. To close out a short position, the Master Portfolio delivers the same security to the broker and records a liability to reflect the obligation to return the security to the broker. The amount of the liability is subsequently marked-to-market to reflect the market value of the short sale. The Master Portfolio maintains a segregated account of securities or deposits cash with the broker-dealer as collateral for the short sales. Cash deposited with the broker is recorded as an asset in the Statement of Assets and Liabilities. Securities segregated as collateral are denoted in the Schedule of Investments. The Master Portfolio may pay a financing fee for the difference between the market value of the short position and the cash collateral deposited with the broker which would be recorded as interest expense. The Master Portfolio is required to repay the counterparty any dividends received on the security sold short, which, if applicable, is shown as dividend expense in the Statement of Operations. The Master Portfolio may pay a fee on the assets borrowed from the counterparty, which, if applicable, is shown as stock loan fees in the Statement of Operations. The Master Portfolio is exposed to market risk based on the amount, if any, that the market value of the security increases beyond the market value at which the position was sold. Thus, a short sale of a security involves the risk that instead of declining, the price of the security sold short will rise. The short sale of securities involves the possibility of a theoretically unlimited loss since there is a theoretically unlimited potential for the market price of the security sold short to increase. A gain, limited to the price at which the Master Portfolio sold the security short, or a loss, unlimited as to the dollar amount, will be recognized upon the termination of a short sale if the market price is either less than or greater than the proceeds originally received. There is no assurance the Master Portfolio will be able to close out a short position at a particular time or at an acceptable price.

4. Derivative Financial Instruments:

The Master Portfolio engages in various portfolio investment strategies using derivative contracts both to increase the returns of the Master Portfolio and/or to manage economically its exposure to certain risks such as equity risk. These contracts may be transacted on an exchange or over-the-counter (“OTC”).

Financial Futures Contracts: The Master Portfolio invests in long and/or short positions in financial futures contracts and options on financial futures contracts to gain exposure to, or economically hedge against, changes in the value of equity securities (equity risk). Financial futures contracts are agreements between the Master Portfolio and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and at a specified date. Depending on the terms of the particular contract, financial futures contracts are settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date.



BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015	31


Notes to Financial Statements (continued)		S&P 500 Index Master Portfolio

The following is a summary of the Master Portfolio’s derivative financial instruments categorized by risk exposure:


Fair Values of Derivative Financial Instruments as of June 30, 2015
		Value
	Statement of Assets and Liabilities Location	Derivative Liabilities
Equity contracts	Net unrealized depreciation¹	$	(3,507,526	)

Includes cumulative appreciation (depreciation) on financial futures contracts as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.


The Effect of Derivative Financial Instruments in the Statement of Operations Six Months Ended June 30, 2015
	Net Realized Gain From		Net Change in Unrealized Appreciation (Depreciation) on
Equity contracts:
Financial futures contracts	$	9,822,347	$	(4,117,513	)

For the six months ended June 30, 2015, the average quarterly balances of outstanding derivative financial instruments were as follows:


Financial futures contracts:
Average notional value of contracts — long	$	202,491,840

5. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock for 1940 Act purposes.

MIP, on behalf of the Master Portfolio, entered into an Investment Advisory Agreement (the “Investment Advisory Agreement”) with BFA, the Master Portfolio’s investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory services. BFA is responsible for the management of the Master Portfolio’s investments and provides the necessary personnel, facilities, equipment and certain other services to the operations of the Master Portfolio. For such services, the Master Portfolio pays BFA a monthly fee based on a percentage of the Master Portfolio’s average daily net assets at an annual rate of 0.04%. Prior to April 30, 2015, the annual rates as a percentage of average daily net assets was 0.05%.

BAL, in consideration thereof, has agreed to bear all of the Master Portfolio’s and MIP’s ordinary operating expenses, excluding, generally, investment advisory fees, distribution fees, brokerage and other expenses related to the execution of portfolio transactions, extraordinary expenses and certain other expenses which are borne by the Master Portfolio.



32	BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015


Notes to Financial Statements (continued)		S&P 500 Index Master Portfolio

The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the Master Portfolio pays to the Manager indirectly through its investment in affiliated money market funds. This amount is included in fees waived by Manager in the Statement of Operations. However, the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid in connection with the Master Portfolio’s investment in other affiliated investment companies, if any. For six months ended June 30, 2015, the amount waived was $74,716.

The fees and expenses of the MIP’s trustees who are not “interested persons” of MIP, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and MIP’s independent registered public accounting firm (together, the “independent expenses”) are paid directly by the Master Portfolio. BFA has contractually agreed to cap the expenses of the Master Portfolio at the rate at which the Master Portfolio pays an advisory fee to BFA by providing an offsetting credit against the investment advisory fees paid by the Master Portfolio in an amount equal to the independent expenses. This contractual waiver is effective through April 30, 2016. The amount of the waiver, if any, is shown as fees reimbursed in the Statement of Operations.

Pursuant to a securities lending agreement effective March 9, 2015, the Master Portfolio retains 71.5% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment fees. In addition, commencing the business day following the date that the aggregate securities lending income earned across certain funds in the Equity-Liquidity Complex in a calendar year exceeds a specified threshold, the Master Portfolio, pursuant to the securities lending agreement, will retain for the remainder of the calendar year securities lending income in an amount equal to 75% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment fees. For the period January 1, 2015 through March 8, 2015, BTC could lend securities with respect to the Master Portfolio only when the difference between the borrower rebate rate and the risk free rate exceeded a certain level, and the Master Portfolio retained 80% (85% commencing on the business day following the date that the aggregate securities lending income earned across the Equity-Liquidity Complex in the calendar year 2014 exceeded a specified threshold and for the remainder of that calendar year) of securities lending income.

The share of securities lending income earned by the Master Portfolio is shown as securities lending — affiliated — net in the Statement of Operations. For the six months ended June 30, 2015, the Master Portfolio paid BTC $59,400 in total for securities lending agent services and collateral investment fees.

Certain officers and/or trustees of MIP are officers and/or directors of BlackRock or its affiliates.

The Master Portfolio may purchase securities from, or sell securities to, an affiliated fund provided the affiliation is due solely to having a common investment advisor, common officers, or common trustees. For the six months ended June 30, 2015, the purchase and sale transactions with an affiliated fund in compliance with Rule 17a-7 under the 1940 Act were $123,951,582 and $10,591,711, respectively.

6. Purchases and Sales:

For the six months ended June 30, 2015, purchases and sales of investments, excluding short-term securities were $945,541,698 and $50,022,682, respectively.



BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015	33


Notes to Financial Statements (continued)		S&P 500 Index Master Portfolio

7. Income Tax Information:

The Master Portfolio 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 Master Portfolio’s U.S. federal tax returns remains open for each of the four years ended December 31, 2014. The statutes of limitations on the Master Portfolio’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.

As of June 30, 2015, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:


Tax cost	$	3,806,423,172

Gross unrealized appreciation	$	3,081,075,880
Gross unrealized depreciation		(106,426,020	)

Net unrealized appreciation	$	2,974,649,860

8. Bank Borrowings:

MIP, on behalf of the Master Portfolio, along with certain other funds managed by the Manager and its affiliates (“Participating Funds”), is a party to a 364-day, $2.1 billion credit agreement with a group of lenders, under which the Master Portfolio may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Master Portfolio, can borrow up to an aggregate commitment amount of $1.6 billion, subject to asset coverage and other limitations as specified in the agreement. The credit agreement has the following terms: a fee of 0.06% 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 2016 unless extended or renewed. Participating Funds paid administration, legal and arrangement fees, which, if applicable, are included in miscellaneous expenses in the Statement of Operations, and along with commitment 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 June 30, 2015, the Master Portfolio did not borrow under the credit agreement.

9. Principal Risks:

10. Subsequent Events:



34	BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015


Disclosure of Investment Advisory Agreement

Activities and Composition of the Board

The Agreement



BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015	35


Disclosure of Investment Advisory Agreement (continued)

Board Considerations in Approving the Agreement

Funds are ranked by Lipper in quartiles, ranging from first to fourth, where first is the most desirable quartile position and fourth is the least desirable.



36	BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015


Disclosure of Investment Advisory Agreement (continued)

the approach to training and retaining portfolio managers and other research, advisory and management personnel. The Board engaged in a review of BlackRock’s compensation structure with respect to the Master Portfolio’s portfolio management team and BlackRock’s ability to attract and retain high-quality talent and create performance incentives.

The Board noted that for the one-, three- and five-year periods reported, the Portfolio’s gross performance (before expenses and fees), as agreed upon by the Board, was out of tolerance, within tolerance and within tolerance of its benchmark, respectively. BlackRock believes that gross performance relative to the benchmark is an appropriate performance metric for the Portfolio.

C. Consideration of the Advisory/Management Fees and the Cost of the Services and Profits to be Realized by BlackRock and its Affiliates from their Relationship with the Master Portfolio and the Portfolio: The Board, including the Independent Board Members, reviewed the Master Portfolio’s contractual advisory fee rate compared with the other funds in the Portfolio’s Lipper category. The contractual advisory fee rate is shown before taking into account any reimbursements or fee waivers. The Board also compared the Portfolio’s total expense ratio, as well as the Master Portfolio’s actual advisory fee rate, to those of other funds in the Portfolio’s Lipper category. The total expense ratio represents a fund’s total net operating expenses, including any 12b-1 or non-12b-1 service fees. The total expense ratio gives effect to any expense reimbursements or fee waivers that benefit a fund, and the actual advisory fee rate gives effect to any advisory fee reimbursements or waivers that benefit a fund. The Board considered the services provided and the fees charged by BlackRock and its affiliates to other types of clients with similar investment mandates, as applicable, including institutional accounts and sub-advised mutual funds.



BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015	37


Disclosure of Investment Advisory Agreement (continued)

and/or its affiliates. The Board reviewed BlackRock’s assumptions and methodology of allocating expenses in the profitability analysis, noting the inherent limitations in allocating costs among various advisory products. The Board recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, precision of expense allocations and business mix. As a result, calculating and comparing profitability at individual fund levels is difficult.

In addition, the Board considered the cost of the services provided to the Master Portfolio and the Portfolio by BlackRock, and BlackRock’s and its affiliates’ profits relating to the management and distribution of the Master Portfolio and the Portfolio and the other funds advised by BlackRock and its affiliates. As part of its analysis, the Board reviewed BlackRock’s methodology in allocating its costs to the management of the Master Portfolio and the Portfolio. The Board also considered whether BlackRock has the financial resources necessary to attract and retain high quality investment management personnel to perform its obligations under the Agreement and to continue to provide the high quality of services that is expected by the Board. The Board further considered factors including but not limited to BlackRock’s commitment of time, assumption of risk and liability profile in servicing the Master Portfolio and the Portfolio in contrast to what is required of BlackRock with respect to other products with similar investment mandates across the open-end fund, ETF, closed-end fund, sub-advised mutual fund and institutional account product channels, as applicable.

The Board noted that the Master Portfolio’s contractual advisory fee rate ranked in the first quartile, and that the actual advisory fee rate and the Portfolio’s total expense ratio each ranked in the first quartile, relative to the Portfolio’s Expense Peers. The Board noted that BlackRock proposed, and the Board agreed to, a contractual reduction of the Master Portfolio’s advisory fee. This advisory fee reduction was implemented on April 30, 2015. The Board also noted that BlackRock and its affiliates have contractually agreed to reimburse or otherwise compensate the Master Portfolio/Portfolio for the fees and expenses of the Independent Board Members, counsel to the Independent Board Members and the Master Portfolio’s/Portfolio’s independent registered public accounting firm.



38	BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015


Disclosure of Investment Advisory Agreement (concluded)

Conclusion



BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015	39


Officers and Trustees

Rodney D. Johnson, Chair of the Board and Trustee

David O. Beim, Trustee

Collette Chilton, Trustee

Frank J. Fabozzi, Trustee

Dr. Matina S. Horner, Trustee

Herbert I. London, Trustee

Cynthia A. Montgomery, Trustee

Barbara G. Novick, Trustee

Joseph P. Platt, Trustee

Robert C. Robb, Jr., Trustee

Toby Rosenblatt, Trustee

Mark Stalnecker, Trustee

Kenneth L. Urish, Trustee

Frederick W. Winter, Trustee

John M. Perlowski, President and Chief Executive Officer

Richard Hoerner, CFA, Vice President

Jennifer McGovern, Vice President

Neal Andrews, Chief Financial Officer

Jay Fife, Treasurer

Charles Park, Chief Compliance Officer

Fernanda Piedra, Anti-Money Laundering Compliance Officer

Benjamin Archibald, Secretary

Effective March 1, 2015, Charles Park resigned as Anti-Money Laundering Compliance Officer of the Trust/MIP and Fernanda Piedra became Anti-Money Laundering Compliance Officer of the Trust/MIP.

Effective May 18, 2015, Ian MacKinnon resigned as a Trustee of the Trust/MIP.



40	BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015


Additional Information


General Information

Householding

Availability of Quarterly Schedule of Investments

The Fund/Master Portfolio file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s/Master Portfolio’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The Fund’s/Master Portfolio’s Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762.

Availability of Proxy Voting Policies and Procedures

Availability of Proxy Voting Record

Information about how the Fund/Master Portfolio voted proxies relating to securities held in the Fund’s/Master Portfolio’s portfolio during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com or by calling (800) 441-7762 and (2) on the SEC’s website at http://www.sec.gov.

BlackRock’s Mutual Fund Family

Shareholder Privileges

Account Information

Automatic Investment Plans

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

Systematic Withdrawal Plans

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

Retirement Plans

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



BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015	41


Additional Information (concluded)


BlackRock Privacy Principles



42	BLACKROCK S&P 500 INDEX FUND	JUNE 30, 2015

LOGO


SPSF-6/15-SAR


Portfolio Information as of June 30, 2015 (Unaudited)


Ten Largest Holdings		Percent of Long-Term Investments


Apple, Inc.	4	%
JPMorgan Chase & Co.	2
Qualcomm, Inc.	2
CVS Health Corp.	2
Microsoft Corp.	2
Amgen, Inc.	2
Pfizer, Inc.	2
Home Depot, Inc.	1
Verizon Communications, Inc.	1
Google, Inc.	1


Sector Allocation		Percent of Long-Term Investments


Information Technology	23	%
Health Care	18
Financials	16
Consumer Discretionary	15
Industrials	8
Energy	7
Consumer Staples	7
Materials	3
Telecommunication Services	2
Utilities	1

For Master Portfolio compliance purposes, the Master Portfolio’s sector classifications refer to any 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 advisor. These definitions may not apply for purposes of this report, which may combine sector sub-classifications for reporting ease.


Portfolio Information as of June 30, 2015

Derivative Financial Instruments



ACTIVE STOCK MASTER PORTFOLIO	JUNE 30, 2015	1


Schedule of Investments June 30, 2015 (Unaudited)		(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Aerospace & Defense — 1.8%
The Boeing Co.		24,689	$	3,424,858
General Dynamics Corp.		69,442		9,839,237
Honeywell International, Inc.		24,530		2,501,324
Lockheed Martin Corp.		12,690		2,359,071
Northrop Grumman Corp. (a)		5,010		794,736
Orbital ATK, Inc.		28,364		2,080,783
Raytheon Co.		85,227		8,154,520
Rockwell Collins, Inc. (a)		41,580		3,839,913
Spirit Aerosystems Holdings, Inc., Class A (b)		13,800		760,518
Vectrus, Inc. (b)		26,560		660,547

				34,415,507
Air Freight & Logistics — 0.5%
FedEx Corp.		59,373		10,117,159
Airlines — 0.9%
American Airlines Group, Inc.		52,190		2,084,208
Delta Air Lines, Inc. (a)		20,851		856,559
Southwest Airlines Co. (a)		136,827		4,527,605
United Continental Holdings, Inc. (b)		172,405		9,139,189

				16,607,561
Auto Components — 1.1%
Allison Transmission Holdings, Inc.		22,973		672,190
Lear Corp.		184,521		20,714,327

				21,386,517
Automobiles — 0.4%
General Motors Co.		184,180		6,138,720
Thor Industries, Inc. (a)		13,947		784,937

				6,923,657
Banks — 2.6%
CIT Group, Inc.		129,702		6,029,846
Citizens Financial Group, Inc.		38,975		1,064,407
City National Corp.		1,790		161,798
East West Bancorp, Inc.		41,142		1,843,984
KeyCorp		206,680		3,104,334
PacWest Bancorp		19,664		919,489
Regions Financial Corp.		388,320		4,022,995
Signature Bank (b)		27,181		3,979,027
US Bancorp		304,230		13,203,582
Wells Fargo & Co.		292,069		16,425,960

				50,755,422
Beverages — 1.7%
The Coca-Cola Co.		169,275		6,640,658
Coca-Cola Enterprises, Inc.		133,468		5,797,850
Dr Pepper Snapple Group, Inc.		266,249		19,409,552
Molson Coors Brewing Co., Class B		8,573		598,481

				32,446,541
Biotechnology — 2.8%
Amgen, Inc.		209,140		32,107,173
Biogen, Inc. (b)		688		277,911
Celgene Corp. (b)		45,754		5,295,339
Gilead Sciences, Inc.		128,366		15,029,091
Medivation, Inc. (b)		3,677		419,913

				53,129,427
Capital Markets — 1.2%
Ameriprise Financial, Inc.		84,987		10,617,426
Capital Markets (concluded)
The Goldman Sachs Group, Inc.		17,434	$	3,640,045
Invesco Ltd.		57,999		2,174,382
KKR & Co. LP		55,516		1,268,541
Morgan Stanley		115,250		4,470,547
State Street Corp.		4,030		310,310

				22,481,251
Chemicals — 2.6%
Air Products & Chemicals, Inc.		23,917		3,272,563
Akzo Nobel NV — ADR		250,610		6,094,835
Ashland, Inc.		1,120		136,528
Axalta Coating Systems, Ltd. (b)		57,873		1,914,439
Cabot Corp.		57,487		2,143,690
Celanese Corp., Series A		9,300		668,484
Cytec Industries, Inc.		62,208		3,765,450
The Dow Chemical Co.		58,660		3,001,632
LyondellBasell Industries NV, Class A		100,209		10,373,636
The Mosaic Co.		117,244		5,492,881
PPG Industries, Inc.		109,890		12,606,581
Rayonier Advanced Materials, Inc.		49,496		804,805
Sigma-Aldrich Corp.		4,333		603,804

				50,879,328
Communications Equipment — 3.4%
Cisco Systems, Inc.		886,050		24,330,933
Harris Corp.		9,954		765,562
Motorola Solutions, Inc.		15,610		895,077
QUALCOMM, Inc.		552,379		34,595,497
Telefonaktiebolaget LM Ericsson — ADR (a)		554,760		5,791,695

				66,378,764
Construction & Engineering — 0.4%
AECOM Technology Corp. (a)(b)		170,280		5,632,862
Jacobs Engineering Group, Inc. (a)(b)		50,890		2,067,152

				7,700,014
Consumer Finance — 2.7%
Ally Financial, Inc. (b)		380,003		8,523,467
Capital One Financial Corp.		151,840		13,357,365
Discover Financial Services		354,370		20,418,800
Santander Consumer USA Holdings, Inc.		15,649		400,145
SLM Corp. (b)		961,013		9,485,198

				52,184,975
Containers & Packaging — 0.5%
Bemis Co., Inc.		19,634		883,726
Berry Plastics Group, Inc. (b)		33,051		1,070,852
Crown Holdings, Inc. (b)		9,820		519,576
MeadWestvaco Corp.		6,095		287,623
Packaging Corp. of America		61,293		3,830,200
Rock-Tenn Co., Class A		35,688		2,148,418

				8,740,395
Diversified Consumer Services — 0.2%
ServiceMaster Global Holdings, Inc. (b)		83,536		3,021,497
Diversified Financial Services — 4.3%
Berkshire Hathaway, Inc., Class B (b)		7,398		1,006,942
Citigroup, Inc.		437,090		24,144,852
CME Group, Inc.		3,997		371,961
FNFV Group (b)		275,406		4,235,744
IntercontinentalExchange Group, Inc.		4,032		901,595

Portfolio Abbreviations


ADR		American Depositary Receipts
S&P		Standard and Poor’s
USD		U.S. Dollar

See Notes to Financial Statements.



2	ACTIVE STOCK MASTER PORTFOLIO	JUNE 30, 2015


Schedule of Investments (continued)		(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Diversified Financial Services (concluded)
JPMorgan Chase & Co.		620,060	$	42,015,266
The NASDAQ OMX Group, Inc.		200,990		9,810,322

				82,486,682
Diversified Telecommunication Services — 1.3%
Verizon Communications, Inc.		555,310		25,882,999
Electric Utilities — 0.2%
American Electric Power Co., Inc.		9,039		478,796
Exelon Corp.		116,320		3,654,774
FirstEnergy Corp.		1,520		49,476
NextEra Energy, Inc.		4,173		409,079

				4,592,125
Electrical Equipment — 0.1%
SolarCity Corp. (a)(b)		49,100		2,629,305
Electronic Equipment, Instruments & Components — 0.7%
Avnet, Inc.		23,750		976,362
Fitbit, Inc., Series A (a)(b)		1,695		64,800
Flextronics International Ltd. (b)		266,208		3,010,812
Ingram Micro, Inc., Class A (b)		118,506		2,966,205
Keysight Technologies, Inc. (b)		90,999		2,838,259
National Instruments Corp.		89,634		2,640,618
TE Connectivity Ltd.		24,960		1,604,928

				14,101,984
Energy Equipment & Services — 1.4%
Atwood Oceanics, Inc. (a)		89,881		2,376,453
Baker Hughes, Inc.		33,160		2,045,972
Cameron International Corp. (b)		83,673		4,381,955
Dresser-Rand Group, Inc. (b)		2,776		236,460
Halliburton Co.		60,910		2,623,394
Oceaneering International, Inc.		61,620		2,870,876
Schlumberger Ltd.		104,362		8,994,961
Superior Energy Services, Inc.		161,780		3,403,851

				26,933,922
Food & Staples Retailing — 2.8%
Costco Wholesale Corp. (a)		52,722		7,120,633
CVS Health Corp.		327,969		34,397,389
The Kroger Co.		90,450		6,558,530
Rite Aid Corp. (b)		32,351		270,131
Supervalu, Inc. (b)		317,405		2,567,806
Wal-Mart Stores, Inc.		48,880		3,467,058

				54,381,547
Food Products — 0.6%
Cal-Maine Foods, Inc.		4,699		245,288
Kellogg Co.		3,010		188,727
Mead Johnson Nutrition Co.		30,832		2,781,663
Pilgrim’s Pride Corp. (a)		206,658		4,746,934
Tyson Foods, Inc., Class A		77,720		3,313,204

				11,275,816
Gas Utilities — 0.0%
UGI Corp.		2,780		95,771
Health Care Equipment & Supplies — 2.5%
Alere, Inc. (b)		9,777		515,737
Baxter International, Inc.		279,696		19,559,141
C.R. Bard, Inc.		1,358		231,811
Edwards Lifesciences Corp. (b)		80,546		11,472,167
Halyard Health, Inc. (a)(b)		35,396		1,433,538
Hologic, Inc. (a)(b)		165,500		6,298,930
Medtronic PLC		84,679		6,274,714
Zimmer Holdings, Inc. (a)		27,210		2,972,148

				48,758,186
Health Care Providers & Services — 7.3%
Aetna, Inc.		134,926		17,197,668
AmerisourceBergen Corp.		87,802		9,336,865
Cardinal Health, Inc.		112,008		9,369,469
Catamaran Corp. (b)		7,591		463,658
Centene Corp. (b)		131,512		10,573,565
Cigna Corp.		84,160		13,633,920
Community Health Systems, Inc. (b)		105,420		6,638,297
Health Net, Inc. (b)		30,601		1,962,136
Laboratory Corp. of America Holdings (b)		115,360		13,983,939
McKesson Corp.		55,270		12,425,249
Quest Diagnostics, Inc. (a)		106,910		7,753,113
UnitedHealth Group, Inc.		179,338		21,879,236
Universal Health Services, Inc., Class B		96,507		13,713,645
VCA, Inc. (b)		20,711		1,126,782

				140,057,542
Hotels, Restaurants & Leisure — 0.5%
Extended Stay America, Inc.		8,515		159,827
Jack in the Box, Inc.		42,909		3,782,857
Las Vegas Sands Corp. (a)		74,810		3,932,762
Six Flags Entertainment Corp.		11,126		499,001
Vail Resorts, Inc.		9,184		1,002,893
Wyndham Worldwide Corp.		2,230		182,659

				9,559,999
Household Durables — 0.8%
GoPro, Inc., Class A (b)		6,961		366,984
Newell Rubbermaid, Inc.		337,757		13,885,190
Tupperware Brands Corp. (a)		14,620		943,575

				15,195,749
Household Products — 0.3%
Church & Dwight Co., Inc.		16,270		1,319,985
Kimberly-Clark Corp.		40,154		4,255,119

				5,575,104
Independent Power and Renewable Electricity Producers — 0.7%
The AES Corp.		568,970		7,544,542
Calpine Corp. (b)		120,626		2,170,062
Dynegy, Inc. (a)(b)		108,450		3,172,163
Talen Energy Corp. (b)		31,708		544,109

				13,430,876
Industrial Conglomerates — 1.1%
3M Co.		126,009		19,443,189
The BWX Technologies, Inc.		29,297		960,942
General Electric Co.		42,218		1,121,732

				21,525,863
Insurance — 3.5%
ACE Ltd.		8,830		897,834
Allied World Assurance Co. Holdings AG		7,455		322,205
The Allstate Corp.		32,340		2,097,896
Aspen Insurance Holdings Ltd.		64,763		3,102,148
Assured Guaranty Ltd.		44,566		1,069,138
CNA Financial Corp.		115,002		4,394,226
Genworth Financial, Inc., Class A (b)		454,260		3,438,748
The Hanover Insurance Group, Inc.		101,985		7,549,950
Hartford Financial Services Group, Inc.		153,796		6,393,300
Lincoln National Corp.		128,902		7,633,576
MetLife, Inc.		36,746		2,057,409
Prudential Financial, Inc. (a)		96,049		8,406,209
The Travelers Cos., Inc.		74,280		7,179,905
Voya Financial, Inc.		186,822		8,681,618
XL Group PLC		134,700		5,010,840

				68,235,002

See Notes to Financial Statements.



ACTIVE STOCK MASTER PORTFOLIO	JUNE 30, 2015	3


Schedule of Investments (continued)		(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Internet & Catalog Retail — 1.2%
Liberty Interactive Corp., Series A (b)		255,535	$	7,091,096
Liberty TripAdvisor Holdings, Inc., Series A (b)		101,214		3,261,115
Liberty Ventures, Series A (b)		152,610		5,992,995
The Priceline Group, Inc. (a)(b)		6,150		7,080,926

				23,426,132
Internet Software & Services — 4.1%
eBay, Inc. (b)		133,868		8,064,208
Facebook, Inc., Class A (b)		193,170		16,567,225
Google, Inc., Class A (b)		45,710		24,685,228
Google, Inc., Class C (b)		38,054		19,807,488
IAC/InterActiveCorp		99,016		7,887,615
VeriSign, Inc. (a)(b)		17,916		1,105,775

				78,117,539
IT Services — 4.3%
Alliance Data Systems Corp. (b)		42,870		12,515,468
Amdocs Ltd.		124,000		6,769,160
Booz Allen Hamilton Holding Corp.		187,572		4,734,317
Cognizant Technology Solutions Corp., Class A (b)		129,190		7,892,217
Computer Sciences Corp.		4,510		296,036
DST Systems, Inc.		76,920		9,690,382
FleetCor Technologies, Inc. (b)		4,610		719,437
Leidos Holdings, Inc.		16,608		670,465
Mastercard, Inc., Class A		168,290		15,731,749
Total System Services, Inc.		179,151		7,483,137
Visa, Inc., Class A (a)		209,088		14,040,259
The Western Union Co.		17,070		347,033
Xerox Corp.		111,787		1,189,414

				82,079,074
Leisure Products — 0.1%
Hasbro, Inc.		19,060		1,425,497
Machinery — 1.8%
Dover Corp. (a)		22,260		1,562,207
Ingersoll-Rand PLC		133,482		8,999,356
Parker Hannifin Corp. (a)		63,670		7,406,731
Snap-on, Inc.		14,060		2,239,055
Stanley Black & Decker, Inc.		52,986		5,576,247
Trinity Industries, Inc. (a)		67,827		1,792,668
WABCO Holdings, Inc. (b)		49,730		6,152,595

				33,728,859
Media — 4.5%
Cablevision Systems Corp., New York Group, Class A (a)		33,090		792,175
CBS Corp., Class B		74,518		4,135,749
Comcast Corp., Class A		378,914		22,787,888
DIRECTV (a)(b)		98,460		9,136,103
Discovery Communications, Inc., Class C (b)		7,578		235,524
The Interpublic Group of Cos., Inc.		80,550		1,552,198
Liberty Media Corp., Class A (b)		5,918		213,285
Liberty Media Corp., Class C (b)		8,024		288,062
Omnicom Group, Inc.		75,300		5,232,597
Scripps Networks Interactive, Inc., Class A (a)		45,917		3,001,594
Starz, Class A (b)		23,157		1,035,581
Time Warner Cable, Inc.		14,990		2,670,768
Time Warner, Inc.		127,454		11,140,754
Viacom, Inc., Class B		321,854		20,804,643
The Walt Disney Co.		34,090		3,891,033

				86,917,954
Metals & Mining — 0.3%
Newmont Mining Corp.		242,096		5,655,363
Multi-Utilities — 0.5%
CenterPoint Energy, Inc.		321,145		6,111,389
DTE Energy Co.		47,960		3,579,735


Common Stocks	Shares		Value
Multi-Utilities (concluded)
PG&E Corp.		1,010	$	49,591

				9,740,715
Multiline Retail — 0.9%
Burlington Stores, Inc. (b)		46,937		2,403,174
Family Dollar Stores, Inc.		3,203		252,428
Macy’s, Inc.		161,350		10,886,285
Target Corp.		57,757		4,714,704

				18,256,591
Office Electronics — 0.2%
Zebra Technologies Corp., Class A (b)		39,324		4,366,930
Oil, Gas & Consumable Fuels — 5.4%
Apache Corp.		174,010		10,028,196
Devon Energy Corp.		113,198		6,734,149
EnLink Midstream LLC (a)		71,367		2,218,800
EOG Resources, Inc.		68,760		6,019,938
Exxon Mobil Corp.		186,713		15,534,522
Gulfport Energy Corp. (b)		165,780		6,672,645
Marathon Oil Corp.		625,042		16,588,615
Marathon Petroleum Corp.		260,252		13,613,782
PBF Energy, Inc.		56,457		1,604,508
Plains GP Holdings LP, Class A		116,229		3,003,357
Suncor Energy, Inc. (a)		277,690		7,642,029
Valero Energy Corp.		232,320		14,543,232

				104,203,773
Personal Products — 0.0%
Herbalife Ltd. (b)		2,773		152,765
Pharmaceuticals — 4.8%
AbbVie, Inc.		159,116		10,691,004
Hospira, Inc. (b)		6,304		559,228
Johnson & Johnson		218,132		21,259,145
Mallinckrodt PLC (b)		16,336		1,923,074
Merck & Co., Inc.		72,391		4,121,219
Perrigo Co. PLC		5,300		979,599
Pfizer, Inc.		903,173		30,283,391
Teva Pharmaceutical Industries Ltd. — ADR		336,289		19,874,680
Zoetis, Inc.		75,459		3,638,633

				93,329,973
Producer Durables: Miscellaneous — 0.0%
QLIK Technologies, Inc. (b)		26,802		936,998
Professional Services — 0.8%
Equifax, Inc.		7,245		703,417
Manpowergroup, Inc.		84,087		7,515,696
Nielsen Holdings NV		139,850		6,261,085

				14,480,198
Real Estate Investment Trusts (REITs) — 1.9%
Brixmor Property Group, Inc.		244,362		5,652,093
Columbia Property Trust, Inc.		13,168		323,274
Crown Castle International Corp.		5,929		476,099
Geo Group, Inc.		32,869		1,122,805
Host Hotels & Resorts, Inc. (a)		243,837		4,835,288
Outfront Media, Inc.		179,871		4,539,944
Post Properties, Inc.		22,511		1,223,923
RLJ Lodging Trust		36,806		1,096,083
Simon Property Group, Inc.		61,176		10,584,672
Starwood Property Trust, Inc.		159,760		3,446,023
Weingarten Realty Investors		65,994		2,157,344
WP Glimcher, Inc.		151,191		2,045,614

				37,503,162
Road & Rail — 0.9%
Norfolk Southern Corp.		42,260		3,691,834
Ryder System, Inc. (a)		8,626		753,654

See Notes to Financial Statements.



4	ACTIVE STOCK MASTER PORTFOLIO	JUNE 30, 2015


Schedule of Investments (continued)		(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Road & Rail (concluded)
Union Pacific Corp.		142,234	$	13,564,856

				18,010,344
Semiconductors & Semiconductor Equipment — 1.9%
Applied Materials, Inc.		178,420		3,429,232
Intel Corp.		322,727		9,815,742
Lam Research Corp.		8,016		652,102
Micron Technology, Inc. (b)		495,069		9,327,100
NVIDIA Corp.		187,020		3,760,972
NXP Semiconductor NV (b)		13,175		1,293,785
Skyworks Solutions, Inc.		4,331		450,857
Teradyne, Inc.		221,940		4,281,223
Texas Instruments, Inc.		81,673		4,206,976

				37,217,989
Software — 3.2%
CDK Global, Inc.		11,963		645,763
Check Point Software Technologies Ltd. (b)		104,262		8,294,042
Electronic Arts, Inc. (b)		15,690		1,043,385
Informatica Corp. (b)		4,074		197,467
Intuit, Inc.		28,960		2,918,299
King Digital Entertainment PLC		17,229		245,513
Microsoft Corp.		757,521		33,444,552
Oracle Corp.		333,310		13,432,393
PTC, Inc. (b)		49,631		2,035,864

				62,257,278
Specialty Retail — 4.2%
AutoNation, Inc. (b)		20,498		1,290,964
The Gap, Inc. (a)		100,430		3,833,413
GNC Holdings, Inc., Class A		162,580		7,231,558
The Home Depot, Inc.		255,195		28,359,820
Lowe’s Cos., Inc.		361,418		24,204,164
Penske Automotive Group, Inc.		48,895		2,547,919
Ross Stores, Inc.		98,954		4,810,154
Sears Hometown and Outlet Stores, Inc. (b)		20,605		195,748
TJX Cos., Inc.		135,120		8,940,890

				81,414,630
Technology Hardware, Storage & Peripherals — 4.5%
Apple, Inc.		546,038		68,486,816
EMC Corp.		385,900		10,183,901
Hewlett-Packard Co.		108,069		3,243,151
Western Digital Corp.		54,929		4,307,532

				86,221,400
Textiles, Apparel & Luxury Goods — 0.8%
Carter’s, Inc.		9,186		976,472
Deckers Outdoor Corp. (a)(b)		48,383		3,482,124
Textiles, Apparel & Luxury Goods (concluded)
Fossil Group, Inc. (a)(b)		37,490		2,600,306
Michael Kors Holdings Ltd. (b)		16,058		675,881
NIKE, Inc., Class B		30,077		3,248,918
VF Corp.		61,020		4,255,535

				15,239,236
Thrifts & Mortgage Finance — 0.1%
Nationstar Mortgage Holdings, Inc. (a)(b)		110,115		1,849,932
Tobacco — 1.3%
Altria Group, Inc.		380,310		18,600,962
Philip Morris International, Inc.		15,334		1,229,327
Reynolds American, Inc.		12,464		930,562
Vector Group Ltd.		173,269		4,064,891

				24,825,742
Wireless Telecommunication Services — 0.5%
Telephone & Data Systems, Inc.		255,740		7,518,756
United States Cellular Corp. (b)		45,611		1,718,166

				9,236,922
Total Common Stocks — 99.1%				1,912,481,483



Preferred Stocks
Food Products — 0.1%
Tyson Foods, Inc.		27,839		1,433,987
Machinery — 0.0%
Stanley Black & Decker, Inc., 6.25% (a)(c)		3,660		436,455
Total Preferred Stocks — 0.1%				1,870,442
Total Long-Term Investments (Cost — $1,788,248,506) — 99.2%				1,914,351,925



Short-Term Securities
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (d)(e)		47,917,351		47,917,351
BlackRock Cash Funds: Prime, SL Agency Shares, 0.13% (d)(e)(f)		81,261,145		81,261,145
Total Short-Term Securities (Cost — $129,178,496) — 6.7%				129,178,496
Total Investments (Cost — $1,917,427,002) — 105.9%				2,043,530,421
Liabilities in Excess of Other Assets — (5.9)%				(114,746,234	)

Net Assets — 100.0%			$	1,928,784,187

Notes to Schedule of Investments

(a)

Security, or a portion of security, is on loan.

(b)

Non-income producing security.

(c)

Convertible security.

(d)


Affiliate	Shares Held at December 31, 2014		Net Activity			Shares Held at June 30, 2015		Net Income
BlackRock Cash Funds: Institutional, SL Agency Shares		60,987,578		(13,070,227	)		47,917,351	$	47,811
BlackRock Cash Funds: Prime, SL Agency Shares		5,562,536		75,698,609			81,261,145	$	109,875	¹
¹ Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.

(e)

Represents the current yield as of report date.

(f)

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

See Notes to Financial Statements.



ACTIVE STOCK MASTER PORTFOLIO	JUNE 30, 2015	5


Schedule of Investments (concluded)

•

As of June 30, 2015, financial futures contracts outstanding were as follows:


Contracts Long		Issue	Exchange	Expiration	Notional Value		Unrealized Depreciation
	45	S&P 500 E-Mini Index	Chicago Mercantile	September 2015	$	4,622,400	$	(102,836	)

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that the Master Portfolio has the ability to access

•

As of June 30, 2015, the following tables summarize the Master Portfolio’s investments and derivative financial instruments categorized in the disclosure hierarchy:


	Level 1			Level 2		Level 3		Total
Assets:
Investments:
Long-Term Investments:
Common Stocks¹	$	1,912,481,483			—		—	$	1,912,481,483
Preferred Stocks¹		1,870,442			—		—		1,870,442
Short-Term Securities		129,178,496			—		—		129,178,496

Total	$	2,043,530,421			—		—	$	2,043,530,421

¹See above Schedule of Investments for values in each sector.
	Level 1			Level 2		Level 3		Total
Derivative Financial Instruments²
Liabilities:
Equity contracts	$	(102,836	)		—		—	$	(102,836	)
²Derivative financial instruments are financial futures contracts, which are valued at the unrealized appreciation/depreciation on the instrument.


	Level 1		Level 2			Level 3		Total
Assets:
Cash	$	252,322		—			—	$	252,322
Cash pledged for financial futures contracts		1,265,000		—			—		1,265,000
Liabilities:
Collateral on securities loaned at value		—	$	(81,261,145	)		—		(81,261,145	)

Total	$	1,517,322	$	(81,261,145	)		—	$	(79,743,823	)

During the six months ended June 30, 2015, there were no transfers between levels.

See Notes to Financial Statements.



6	ACTIVE STOCK MASTER PORTFOLIO	JUNE 30, 2015


Statement of Assets and Liabilities


June 30, 2015 (Unaudited)

Assets
Investments at value — unaffiliated (including securities loaned at value of $79,540,897) (cost — $1,788,248,506)	$	1,914,351,925
Investments at value — affiliated (cost — $129,178,496)		129,178,496
Cash		252,322
Cash pledged as collateral for financial futures contracts		1,265,000
Receivables:
Investments sold		75,055,343
Dividends		1,777,688
Securities lending income — affiliated		20,432
Variation margin receivable on financial futures contracts		166,363
Prepaid expenses		10,110

Total assets		2,122,077,679


Liabilities
Collateral on securities loaned at value		81,261,145
Payables:
Investments purchased		57,809,435
Withdrawals to investors		53,933,740
Investment advisory fees		245,211
Trustees’ fees payable		14,234
Other accrued expenses payable		29,727

Total liabilities		193,293,492

Net Assets	$	1,928,784,187


Net Assets Consist of
Investors’ capital	$	1,802,783,604
Net unrealized appreciation (depreciation)		126,000,583

Net Assets	$	1,928,784,187


Statement of Operations


Six Months Ended June 30, 2015 (Unaudited)

Investment Income
Dividends	$	20,611,852
Securities lending — affiliated — net		109,875
Income — affiliated		47,811
Foreign taxes withheld		(300,067	)

Total income		20,469,471


Expenses
Investment advisory		2,732,203
Administration		1,117,756
Trustees		37,289
Professional		23,078

Total expenses		3,910,326
Less fees waived by Manager		(1,141,345	)
Less fees waived by Administrator		(1,117,756	)

Total expenses after fees waived		1,651,225

Net investment income		18,818,246


Realized and Unrealized Gain (Loss)
Net realized gain (loss) from:
Investments		213,475,595
Financial futures contracts		226,280
Foreign currency transactions		(33,396	)

		213,668,479

Net change in unrealized appreciation (depreciation) on:
Investments		(189,911,012	)
Financial futures contracts		(337,224	)
Foreign currency translations		7,410

		(190,240,826	)

Net realized and unrealized gain		23,427,653

Net Increase in Net Assets Resulting from Operations	$	42,245,899


Statements of Changes in Net Assets


Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	18,818,246		$	40,597,242
Net realized gain		213,668,479			485,318,772
Net change in unrealized appreciation (depreciation)		(190,240,826	)		(246,323,337	)

Net increase in net assets resulting from operations		42,245,899			279,592,677


Capital Transactions
Proceeds from contributions		154,392,791			998,522,489
Value of withdrawals		(702,280,489	)		(1,784,231,951	)

Net decrease in net assets derived from capital transactions		(547,887,698	)		(785,709,462	)


Net Assets
Total decrease in net assets		(505,641,799	)		(506,116,785	)
Beginning of period		2,434,425,986			2,940,542,771

End of period	$	1,928,784,187		$	2,434,425,986


Financial Highlights


	Six Months Ended June 30, 2015 (Unaudited)		Year Ended December 31,
	Six Months Ended June 30, 2015 (Unaudited)		2014		2013		2012		2011		2010

Total Return
Total Return		1.47%¹		11.74%		34.02%		15.55%		2.20%		11.04%


Ratios to Average Net Assets
Total expenses		0.35%²		0.35%		0.35%		0.35%		0.35%		0.35%

Total expenses after fees waived		0.15%²		0.17%		0.23%		0.26%		0.27%		0.29%

Net investment income		1.68%²		1.56%		1.55%		2.03%		1.70%		1.50%


Supplemental Data
Net assets, end of period (000)		$1,928,784		$2,434,426		$2,940,543		$2,792,818		$2,717,250		$2,513,424

Portfolio turnover rate		63%		119%		153%		120%		275%		120%

Aggregate total return.

Annualized.


Notes to Financial Statements (Unaudited)

1. Organization:

Active Stock Master Portfolio (the “Master Portfolio”), a series of Master Investment Portfolio (“MIP”), is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a diversified, open-end management investment company. MIP is organized as a Delaware statutory trust.

The Master Portfolio, together with other registered investment companies advised by BlackRock Fund Advisors (the “Manager”) or its affiliates, is included in a complex of open-end funds referred to as the Equity-Liquidity Complex.

2. Significant Accounting Policies:

Equity investments traded on a recognized securities exchange are valued at the official close price each day, if available. For equity investments traded on more than one exchange, the official close price on the exchange where the stock is primarily traded is used. Equity investments traded on a recognized exchange for which there were no sales on that day may be valued at the last available bid (long positions) or ask (short positions) price. Investments in open-end registered investment companies are valued at net asset value each business day.

Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of business on the NYSE. Occasionally, events affecting the values of such instruments may occur between the foreign market close and the close of business on the NYSE that may not be reflected in the computation of the Master Portfolio’s net assets. If events (e.g., a company announcement, market volatility or a natural disaster) occur during such periods that are expected to materially affect the value of such instruments, those instruments may be Fair Value Investments and be valued at their fair value, as determined in good faith by the Global Valuation Committee, or its delegate, using a pricing service and/or policies approved by the Board. Each business day, the Master Portfolio 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 business on the NYSE, which follows the close of the local markets.



ACTIVE STOCK MASTER PORTFOLIO	JUNE 30, 2015	11


Notes to Financial Statements (continued)

3. Securities and Other Investments:



12	ACTIVE STOCK MASTER PORTFOLIO	JUNE 30, 2015


Notes to Financial Statements (continued)

As of June 30, 2015, the following table is a summary of the Master Portfolio’s securities lending agreements by counterparty, which are subject to offset under an MSLA:


Counterparty	Securities Loaned at Value		Cash Collateral Received¹			Net Amount
Barclays Capital, Inc.	$	68,096	$	(68,096	)		—
Citigroup Global Markets, Inc.		10,507,306		(10,507,306	)		—
Credit Suisse Securities (USA) LLC		9,034,990		(9,034,990	)		—
Deutsche Bank Securities, Inc.		627,604		(627,604	)
HSBC Bank, PLC.		1,131,049		(1,131,049	)		—
Jefferies & Co., LLC		2,803,145		(2,803,145	)
JP Morgan Clearing Corp.		18,578,912		(18,578,912	)		—
Merrill Lynch, Pierce, Fenner & Smith, Inc.		27,759,562		(27,759,562	)		—
Morgan Stanley & Co. LLC		2,023,392		(2,023,392	)		—
National Financial Services LLC		218,401		(218,401	)
State Street Bank & Trust Co.		4,910,288		(4,910,288	)		—
Wells Fargo Securities, LLC		1,878,152		(1,878,152	)

Total	$	79,540,897	$	(79,540,897	)		—

Collateral with a value of $81,261,145 has been received in connection with securities lending agreements. Excess of collateral received from the individual counterparty is not shown for financial reporting purposes.

4. Derivative Financial Instruments:

The Master Portfolio engages in various portfolio investment strategies using derivative contracts both to increase the returns of the Master Portfolio and/or to manage economically its exposure to certain risks such as equity risk. These contracts may be transacted on an exchange or OTC.

Financial Futures Contracts: The Master Portfolio invests in long and/or short positions in financial futures contracts and options on financial futures contracts to gain exposure to, or economically hedge against, changes in the value of equity securities (equity risk). Financial futures contracts are agreements between the Master Portfolio and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and at a specified date. Depending on the terms of the particular contract, financial futures contracts are settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date.

The following is a summary of the Master Portfolio’s derivative financial instruments categorized by risk exposure:

Includes cumulative appreciation (depreciation) on financial futures contracts, if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.



ACTIVE STOCK MASTER PORTFOLIO	JUNE 30, 2015	13


Notes to Financial Statements (continued)


The Effect of Derivative Financial Instruments in the Statement of Operations Six Months Ended June 30, 2015
	Net Realized Gain (Loss) From			Net Change in Unrealized Appreciation (Depreciation) on
Equity contracts:
Financial futures contracts		$	226,280	$	(337,224	)

For the six months ended June 30, 2015, the average quarterly balances of outstanding derivative financial instruments were as follows:


Financial futures contracts:
Average notional value of contracts purchased		$11,636,320

5. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock for 1940 Act purposes.

MIP, on behalf of the Master Portfolio, entered an Investment Advisory Agreement with the Manager, the Master Portfolio’s investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory services. The Manager is responsible for the management of the Master Portfolio’s portfolio and provides the necessary personnel, facilities, equipment and certain other services to the operations of the Master Portfolio. For such services, the Master Portfolio pays the Manager a monthly fee based on a percentage of the Master Portfolio’s average daily net assets at the following annual rates:


Average Daily Net Assets	Investment Advisory Fee
First $1 Billion		0.25%
$1 Billion — $3 Billion		0.24%
$3 Billion — $5 Billion		0.23%
$5 Billion — $10 Billion		0.22%
Greater than $10 Billion		0.21%

MIP, on behalf of the Master Portfolio, entered into an Administration Agreement with BlackRock Advisors, LLC (the “Administrator”), which has agreed to provide general administration services (other than investment advice and related portfolio activities). The Administrator, in consideration thereof, has agreed to bear all of the Master Portfolio’s ordinary operating expenses, excluding, generally, investment advisory fees, distribution fees, brokerage and other expenses related to the execution of portfolio transactions, extraordinary expenses and certain other expenses which are borne by the Master Portfolio. The Administrator is entitled to receive for these administration services an annual fee of 0.10% based on the average daily net assets of the



14	ACTIVE STOCK MASTER PORTFOLIO	JUNE 30, 2015


Notes to Financial Statements (continued)

Master Portfolio. The Administrator voluntarily agreed to waive a portion of its administration fees payable by the Master Portfolio in an amount sufficient to maintain the 0.35% advisory fees payable of the LifePath Master Portfolios, which invest in the Master. This arrangement is voluntary and may be terminated by the Administrator at any time.

From time to time, the Administrator may waive such fees in whole or in part. Any such waiver will reduce the expenses of the Master Portfolio and, accordingly, have a favorable impact on its performance. The Administrator may delegate certain of its administration duties to sub-administrators.

The fees and expenses of the Master Portfolio’s trustees who are not “interested persons” of the Trust, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and Master Porfolio’s independent registered public accounting firm (together, the “independent expenses”) are paid directly by the Master Portfolio. With respect to the independent expenses discussed above, the Administrator has contractually agreed to provide an offsetting credit against the administration fees paid by the Master Portfolio in an amount equal to the independent expenses through April 30, 2016. The amounts of the waivers and offsetting credits are shown as fees waived by Administrator in the Statement of Operations.

The Manager has voluntarily agreed to waive a portion of its advisory fees payable by the Master Portfolio in an amount sufficient to maintain the 0.35% advisory fees of the LifePath Master Portfolios. This voluntary waiver may be terminated at any time. This amount is included in fees waived by Manager in the Statement of Operations. For the six months ended June 30, 2015, the Manager waived $1,122,235 pursuant to this agreement.

The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the Master Portfolio pays to the Manager indirectly through its investment in affiliated money market funds. This amount is included in fees waived by the Manager in the Statement of Operations. However, the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid in connection with the Master Portfolio’s investments in other affiliated investment companies, if any. For the six months ended June 30, 2015, the amount waived was $19,110.

The share of securities lending income earned by the Master Portfolio is shown as securities lending – affiliated – net in the Statement of Operations. For the six months ended June 30, 2015, the Master Portfolio paid BTC $40,315 in total for securities lending agent services.

Certain officers and/or trustees of MIP are officers and/or directors of BlackRock or its affiliates.

6. Purchases and Sales:

For the six months ended June 30, 2015, purchases and sales of investments excluding short-term securities, were $1,358,411,023 and $1,850,272,360, respectively.

7. Income Tax Information:

The Master Portfolio 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 Master Portfolio’s U.S. federal tax returns remains open for each of the four years ended December 31, 2014. The statutes of limitations on the Master Portfolio’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.



ACTIVE STOCK MASTER PORTFOLIO	JUNE 30, 2015	15


Notes to Financial Statements (concluded)

As of June 30, 2015, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:


Tax cost	$	1,947,513,025

Gross unrealized appreciation	$	178,619,423
Gross unrealized depreciation		(82,602,027	)

Net unrealized appreciation	$	96,017,396

8. Bank Borrowings:

MIP, on behalf of the Master Portfolio, along with certain other funds managed by the Manager and its affiliates (“Participating Funds”), is a party to a 364-day, $2.1 billion credit agreement with a group of lenders, under which the Master Portfolio may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Master Portfolio, can borrow up to an aggregate commitment amount of $1.6 billion, subject to asset coverage and other limitations as specified in the agreement. The credit agreement has the following terms: a fee of 0.06% 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 2016 unless extended or renewed. Participating Funds paid administration, legal and arrangement, and along with commitment 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 June 30, 2015, the Master Portfolio did not borrow under the credit agreement.

9. Principal Risks:

As of June 30, 2015, the Master Portfolio invested a significant portion of its assets in securities in the Information Technology sector. Changes in economic conditions affecting such sector would have a greater impact on the Master Portfolio and could affect the value, income and/or liquidity of positions in such securities.

10. Subsequent Events:



16	ACTIVE STOCK MASTER PORTFOLIO	JUNE 30, 2015


Disclosure of Investment Advisory Agreement

Activities and Composition of the Board

On the date of the May Meeting, the Board consisted of fourteen individuals, thirteen of whom were not “interested persons” of the Master Fund as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Board Members”). The Board Members are responsible for the oversight of the operations of the Master Fund and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Board Members have retained independent legal counsel to assist them in connection with their duties. The Chair of the Board is an Independent Board Member. The Board has established five standing committees: an Audit Committee, a Governance and Nominating Committee, a Compliance Committee, a Performance Oversight and Contract Committee and an Executive Committee, each of which is chaired by an Independent Board Member and composed of Independent Board Members (except for the Executive Committee, which also has one interested Board Member).

The Agreement

Pursuant to the 1940 Act, the Board is required to consider the continuation of the Agreement on an annual basis. The Board has four quarterly meetings per year, each extending over two days, a fifth one-day meeting to consider specific information surrounding the consideration of renewing the Agreement, and additional in-person and telephonic meetings as needed. In connection with this year-long deliberative process, the Board assessed, among other things, the nature, extent and quality of the services provided to the Portfolio by BlackRock, BlackRock’s personnel and affiliates, including (as applicable) investment management services; administrative and shareholder services; the oversight of fund service providers; marketing services; risk oversight; compliance; and ability to meet applicable legal and regulatory requirements.

The Board, acting directly and through its committees, considers at each of its meetings, and from time to time as appropriate, factors that are relevant to its annual consideration of the renewal of the Agreement, including the services and support provided by BlackRock to the Portfolio and its interest holders. Among the matters the Board considered were: (a) investment performance for one-year, three-year, five-year and/or since inception periods, as applicable, against peer funds, applicable benchmark, and performance metrics, as applicable, as well as senior management’s and portfolio managers’ analysis of the reasons for any over performance or underperformance relative to its peers, benchmark, and other performance metrics, as applicable; (b) fees, including advisory, administration, if applicable, and other amounts paid to BlackRock and its affiliates by the Portfolio for services, such as marketing and distribution, call center and fund accounting; (c) Portfolio operating expenses and how BlackRock allocates expenses to the Portfolio; (d) the resources devoted to, risk oversight of, and compliance reports relating to, implementation of the Portfolio’s investment objective(s), policies and restrictions, and meeting new regulatory requirements; (e) the Master Fund’s compliance with its compliance policies and procedures; (f) the nature, cost and character of non-investment management services provided by BlackRock and its affiliates; (g) BlackRock’s and other service providers’ internal controls and risk and compliance oversight mechanisms; (h) BlackRock’s implementation of the proxy voting policies approved by the Board; (i) the use of brokerage commissions and execution quality of portfolio transactions; (j) BlackRock’s implementation of the Master Fund’s valuation and liquidity procedures; (k) an analysis of management fees for products with similar investment mandates across the open-end fund, exchange-traded fund (“ETF”), closed-end fund and institutional account product channels, as applicable, and the similarities and differences between these products and the services provided as compared to the Portfolio; (l) BlackRock’s compensation methodology for its investment professionals and the incentives it creates, along with investment professionals’ investments in the fund(s) they manage; and (m) periodic updates on BlackRock’s business.

Board Considerations in Approving the Agreement

Funds are ranked by Lipper in quartiles, ranging from first to fourth, where first is the most desirable quartile position and fourth is the least desirable.



ACTIVE STOCK MASTER PORTFOLIO	JUNE 30, 2015	17


Disclosure of Investment Advisory Agreement (continued)

and its affiliates pursuant to the Agreement and a discussion of fall-out benefits to BlackRock and its affiliates; (c) a general analysis provided by BlackRock concerning investment management fees charged to other clients, such as institutional clients, sub-advised mutual funds, ETFs and closed-end funds, under similar investment mandates, as well as the performance of such other clients, as applicable; (d) review of non-management fees; (e) the existence, impact and sharing of potential economies of scale; (f) a summary of aggregate amounts paid by the Portfolio to BlackRock; (g) sales and redemption data regarding the Portfolio’s interests; and (h) if applicable, a comparison of management fees to similar BlackRock open-end funds, as classified by Lipper.

At the May Meeting, the Board, including the Independent Board Members, approved the continuation of the Agreement between the Manager and the Master Fund with respect to the Portfolio for a one-year term ending June 30, 2016. In approving the continuation of the Agreement, the Board considered: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of the Portfolio and BlackRock; (c) the advisory fee and the cost of the services and profits to be realized by BlackRock and its affiliates from their relationship with the Portfolio; (d) the Portfolio’s costs to investors compared to the costs of Expense Peers and performance compared to the relevant performance comparison as previously discussed; (e) the sharing of potential economies of scale; (f) fall-out benefits to BlackRock and its affiliates as a result of its relationship with the Portfolio; and (g) other factors deemed relevant by the Board Members.

The Board also considered other matters it deemed important to the approval process, such as payments made to BlackRock or its affiliates relating to the placement of Portfolio interests, securities lending and cash management, services related to the valuation and pricing of portfolio holdings of the Portfolio, direct and indirect benefits to BlackRock and its affiliates from their relationship with the Portfolio and advice from independent legal counsel with respect to the review process and materials submitted for the Board’s review. The Board noted the willingness of BlackRock personnel to engage in open, candid discussions with the Board. The Board did not identify any particular information as determinative, and each Board Member may have attributed different weights to the various items considered.

A. Nature, Extent and Quality of the Services Provided by BlackRock: The Board, including the Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of the Portfolio. Throughout the year, the Board compared Portfolio performance to the performance of a comparable group of mutual funds, relevant benchmark, and performance metrics, as applicable. The Board met with BlackRock’s senior management personnel responsible for investment activities, including the senior investment officers. The Board also reviewed the materials provided by the Portfolio’s portfolio management team discussing the Portfolio’s performance and the Portfolio’s investment objective(s), strategies and outlook.

The Board considered, among other factors, with respect to BlackRock: the number, education and experience of investment personnel generally and the Portfolio’s portfolio management team; BlackRock’s research capabilities; investments by portfolio managers in the funds they manage; portfolio trading capabilities; use of technology; commitment to compliance; credit analysis capabilities; risk analysis and oversight capabilities; and the approach to training and retaining portfolio managers and other research, advisory and management personnel. The Board engaged in a review of BlackRock’s compensation structure with respect to the Portfolio’s portfolio management team and BlackRock’s ability to attract and retain high-quality talent and create performance incentives.

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

B. The Investment Performance of the Portfolio and BlackRock: The Board, including the Independent Board Members, also reviewed and considered the performance history of the Portfolio. In preparation for the April Meeting, the Board worked with its independent legal counsel, BlackRock and Lipper to develop a template for, and was provided with, reports independently prepared by Lipper, which included a comprehensive analysis of the Portfolio’s performance. The Board also reviewed a narrative and statistical analysis of the Lipper data that was prepared by BlackRock. In connection with its review, the Board received and reviewed information regarding the investment performance of the Portfolio as compared to other funds in its applicable Lipper



18	ACTIVE STOCK MASTER PORTFOLIO	JUNE 30, 2015


Disclosure of Investment Advisory Agreement (continued)

category. The Board was provided with a description of the methodology used by Lipper to select peer funds and periodically meets with Lipper representatives to review its methodology. The Board and its Performance Oversight and Contract Committee regularly review, and meet with Portfolio management to discuss, the performance of the Portfolio throughout the year.

The Board noted that for each of the one-, three- and five-year periods reported, the Portfolio ranked in the second quartile against its Lipper Performance Universe.

C. Consideration of the Advisory/Management Fees and the Cost of the Services and Profits to be Realized by BlackRock and its Affiliates from their Relationship with the Portfolio: The Board, including the Independent Board Members, reviewed the Portfolio’s contractual advisory fee rate compared with the other funds in its Lipper category. The contractual advisory fee rate is shown before taking into account any reimbursements or fee waivers. The Board also compared the Portfolio’s total expense ratio, as well as its actual advisory fee rate, to those of other funds in its Lipper category. The total expense ratio represents a fund’s total net operating expenses, including any 12b-1 or non-12b-1 service fees. The total expense ratio gives effect to any expense reimbursements or fee waivers that benefit a fund, and the actual advisory fee rate gives effect to any advisory fee reimbursements or waivers that benefit a fund. The Board considered the services provided and the fees charged by BlackRock and its affiliates to other types of clients with similar investment mandates, as applicable, including institutional accounts and sub-advised mutual funds.

The Board received and reviewed statements relating to BlackRock’s financial condition. The Board reviewed BlackRock’s profitability methodology and was also provided with a profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to the Portfolio. The Board reviewed BlackRock’s profitability with respect to the Portfolio and other funds the Board currently oversees for the year ended December 31, 2014 compared to available aggregate profitability data provided for the two prior years. The Board reviewed BlackRock’s profitability with respect to certain other U.S. fund complexes managed by the Manager and/or its affiliates. The Board reviewed BlackRock’s assumptions and methodology of allocating expenses in the profitability analysis, noting the inherent limitations in allocating costs among various advisory products. The Board recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, precision of expense allocations and business mix. As a result, calculating and comparing profitability at individual fund levels is difficult.

In addition, the Board considered the cost of the services provided to the Portfolio by BlackRock, and BlackRock’s and its affiliates’ profits relating to the management and distribution of the Portfolio and the other funds advised by BlackRock and its affiliates. As part of its analysis, the Board reviewed BlackRock’s methodology in allocating its costs to the management of the Portfolio. The Board also considered whether BlackRock has the financial resources necessary to attract and retain high quality investment management personnel to perform its obligations under the Agreement and to continue to provide the high quality of services that is expected by the Board. The Board further considered factors including but not limited to BlackRock’s commitment of time, assumption of risk and liability profile in servicing the Portfolio in contrast to what is required of BlackRock with respect to other products with similar investment mandates across the open-end fund, ETF, closed-end fund, sub-advised mutual fund and institutional account product channels, as applicable.

The Board noted that the Portfolio’s contractual advisory fee rate ranked in the first quartile, and that the actual advisory fee rate and total expense ratio each ranked in the first quartile, relative to the Portfolio’s Expense Peers. The Board also noted that the Portfolio has an advisory fee arrangement that includes breakpoints that adjust the fee rate downward as the size of the Portfolio increases above certain contractually specified levels. The Board further noted that BlackRock and its affiliates have contractually agreed to reimburse or otherwise compensate the Portfolio for the fees and expenses of the Independent Board Members, counsel to the Independent Board Members and the Portfolio’s independent registered public accounting firm. The Board additionally noted that BlackRock has voluntarily agreed to waive a portion of its administration and advisory fees payable by the Portfolio in an amount sufficient to maintain the advisory fee payable by each of the LifePath Master Portfolios at a specified annual rate.

D. Economies of Scale: The Board, including the Independent Board Members, considered the extent to which economies of scale might be realized as the assets of the Portfolio increase, as well as the existence of expense caps, as applicable. The Board also considered the extent to which the Portfolio benefits from such economies and whether there should be changes in the advisory fee rate or breakpoint structure in order to enable the Portfolio to participate in these economies of scale, for example through the use of revised breakpoints in the advisory fee based upon the asset level of the Portfolio. In their consideration, the Board Members took into account the existence of any expense caps and further considered the continuation and/or implementation, as applicable, of such caps.



ACTIVE STOCK MASTER PORTFOLIO	JUNE 30, 2015	19


Disclosure of Investment Advisory Agreement (concluded)

E. Other Factors Deemed Relevant by the Board Members: The Board, including the Independent Board Members, also took into account other ancillary or “fall-out” benefits that BlackRock or its affiliates may derive from their respective relationships with the Portfolio, both tangible and intangible, such as BlackRock’s ability to leverage its investment professionals who manage other portfolios and risk management personnel, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates as service providers to the Portfolio, including for administrative, distribution, securities lending and cash management services. The Board also considered BlackRock’s overall operations and its efforts to expand the scale of, and improve the quality of, its operations. The Board also noted that BlackRock may use and benefit from third party research obtained by soft dollars generated by certain registered fund transactions to assist in managing all or a number of its other client accounts. The Board further noted that it had considered the investment by BlackRock’s funds in affiliated ETFs without any offset against the management fees payable by the funds to BlackRock.

Conclusion

The Board, including the Independent Board Members, approved the continuation of the Agreement between the Manager and the Master Fund with respect to the Portfolio for a one-year term ending June 30, 2016. Based upon its evaluation of all of the aforementioned factors in their totality, the Board, including the Independent Board Members, was satisfied that the terms of the Agreement were fair and reasonable and in the best interest of the Portfolio and its interest holders. In arriving at its decision to approve the Agreement, the Board did not identify any single factor or group of factors as all-important or controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were also assisted by the advice of independent legal counsel in making this determination. The contractual fee arrangements for the Portfolio reflect the results of several years of review by the Board Members and predecessor Board Members, and discussions between such Board Members (and predecessor Board Members) and BlackRock. As a result, the Board Members’ conclusions may be based in part on their consideration of these arrangements in prior years.



20	ACTIVE STOCK MASTER PORTFOLIO	JUNE 30, 2015


Officers and Trustees

Rodney D. Johnson, Chair of the Board and Trustee

David O. Beim, Trustee

Collette Chilton, Trustee

Frank J. Fabozzi, Trustee

Dr. Matina S. Horner, Trustee

Herbert I. London, Trustee

Cynthia A. Montgomery, Trustee

Barbara G. Novick, Trustee

Joseph P. Platt, Trustee

Robert C. Robb, Jr., Trustee

Toby Rosenblatt, Trustee

Mark Stalnecker, Trustee

Kenneth L. Urish, Trustee

Frederick W. Winter, Trustee

John M. Perlowski, President and Chief Executive Officer

Richard Hoerner, CFA, Vice President

Jennifer McGovern, Vice President

Neal Andrews, Chief Financial Officer

Jay Fife, Treasurer

Charles Park, Chief Compliance Officer

Fernanda Piedra, Anti-Money Laundering Compliance Officer

Benjamin Archibald, Secretary

Effective March 1, 2015, Charles Park resigned as Anti-Money Laundering Compliance Officer of MIP and Fernanda Piedra became Anti-Money Laundering Compliance Officer of MIP.

Effective May 18, 2015, Ian MacKinnon resigned as a Trustee of MIP.



Investment Advisor BlackRockFund Advisors San Francisco, CA 94105	Custodian and Accounting Agent State Street Bank and Trust Company Boston, MA 02110	Legal Counsel Sidley Austin LLP New York, NY 10019

Administrator BlackRock Advisors, LLC Wilmington, DE 19809	Independent Registered Public Accounting Firm PricewaterhouseCoopers LLP Philadelphia, PA 19103	Address of MIP 400 Howard Street San Francisco, CA 94105



ACTIVE STOCK MASTER PORTFOLIO	JUNE 30, 2015	21


Additional Information

Availability of Quarterly Schedule of Investments

The Master Portfolio files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Master Portfolio’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The Master Portfolio’s Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762.

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the Master Portfolio uses to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling (800) 441-7762; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.

Availability of Proxy Voting Record

Information about how the Master Portfolio voted proxies relating to securities held in the Master Portfolio’s portfolio during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com; and (2) on the SEC’s website at http://www.sec.gov.



22	ACTIVE STOCK MASTER PORTFOLIO	JUNE 30, 2015


Portfolio Information as of June 30, 2015 (Unaudited)


Ten Largest Holdings		Percent of Long-Term Investments


Roche Holding AG	2	%
Novo Nordisk	2
HSBC Holdings PLC.	2
Murata Manufacturing Co., Ltd.	1
CK Hutchison Holdings, Ltd.	1
Iberdrola SA	1
Fresenius SE	1
Keyence Corp.	1
Tokio Marine Holdings, Inc.	1
Caltex Australia, Ltd.	1


Geographic Allocation		Percent of Long-Term Investments


Japan	24	%
United Kingdom	15
Germany	10
Australia	8
Switzerland	8
France	6
Spain	6
Hong Kong	4
Netherlands	3
Denmark	3
Norway	3
Sweden	3
Singapore	3
Italy	2
Other¹	2

Other includes a 1% or less investment in each of the following countries: Austria, Belgium, Finland, Ireland, Isle of Man, Israel, Luxembourg, New Zealand and Portugal.


Portfolio Information as of June 30, 2015

Derivative Financial Instruments



INTERNATIONAL TILTS MASTER PORTFOLIO	JUNE 30, 2015	1


Schedule of Investments June 30, 2015 (Unaudited)		(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Australia — 7.9%
Amcor Ltd.		6,463	$	68,298
Aristocrat Leisure Ltd.		338,065		1,993,531
Australia & New Zealand Banking Group Ltd.		308,404		7,653,711
BHP Billiton Ltd.		489,704		9,989,385
Caltex Australia Ltd.		581,748		14,280,819
Challenger Ltd.		7,934		41,127
Commonwealth Bank of Australia		104,576		6,857,771
CSL Ltd.		202,439		13,495,874
CSR Ltd.		231,802		650,211
Dexus Property Group		14,140		79,566
Federation Centres Ltd.		708,275		1,593,695
JB Hi-Fi Ltd. (a)		50,929		764,603
Macquarie Group Ltd.		60,670		3,801,303
Magellan Financial Group Ltd.		2,915		39,031
Mirvac Group		187,475		267,092
National Australia Bank Ltd.		123,255		3,165,690
Northern Star Resources Ltd.		57,590		98,661
Orora Ltd.		17,635		28,413
OZ Minerals, Ltd.		26,363		80,844
Qantas Airways Ltd. (b)		1,356,180		3,295,496
Ramsay Health Care Ltd. (a)		7,385		349,812
Santos Ltd. (a)		142,954		863,110
Slater & Gordon, Ltd.		7,833		21,371
Sonic Healthcare Ltd.		64,095		1,055,431
South32, Ltd. (b)		919,499		1,269,897
Spotless Group Holdings Ltd.		17,313		27,869
Stockland		181,011		571,582
Suncorp Group Ltd.		6,208		64,228
Sydney Airport (c)		1,258,123		4,827,647
Telstra Corp. Ltd.		2,320,743		10,983,027
Wesfarmers Ltd.		25,032		752,791
Westfield Corp.		168,886		1,186,210
Westpac Banking Corp.		321,165		7,946,268
Woodside Petroleum Ltd.		445,611		11,758,185

				109,922,549
Austria — 0.5%
ams AG		54,466		2,382,108
OMV AG (a)		30,784		847,474
Raiffeisen Bank International AG (a)		3,325		48,383
Schoeller-Bleckmann Oilfield Equipment AG (a)		20,255		1,228,544
Vienna Insurance Group AG		785		26,972
Voestalpine AG		51,140		2,131,379

				6,664,860
Belgium — 1.2%
Ageas		113,542		4,380,825
Belgacom SA		15,605		552,213
bpost SA		322,887		8,879,419
Delhaize Group		4,705		382,692
Groupe Bruxelles Lambert SA		8,416		678,638
Solvay SA		7,478		1,030,209
Umicore SA		6,374		302,679

				16,206,675
Denmark — 3.0%
A.P. Moeller — Maersk A/S, Class A		156		273,593
A.P. Moeller — Maersk A/S, Class B		3,760		6,798,232
Bavarian Nordic A/S (a)(b)		14,230		662,737
Carlsberg A/S, Class B		11,247		1,019,042
Coloplast A/S, Class B		17,895		1,173,611
Danske Bank A/S		24,512		720,579
GN Store Nord A/S		21,475		443,163
Denmark (concluded)
Jyske Bank A/S (b)		3,035	$	152,407
NKT Holding A/S		23,138		1,327,267
Novo Nordisk A/S, Class B		456,926		25,073,752
Novozymes A/S, Class B		1,660		78,868
Vestas Wind Systems A/S		87,459		4,359,263

				42,082,514
Finland — 0.1%
Fortum OYJ		15,573		276,653
Kesko OYJ, Class B		12,356		430,264
Neste Oil OYJ		7,944		202,652

				909,569
France — 6.2%
Alstom SA (b)		22,720		645,344
AtoS		12,074		902,209
AXA SA		163,163		4,136,481
BNP Paribas SA		125,022		7,586,675
Cie Generale des Etablissements Michelin		84,551		8,896,774
CNP Assurances		48,549		812,552
Credit Agricole SA		191,408		2,857,711
Danone SA		10,424		675,208
EDF		181,489		4,059,657
Essilor International SA		1,387		166,163
Euler Hermes SA		741		74,500
Faurecia		20,994		867,914
Fonciere Des Regions		926		78,784
Gecina SA		1,592		196,209
Hermes International		545		203,492
ICADE		8,240		589,396
Iliad SA		498		110,401
Imerys SA		591		45,337
Ingenico		353		41,530
Ipsen SA		1,224		67,845
Lagardere SCA		84,145		2,462,152
Metropole Television SA		187,115		3,644,091
Numericable-SFR (b)		1,720		91,169
Orange SA		38,144		589,491
Peugeot SA (b)		295,244		6,088,469
Plastic Omnium SA		11,479		293,657
Renault SA		17,410		1,825,392
Safran SA		93,928		6,383,287
Sanofi		34,634		3,426,336
SCOR SE		30,305		1,071,628
Societe Generale SA		67,781		3,180,540
Suez Environnement Co.		2,548		47,569
Technicolor SA, Registered Shares		174,814		1,143,327
Technip SA		42,734		2,648,402
Thales SA		112,351		6,788,354
Total SA		166,869		8,185,082
Valeo SA		30,806		4,872,984
Wendel SA		3,840		471,856

				86,227,968
Germany — 9.6%
Aareal Bank AG		48,524		1,907,913
Allianz SE, Registered Shares		91,197		14,222,264
BASF SE		72,987		6,422,339
Bayer AG, Registered Shares		34,496		4,830,822
Bayerische Motoren Werke AG, Preference Shares		607		51,396
Beiersdorf AG		8,615		721,853


Portfolio Abbreviations


FTSE		Financial Times Stock Exchange
REIT		Real Estate Investment Trust
USD		U.S. Dollar

See Notes to Financial Statements.



2	INTERNATIONAL TILTS MASTER PORTFOLIO	JUNE 30, 2015


Schedule of Investments (continued)		(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Germany (concluded)
Commerzbank AG (b)		506,166	$	6,470,625
Continental AG		43,153		10,217,652
Daimler AG, Registered Shares		3,979		362,469
Deutsche Annington Immobilien SE		148,547		4,191,694
Deutsche Post AG, Registered Shares		143,508		4,193,200
Deutsche Telekom AG, Registered Shares		328,801		5,668,624
Deutsche Wohnen AG, Bearer Shares		51,583		1,182,587
Dialog Semiconductor PLC (b)		5,713		308,929
Duerr AG		107,437		10,008,010
Evonik Industries AG		20,544		784,437
Fresenius SE & Co. KGaA		257,875		16,557,216
Gerresheimer AG		15,314		954,085
Henkel AG & Co. KGaA, Preference Shares		3,777		423,840
Hugo Boss AG		9,471		1,058,821
K+S AG, Registered Shares		80,823		3,408,129
KION Group AG (b)		5,432		260,590
Krones AG (a)		1,652		172,622
LEG Immobilien AG (b)		50,213		3,489,469
Merck KGaA		16,278		1,622,757
Metro AG		17,007		537,151
Muenchener Rueckversicherungs AG, Registered Shares		6,022		1,067,666
Nordex SE (b)		115,646		2,770,745
Porsche Automobil Holding SE, Preference Shares		16,099		1,357,411
ProSiebenSat.1 Media AG, Registered Shares		196,273		9,694,730
RWE AG		189,800		4,082,288
Salzgitter AG (a)		43,323		1,548,782
Symrise AG		60,305		3,745,246
Talanx AG (b)		17,889		549,073
TUI AG		86,932		1,406,583
United Internet AG, Registered Shares		59,724		2,654,435
Volkswagen AG		3,114		721,036
Volkswagen AG, Preference Shares		22,408		5,200,418

				134,827,907
Hong Kong — 3.7%
AIA Group Ltd.		103,000		673,482
BOC Hong Kong Holdings Ltd.		47,500		197,697
Cheung Kong Infrastructure Holdings Ltd.		13,000		100,911
Cheung Kong Property Holdings, Ltd. (b)		1,184,184		9,822,943
CK Hutchison Holdings Ltd.		1,178,684		17,328,984
CLP Holdings Ltd.		234,500		1,993,028
Galaxy Entertainment Group Ltd.		13,000		51,726
Guotai Junan International Holdings, Ltd. (a)		48,000		31,203
Haitong International Securities Group, Ltd.		46,000		41,455
Hang Lung Properties Ltd.		385,000		1,144,190
Henderson Land Development Co. Ltd.		97,900		669,238
HK Electric Investments & HK Electric Investments Ltd. (a)(c)(d)		550,500		376,396
Hong Kong Exchanges & Clearing Ltd.		83,500		2,942,084
Hongkong Land Holdings Ltd.		421,500		3,456,300
Jardine Matheson Holdings Ltd.		29,700		1,683,762
Kerry Properties Ltd.		149,500		586,011
MGM China Holdings Ltd.		122,400		199,863
New World Development Co. Ltd.		557,000		727,802
Orient Overseas International Ltd.		5,000		25,521
Power Assets Holdings Ltd.		511,500		4,663,550
Sands China Ltd.		589,200		1,980,183
SJM Holdings Ltd.		853,000		922,308
Sun Hung Kai Properties Ltd.		13,000		210,376
Swire Properties Ltd.		230,000		733,582
Techtronic Industries Co.		67,500		220,700
Wheelock & Co. Ltd.		284,000		1,449,156
Xinyi Glass Holdings Ltd.		48,000		25,484

				52,257,935
Ireland — 0.7%
Beazley PLC		6,341	$	29,471
DCC PLC		72,286		5,676,635
Glanbia PLC		5,079		99,740
Kerry Group PLC, Class A		2,287		169,651
Paddy Power PLC		342		29,309
Shire PLC		46,164		3,709,256

				9,714,062
Isle of Man — 0.0%
Playtech PLC		13,864		178,277
Israel — 0.0%
Azrieli Group		1,693		67,571
Osem Investments Ltd.		1,553		32,313

				99,884
Italy — 1.8%
Anima Holding SpA (d)		11,691		102,685
Assicurazioni Generali SpA		53,906		971,589
Atlantia SpA		1,499		37,037
Autogrill SpA (b)		10,802		90,489
Banca Popolare di Milano Scarl		176,659		186,310
Davide Campari-Milano SpA		4,235		32,239
Enel SpA		708,554		3,211,374
FinecoBank Banca Fineco SpA		25,945		192,171
Hera SpA		11,635		29,107
Intesa Sanpaolo SpA		1,478,938		5,370,738
Mediobanca SpA		477,472		4,681,446
Moncler SpA		82,191		1,522,995
Parmalat SpA		299,562		782,150
Prada SpA (a)		54,200		260,555
Recordati SpA		2,383		49,980
Saipem SpA (a)(b)		3,185		33,656
Telecom Italia SpA (b)		117,136		148,858
Tenaris SA		5,161		69,613
UniCredit SpA (a)		1,091,240		7,334,083

				25,107,075
Japan — 23.6%
ABC-Mart, Inc.		18,100		1,107,763
Ajinomoto Co., Inc.		81,000		1,751,646
Alps Electric Co. Ltd.		7,300		225,128
Asahi Group Holdings Ltd.		362,700		11,518,688
Asahi Kasei Corp.		235,000		1,927,607
Astellas Pharma, Inc.		847,600		12,074,773
Bridgestone Corp.		39,900		1,474,807
Calbee, Inc.		77,200		3,252,282
Casio Computer Co. Ltd. (a)		48,400		954,676
Chubu Electric Power Co., Inc.		40,800		608,089
The Chugoku Electric Power Co., Inc.		3,600		52,515
Citizen Holdings Co. Ltd.		23,800		166,047
COLOPL, Inc. (a)		4,900		99,012
COMSYS Holdings Corp.		131,200		1,951,649
The Dai-ichi Life Insurance Co. Ltd.		3,500		68,731
Daicel Corp.		221,800		2,846,179
Dainippon Screen Manufacturing Co. Ltd.		49,000		308,367
Daito Trust Construction Co. Ltd.		37,000		3,829,325
Denso Corp.		8,000		398,025
Disco Corp.		56,800		4,695,587
Dowa Holdings Co. Ltd.		146,000		1,379,734
East Japan Railway Co.		27,800		2,499,198
Electric Power Development Co. Ltd.		6,600		233,151
FANUC Corp.		42,800		8,757,547
Fast Retailing Co. Ltd.		200		90,694
Frontier Real Estate Investment Corp.		89		398,234
Fuji Electric Co. Ltd.		79,000		339,775
Fuji Heavy Industries Ltd.		330,600		12,156,421
FUJIFILM Holdings Corp.		21,400		763,724

See Notes to Financial Statements.



INTERNATIONAL TILTS MASTER PORTFOLIO	JUNE 30, 2015	3


Schedule of Investments (continued)		(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Japan (continued)
Fujitsu General Ltd.		256,000	$	3,280,376
Fujitsu Ltd.		49,000		273,780
GungHo Online Entertainment, Inc.		40,900		159,165
Hankyu Hanshin Holdings, Inc.		145,000		855,930
Haseko Corp.		351,900		4,145,063
Hazama Ando Corp.		130,300		705,452
Hitachi Capital Corp.		5,300		140,135
Hitachi Ltd.		133,000		876,143
Hitachi Metals Ltd.		32,000		491,950
Hoya Corp.		228,300		9,143,350
Hulic Co. Ltd.		26,900		238,392
Ichigo Group Holdings Co Ltd.		25,000		61,568
Iida Group Holdings Co. Ltd.		38,700		615,226
Isuzu Motors Ltd.		55,200		724,200
Japan Aviation Electronics Industry, Ltd.		6,000		163,111
Japan Hotel REIT Investment Corp.		72		47,913
Japan Petroleum Exploration Co.		48,700		1,548,661
Japan Real Estate Investment Corp.		176		798,736
Japan Tobacco, Inc.		385,600		13,707,799
Kaken Pharmaceutical Co. Ltd.		15,000		523,672
Kanamoto Co. Ltd.		2,000		50,702
The Kansai Electric Power Co., Inc. (b)		36,400		402,967
Kao Corp.		43,100		2,004,450
KDDI Corp.		247,900		5,982,310
Keyence Corp.		27,800		14,983,544
Kikkoman Corp.		142,000		4,433,752
Koito Manufacturing Co. Ltd.		20,900		813,787
Kose Corp.		600		49,346
KYB Co. Ltd.		130,000		450,172
Kyushu Electric Power Co., Inc. (b)		9,300		107,823
Lawson, Inc.		31,400		2,148,738
Lintec Corp.		56,900		1,301,029
Mazda Motor Corp.		212,800		4,164,237
Meiji Holdings Co. Ltd.		300		38,709
Minebea Co. Ltd.		15,000		247,625
Miraca Holdings, Inc.		3,000		149,893
Mitsubishi Chemical Holdings Corp.		37,500		235,749
Mitsubishi Corp.		76,200		1,675,181
Mitsubishi Electric Corp.		574,000		7,411,886
Mitsubishi Estate Co. Ltd.		25,000		538,452
Mitsubishi Gas Chemical Co., Inc.		57,000		319,157
Mitsubishi Motors Corp.		96,500		820,639
Mitsui & Co. Ltd.		21,500		292,102
Mixi, Inc.		4,200		208,374
Mizuho Financial Group, Inc.		5,562,700		12,036,195
MonotaRO Co. Ltd.		900		39,508
Murata Manufacturing Co. Ltd.		99,300		17,329,370
Nexon Co. Ltd.		202,900		2,793,424
NGK Spark Plug Co. Ltd.		11,600		321,252
NH Foods Ltd.		427,000		9,737,592
Nihon M&A Center, Inc.		3,300		136,041
Nippon Building Fund, Inc.		19		83,154
Nippon Kayaku Co. Ltd.		17,000		183,281
Nippon Steel & Sumitomo Metal		438,000		1,135,670
Nippon Telegraph & Telephone Corp.		290,500		10,520,672
Nishimatsu Construction Co. Ltd.		41,000		153,630
Nissan Chemical Industries Ltd.		79,800		1,760,940
Nissan Motor Co. Ltd.		987,000		10,311,137
Nissin Foods Holdings Co. Ltd.		10,200		446,895
NOK Corp.		2,200		68,164
Nomura Holdings, Inc.		123,100		831,152
Nomura Real Estate Holdings, Inc.		143,300		3,007,672
NSK Ltd.		23,000		354,642
NTT DoCoMo, Inc.		2,300		44,157
Obic Co. Ltd.		66,700		2,973,666
Oki Electric Industry Co. Ltd.		1,251,000		2,624,528
Omron Corp.		61,200		2,658,421
Japan (concluded)
Oriental Land Co. Ltd.		36,800	$	2,347,440
ORIX Corp.		416,900		6,190,745
OSG Corp.		30,900		662,367
Otsuka Holdings Co. Ltd.		48,500		1,545,365
Pigeon Corp.		6,600		207,853
Recruit Holdings Co. Ltd.		5,900		179,916
Resona Holdings, Inc.		741,100		4,042,053
Rohto Pharmaceutical Co. Ltd.		2,300		37,940
Sawai Pharmaceutical Co. Ltd.		4,000		232,800
Seiko Epson Corp.		14,600		258,718
Seiko Holdings Corp.		93,000		470,276
Sekisui Chemical Co. Ltd.		5,000		61,380
Senshu Ikeda Holdings, Inc.		102,500		464,706
Shimano, Inc.		15,200		2,074,198
Shin-Etsu Chemical Co. Ltd.		30,400		1,885,132
Shinsei Bank Ltd.		260,000		523,968
Shionogi & Co. Ltd.		135,300		5,243,310
SHO-BOND Holdings Co. Ltd.		2,200		91,826
Skylark Co., Ltd.		5,100		67,183
Softbank Corp.		87,700		5,165,792
Sotetsu Holdings, Inc.		14,000		72,930
Start Today Co. Ltd.		2,900		81,103
Sumitomo Chemical Co. Ltd.		15,000		90,126
Sumitomo Dainippon Pharma Co. Ltd. (a)		46,400		511,342
Sumitomo Electric Industries Ltd.		56,400		872,922
Sumitomo Metal Mining Co. Ltd.		52,000		790,866
Sumitomo Mitsui Trust Holdings, Inc. (a)		2,380,000		10,887,545
Tadano Ltd.		369,000		5,511,331
Taiheiyo Cement Corp.		511,000		1,494,359
Taiyo Yuden Co. Ltd.		3,700		51,864
Takata Corp. (a)(b)		20,600		224,210
Temp Holdings Co. Ltd.		1,400		50,524
Toho Co. Ltd.		2,400		59,676
Tohoku Electric Power Co., Inc.		15,600		211,216
Tokio Marine Holdings, Inc.		357,100		14,851,459
The Tokyo Electric Power Co., Inc. (b)		151,000		822,633
Tokyo Gas Co. Ltd.		74,000		392,842
Tokyo Steel Manufacturing Co. Ltd.		214,400		1,577,263
Topcon Corp.		5,300		127,702
Toshiba Corp.		769,000		2,637,129
Tosoh Corp.		219,000		1,360,775
Toyota Motor Corp.		102,800		6,879,095
Trend Micro, Inc.		48,500		1,659,024
TS Tech Co. Ltd.		37,300		997,393
Tsuruha Holdings, Inc.		900		70,007
Unicharm Corp.		11,200		266,051
United Arrows Ltd.		5,400		169,200
West Japan Railway Co.		26,700		1,708,241
Yakult Honsha Co. Ltd.		2,400		142,151
Yaskawa Electric Corp.		4,600		58,836
Zeon Corp.		210,000		1,936,772

				331,131,338
Luxembourg — 0.0%
Altice SA (b)		4,628		637,459
Netherlands — 3.3%
Akzo Nobel NV		426		31,102
ASM International NV		61,918		2,864,412
Eurocommercial Properties NV CVA		17,694		740,754
Euronext NV (d)		10,264		404,541
GrandVision NV (b)(d)		11,366		280,798
Heineken Holding NV		10,535		738,392
Heineken NV		41,103		3,124,953
ING Groep NV CVA		557,503		9,257,540
Koninklijke Ahold NV		206,378		3,874,261
Koninklijke Philips Electronics NV		3,625		92,519
NN Group NV		57,904		1,630,707

See Notes to Financial Statements.



4	INTERNATIONAL TILTS MASTER PORTFOLIO	JUNE 30, 2015


Schedule of Investments (continued)		(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
Netherlands (concluded)
Reed Elsevier NV		68,723	$	1,634,624
Royal Dutch Shell PLC, A Shares		191,049		5,433,407
Royal Dutch Shell PLC, Class A		304,793		8,617,761
Royal Dutch Shell PLC, Class B		243,896		6,943,843
Unilever NV CVA		26,096		1,091,051

				46,760,665
New Zealand — 0.0%
Auckland International Airport Ltd.		12,753		42,683
Contact Energy Ltd.		10,113		34,334
Kiwi Property Group Ltd.		35,696		31,065
Vector Ltd.		27,948		62,309

				170,391
Norway — 2.8%
Aker Solutions ASA		32,730		183,548
BW LPG Ltd. (d)		24,239		207,256
DnB NOR ASA		44,620		743,084
DNO ASA (a)(b)		235,564		310,836
Fred Olsen Energy ASA (a)(b)		21		146
Marine Harvest ASA		50,943		583,429
Norsk Hydro ASA		2,558,604		10,738,276
Orkla ASA		542,936		4,259,933
Seadrill Ltd. (a)		187,954		1,952,007
Statoil ASA		359,486		6,428,691
Subsea 7 SA (b)		57,170		559,197
Telenor ASA		77,836		1,706,542
Yara International ASA		227,448		11,851,888

				39,524,833
Portugal — 0.1%
CTT — Correios de Portugal SA		71,964		742,805
Singapore — 2.5%
CapitaCommercial Trust		2,383,000		2,758,036
CapitaLand Ltd. (a)		528,300		1,371,871
City Developments Ltd.		340,700		2,472,302
ComfortDelGro Corp. Ltd.		2,466,600		5,728,305
DBS Group Holdings Ltd.		179,000		2,746,512
Ezion Holdings Ltd. (a)		589,000		447,602
Keppel Corp. Ltd.		125,200		763,109
Noble Group Ltd.		44		25
Oversea-Chinese Banking Corp. Ltd.		389,300		2,939,978
Singapore Airlines Ltd.		249,100		1,983,339
Singapore Telecommunications Ltd.		1,988,700		6,206,169
United Overseas Bank Ltd.		132,600		2,268,649
Wilmar International Ltd.		65,100		158,446
Yangzijiang Shipbuilding Holdings Ltd. (a)		4,950,600		5,199,690

				35,044,033
Spain — 5.7%
Abengoa SA, B Shares (a)		77,768		245,238
Acciona SA (b)		376		28,473
ACS Actividades de Construccion y Servicios SA (a)		122,232		3,942,708
Aena SA (b)(d)		23,764		2,478,998
Amadeus IT Holding SA, Class A (a)		315,677		12,601,889
Banco Popular Espanol SA (a)		241,810		1,176,555
Bankinter SA		152,678		1,132,398
CaixaBank SA (a)		1,047,095		4,872,444
Ebro Foods SA		9,205		178,340
EDP Renovaveis SA		12,578		89,470
Ferrovial SA		15,049		326,961
Gamesa Corp. Tecnologica SA (b)		423,160		6,684,956
Gas Natural SDG SA		1,502		34,106
Grifols SA (a)		83,304		3,363,968
Iberdrola SA		2,522,761		17,032,525
Inditex SA		17,105		557,919
Inmobiliaria Colonial SA (b)		87,924		62,020
Mediaset Espana Comunicacion SA		118,157		1,551,248
Spain (concluded)
Repsol SA (a)		432,972	$	7,631,400
Sacyr SA (b)		202,056		769,129
Tecnicas Reunidas SA		31,919		1,644,522
Telefonica SA		901,498		12,842,190
Viscofan SA		2,000		120,989

				79,368,446
Sweden — 2.6%
Castellum AB		25,893		363,894
Hemfosa Fastigheter AB		4,692		47,805
Hennes & Mauritz AB, Class B		224,025		8,622,433
Intrum Justitia AB		352,035		10,660,703
Investment AB Kinnevik, Class B		24,730		782,206
Investor AB, Class B		47,066		1,754,888
Peab AB		61,821		456,709
Skandinaviska Enskilda Banken AB, Class A		940,686		12,032,632
Swedish Match AB		69,547		1,977,265
Trelleborg AB, B Shares		3,886		71,863

				36,770,398
Switzerland — 7.4%
Actelion Ltd., Registered Shares (b)		10,638		1,557,950
Aryzta AG (b)		30,951		1,522,892
Baloise Holding AG, Registered Shares		65,718		8,013,048
BB Biotech AG, Registered Shares (b)		3,420		1,014,853
Cie Financiere Richemont SA, Registered Shares		63,562		5,166,180
EMS-Chemie Holding AG, Registered Shares		2,196		927,798
Flughafen Zuerich AG, Registered Shares		2,320		1,795,928
Geberit AG, Registered Shares		14,738		4,913,568
Georg Fischer AG, Registered Shares		1,982		1,362,546
Glencore PLC (a)(b)		178,289		714,975
Lonza Group AG, Registered Shares (b)		2,422		323,737
Nestle SA, Registered Shares		147,420		10,636,442
Novartis AG, Registered Shares		127,635		12,554,236
Partners Group Holding AG		1,766		527,835
Roche Holding AG		91,856		25,755,634
Swiss Life Holding AG, Registered Shares (b)		56,102		12,846,271
Swiss Prime Site AG, Registered Shares (b)		5,169		392,257
Swiss Re AG		122,966		10,885,285
Swisscom AG, Registered Shares		1,312		735,306
Syngenta AG, Registered Shares		2,973		1,213,049
Zurich Insurance Group AG (b)		1,998		608,250

				103,468,040
United Kingdom — 14.5%
Anglo American PLC		56,096		810,387
ARM Holdings PLC		5,986		97,954
AstraZeneca PLC		130,838		8,280,768
Aviva PLC		64,977		503,271
Babcock International Group PLC		259,656		4,399,204
Barclays PLC		653,924		2,680,204
Berkeley Group Holdings PLC		1,240		65,161
Betfair Group PLC		752		28,436
BG Group PLC		139,852		2,329,207
BHP Billiton PLC		226,017		4,443,871
BP PLC		1,192,085		7,911,479
British American Tobacco PLC		55,371		2,981,313
Britvic PLC		580,845		6,544,196
BT Group PLC		1,914,770		13,559,141
BTG PLC (b)		20,211		199,295
Burberry Group PLC		48,468		1,195,723
Capita PLC		92,031		1,788,219
Centrica PLC		1,115,997		4,630,806
Close Brothers Group PLC		68,003		1,631,656
Derwent London PLC		9,550		510,117
Diageo PLC		166,267		4,815,055
Direct Line Insurance Group PLC		4,975		26,248
Dixons Carphone PLC		199,715		1,420,153

See Notes to Financial Statements.



INTERNATIONAL TILTS MASTER PORTFOLIO	JUNE 30, 2015	5


Schedule of Investments (continued)		(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value
United Kingdom (continued)
easyJet PLC		116,611	$	2,834,642
Fiat Chrysler Automobiles NV (b)		513,208		7,528,835
GlaxoSmithKline PLC		150,552		3,130,267
Hammerson PLC		104,443		1,009,369
Henderson Group PLC		29,181		119,293
Hikma Pharmaceuticals PLC		101,673		3,088,385
Howden Joinery Group PLC		328,329		2,664,971
HSBC Holdings PLC		2,280,619		20,421,591
IG Group Holdings PLC		24,327		285,147
Imperial Tobacco Group PLC		53,599		2,581,445
Inchcape PLC		107,086		1,363,151
Indivior PLC (b)		42,793		151,152
Intermediate Capital Group PLC		58,870		508,562
ITV PLC		2,814,547		11,645,007
J. Sainsbury PLC (a)		956,108		3,980,016
Land Securities Group PLC		7,694		145,486
Legal & General Group PLC		539,133		2,108,043
Lloyds Banking Group PLC		10,260,009		13,770,962
Man Group PLC		36,210		89,245
Mondi PLC		17,161		369,464
National Grid PLC		22,404		288,358
Old Mutual PLC		25,164		79,653
Ophir Energy PLC (b)		14,845		26,436
Paragon Group of Cos. PLC		190,239		1,237,035
Phoenix Group Holdings		2,756		35,520
Polyus Gold International Ltd. (a)		42,089		116,237
Provident Financial PLC		33,347		1,533,158
Prudential PLC		33,616		810,130
Qinetiq Group PLC		182,018		640,862
Reckitt Benckiser Group PLC		7,283		628,044
Rightmove PLC		27,423		1,411,004
Rio Tinto PLC		106,187		4,367,787
SABMiller PLC		49,133		2,547,566
Schroders PLC		38,781		1,935,046
Segro PLC		62,668		399,283
Severn Trent PLC		43,847		1,432,760
Sky PLC		713,132		11,615,235
Spirax-Sarco Engineering PLC		20,486		1,092,628
United Kingdom (concluded)
SSE PLC		436,372	$	10,531,576
Standard Chartered PLC		160,697		2,573,466
Standard Life PLC		158,069		1,102,221
Tate & Lyle PLC		319,209		2,605,589
Thomas Cook Group PLC (b)		383,532		824,404
Tullow Oil PLC		10,181		54,410
Unilever PLC		28,418		1,220,244
United Utilities Group PLC		7,361		103,101
Vedanta Resources PLC		77,997		636,985
Vodafone Group PLC		1,269,615		4,631,419

				203,127,054

Total Common Stocks — 97.2%				1,360,944,737



Rights
Spain — 0.0%
Repsol SA (Expires 07/16/15) (a)(b)		438,285		227,209
Sacyr SA (Expires 07/14/15) (b)		202,056		22,977

Total Rights — 0.0%				250,186
Total Long-Term Investments (Cost — $1,329,284,741) — 97.2%				1,361,194,923



Short-Term Securities — 4.4%
BlackRock Cash Funds: Institutional, SL Agency Shares, 0.17% (e)(f)		15,061,430		15,061,430
BlackRock Cash Funds: Prime, SL Agency Shares, 0.13% (e)(f)(g)		46,466,754		46,466,754
Total Short-Term Securities (Cost — $61,528,184) — 4.4%				61,528,184
Total Investments (Cost — $1,390,812,925) — 101.6%				1,422,723,107
Liabilities in Excess of Other Assets — (1.6)%				(21,982,977	)

Net Assets — 100.0%			$	1,400,740,130

Notes to Schedule of Investments

(a)

Security, or a portion of security, is on loan.

(b)

Non-income producing security.

(c)

A security contractually bound to one or more other securities to form a single saleable unit which cannot be sold separately.

(d)

(e)


Affiliate	Shares Held at December 31, 2014		Net Activity		Shares Held at June 30, 2015		Net Income
BlackRock Cash Funds: Institutional, SL Agency Shares		5,215,771		9,845,659		15,061,430	$	9,268
BlackRock Cash Funds: Prime, SL Agency Shares		3,749,270		42,717,484		46,466,754	$	316,431	¹
¹ Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees, and other payments to and from borrowers of securities, and less the collateral investment expenses.

(f)

Represents the current yield as of report date.

(g)

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

See Notes to Financial Statements.



6	INTERNATIONAL TILTS MASTER PORTFOLIO	JUNE 30, 2015


Schedule of Investments (continued)

•

As of June 30, 2015, financial futures contracts outstanding were as follows:


Contracts Long		Issue	Exchange	Expiration	Notional Value			Unrealized Appreciation (Depreciation)
	408	Euro Stoxx 50 Index	Eurex Mercantile	September 2015		USD	15,628,942	$	73,492
	86	FTSE 100 Index	Euronext Life	September 2015		USD	8,775,179		(221,999	)
	33	SPI 200 Index	Australian Securities Exchange	September 2015		USD	3,435,347		(59,575	)
	106	Yen Denom Nikkei Index	Chicago Mercantile	September 2015		USD	8,752,135		(173,528	)
	Total							$	(381,610	)

•

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that the Master Portfolio has the ability to access

•

As of June 30, 2015, the following tables summarize the Master Portfolio’s investments and derivative financial instruments categorized in the disclosure hierarchy:


	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Common Stocks:
Australia	$	1,269,897	$	108,652,652		—	$	109,922,549
Austria		—		6,664,860		—		6,664,860
Belgium		—		16,206,675		—		16,206,675
Denmark		—		42,082,514		—		42,082,514
Finland		—		909,569		—		909,569
France		397,779		85,830,189		—		86,227,968
Germany		—		134,827,907		—		134,827,907
Hong Kong		13,655,639		38,602,296		—		52,257,935
Ireland		29,309		9,684,753		—		9,714,062
Isle of Man		—		178,277		—		178,277
Israel		—		99,884		—		99,884
Italy		782,150		24,324,925		—		25,107,075
Japan		—		331,131,338		—		331,131,338
Luxembourg		637,459		—		—		637,459
Netherlands		280,798		46,479,867		—		46,760,665
New Zealand		96,643		73,748		—		170,391
Norway		—		39,524,833		—		39,524,833
Portugal		—		742,805		—		742,805
Singapore		—		35,044,033		—		35,044,033
Spain		—		79,368,446		—		79,368,446
Sweden		—		36,770,398		—		36,770,398
Switzerland		392,257		103,075,783		—		103,468,040
United Kingdom		13,314,565		189,812,489		—		203,127,054
Rights		250,186		—		—		250,186
Short-Term Securities		61,528,184		—		—		61,528,184

Total	$	92,634,866	$	1,330,088,241		—	$	1,422,723,107

See Notes to Financial Statements.



INTERNATIONAL TILTS MASTER PORTFOLIO	JUNE 30, 2015	7


Schedule of Investments (concluded)


	Level 1			Level 2		Level 3		Total
Derivative Financial Instruments¹
Assets:
Equity contracts	$	73,492			—		—	$	73,492
Liabilities:
Equity contracts		(455,102	)		—		—		(455,102	)

Total	$	(381,610	)		—		—	$	(381,610	)

¹ Derivative financial instruments are financial futures contracts, which are valued at the unrealized appreciation/depreciation on the instrument.


	Level 1		Level 2			Level 3	Total
Assets:
Cash pledged for financial futures contracts	$	2,062,150		—		—	$	2,062,150
Foreign currency at value		25,797,366		—		—		25,797,366
Liabilities:
Collateral on securities loaned at value		—	$	(46,466,754	)	—		(46,466,754	)

Total	$	27,859,516	$	(46,466,754	)	—	$	(18,607,238	)

Transfers between Level 1 and Level 2 were as follows:


	Transfers into Level 1¹		Transfers out of Level 1²			Transfers into Level 2²		Transfers out of Level 2¹
Assets:
Investments:
Common Stocks:
Hong Kong	$	140,882		—			—	$	(140,882	)
Israel		—	$	(84,437	)	$	84,437		—
New Zealand		110,987		(34,527	)		34,527		(110,987	)
United Kingdom		15,748,904		(1,379,494	)		1,379,494		(15,748,904	)

Total	$	16,000,773	$	(1,498,458	)	$	1,498,458	$	(16,000,773	)

¹ Systematic Fair Value Prices were not utilized at period end for these investments.
² External pricing service used to reflect any significant market movements between the time the Master Portfolio valued such foreign securities and the earlier closing of foreign markets.

See Notes to Financial Statements.



8	INTERNATIONAL TILTS MASTER PORTFOLIO	JUNE 30, 2015


Statement of Assets and Liabilities


June 30, 2015 (Unaudited)

Assets
Investments at value — unaffiliated (including securities loaned at value of $43,084,592) (cost — $1,329,284,741)	$	1,361,194,923
Investments at value — affiliated (cost — $61,528,184)		61,528,184
Foreign currency at value (cost — $25,730,311)		25,797,366
Cash pledged for financial futures contracts		2,062,150
Receivables:
Investments sold		32,383,135
Dividends		2,242,338
Securities lending income — affiliated		22,499
Variation margin receivable on financial futures contracts		80,042

Total assets		1,485,310,637


Liabilities
Collateral on securities loaned at value		46,466,754
Payables:
Withdrawals to investors		22,528,158
Investments purchased		14,780,912
Investment advisory fees		459,514
Administration fees		59,309
Trustees’ fees		3,707
Variation margin payable on financial futures contracts		249,356
Other accrued expenses payable		22,797

Total liabilities		84,570,507

Net Assets	$	1,400,740,130


Net Assets Consist of
Investors’ capital	$	1,369,128,644
Net unrealized appreciation (depreciation)		31,611,486

Net Assets	$	1,400,740,130


Statement of Operations


Six Months Ended June 30, 2015 (Unaudited)

Investment Income
Dividends	$	29,206,354
Securities lending — affiliated — net		316,431
Income — affiliated		9,268
Foreign taxes withheld		(3,763,235	)

Total income		25,768,818


Expenses
Investment advisory		2,686,802
Administration		340,477
Professional		21,891
Trustees		18,750

Total expenses		3,067,920
Less fees waived by Manager		(44,408	)

Total expenses after fees waived		3,023,512

Net investment income		22,745,306


Realized and Unrealized Gain (Loss)
Net realized gain (loss) from:
Investments		(2,316,102	)
Financial futures contracts		3,477,720
Foreign currency transactions		(2,799,080	)

		(1,637,462	)

Net change in unrealized appreciation (depreciation) on:
Investments		86,875,309
Financial futures contracts		(753,598	)
Foreign currency translations		1,649,226

		87,770,937

Net realized and unrealized gain		86,133,475

Net Increase in Net Assets Resulting from Operations	$	108,878,781


Statements of Changes in Net Assets


Increase (Decrease) in Net Assets:	Six Months Ended June 30, 2015 (Unaudited)			Year Ended December 31, 2014

Operations
Net investment income	$	22,745,306		$	28,896,622
Net realized loss		(1,637,462	)		(16,672,273	)
Net change in unrealized appreciation (depreciation)		87,770,937			(62,457,072	)

Net increase (decrease) in net assets resulting from operations		108,878,781			(50,232,723	)


Capital Transactions
Proceeds from contributions		150,937,999			1,877,904,975
Value of withdrawals		(108,870,799	)		(1,130,695,994	)

Net increase in net assets from capital transactions		42,067,200			747,208,981


Net Assets
Total increase in net assets		150,945,981			696,976,258
Beginning of period		1,249,794,149			552,817,891

End of period	$	1,400,740,130		$	1,249,794,149


Financial Highlights

Six Months Ended
June 30,
2015
(Unaudited)

Year Ended
December 31,
2014

Period
October 31,
2013¹ to
December 31,
2013

Total Return

Total Return

8.50%²

(3.94)%

1.60%²

Ratios to Average Net Assets

Total expenses

0.45%³

0.46%

0.53%³

Total expenses after fees waived

0.44%³

0.45%

0.45%³

Net investment income

3.34%³

2.84%

1.17%³

Supplemental Data

Net assets, end of period (000)

$1,400,740

$1,249,794

$552,818

Portfolio turnover rate

49%

120%

15%

Commencement of operations.

Aggregate total return.

Annualized.


Notes to Financial Statements (Unaudited)

1. Organization:

International Tilts Master Portfolio (the “Master Portfolio”) is a series of Master Investment Portfolio (“MIP”), which is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a diversified, open-end management investment company. MIP is organized as a Delaware statutory trust.

2. Significant Accounting Policies:



INTERNATIONAL TILTS MASTER PORTFOLIO	JUNE 30, 2015	13


Notes to Financial Statements (continued)

component of net realized and unrealized gain (loss) from investments. The Master Portfolio 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 federal income tax purposes.

Segregation and Collateralization: In cases where the Master Portfolio enters into certain investments (e.g., financial futures contracts), that would be “senior securities” for 1940 Act purposes, the Master Portfolio may segregate or designate on its books and records cash or liquid securities having a market value at least equal to the amount of the Master Portfolio’s future obligations under such investments. Doing so allows the investment to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Master Portfolio may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments or obligations.

3. Securities and Other Investments:

As of June 30, 2015, the following table is a summary of the Master Portfolio’s securities lending agreements by counterparty, which are subject to offset under an MSLA:


Counterparty	Securities Loaned at Value		Cash Collateral Received¹			Net Amount
Credit Suisse Securities (USA) LLC	$	4,527,749	$	(4,527,749	)		—
Deutsche Bank Securities, Inc.		1,126,681		(1,126,681	)
Goldman Sachs & Co.		28,300,908		(28,300,908	)		—
Jefferies & Co., LLC		1,628,557		(1,628,557	)
JP Morgan Clearing Corp.		927,110		(927,110	)		—
Merrill Lynch, Pierce, Fenner & Smith, Inc.		2,589,252		(2,589,252	)		—
Morgan Stanley & Co. LLC		3,984,335		(3,984,335	)		—

Total	$	43,084,592	$	(43,084,592	)		—

Collateral with a value of $46,466,754 has been received in connection with securities lending agreements. Excess of collateral received from the individual counterparty is not shown for financial reporting purposes.



14	INTERNATIONAL TILTS MASTER PORTFOLIO	JUNE 30, 2015


Notes to Financial Statements (continued)

4. Derivative Financial Instruments:

The Master Portfolio engages in various portfolio investment strategies using derivative contracts both to increase the returns of the Master Portfolio and/or to manage economically its exposure to certain risks such as equity risk. These contracts may be transacted on an exchange or OTC.

Financial Futures Contracts: The Master Portfolio invests in long and/or short positions in financial futures contracts and options on financial futures contracts to gain exposure to, or economically hedge against, changes in the value of equity securities (equity risk). Financial futures contracts are agreements between the Master Portfolio and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and at a specified date. Depending on the terms of the particular contract, financial futures contracts are settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date.

The following is a summary of the Master Portfolio’s derivative financial instruments categorized by risk exposure:


Fair Values of Derivative Financial Instruments as of June 30, 2015
		Value
	Statement of Assets and Liabilities Location	Derivative Assets		Derivative Liabilities
Equity contracts	Net unrealized appreciation (depreciation)¹	$	73,492	$	(455,102	)

¹Includes cumulative appreciation (depreciation) on financial futures contracts, if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.


The Effect of Derivative Financial Instruments in the Statement of Operations for the year ended June 30, 2015
	Net Realized Gain From		Net Change in Unrealized Appreciation (Depreciation) on
Foreign currency exchange contracts:
Foreign currency transactions/translations	$	6,999		—
Equity contracts:
Financial futures contracts		3,477,720	$	(753,598	)

Total	$	3,484,719	$	(753,598	)

For the six months ended June 30, 2015, the average quarterly balances of outstanding derivative financial instruments were as follows:


Financial futures contracts:
Average notional value of contracts purchased	$	39,665,868
Foreign currency exchange contracts:
Average USD amounts sold	$	37,018

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



INTERNATIONAL TILTS MASTER PORTFOLIO	JUNE 30, 2015	15


Notes to Financial Statements (continued)

5. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock for 1940 Act purposes.

MIP, on behalf of the Master Portfolio, entered into an Investment Advisory Agreement with the Manager, the Master Portfolio’s investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory services. The Manager is responsible for the management of the Master Portfolio’s portfolio and provides the necessary personnel, facilities, equipment and certain other services to the operations of the Master Portfolio. For such services, the Master Portfolio pays the Manager a monthly fee based on a percentage of the Master Portfolio’s average daily net assets at the following annual rates:


Average Daily Net Assets	Investment Advisory Fee
First $1 Billion		0.40%
$1 Billion — $3 Billion		0.38%
$3 Billion — $5 Billion		0.36%
$5 Billion — $10 Billion		0.35%
Greater than $10 Billion		0.34%

The Manager entered into a sub-advisory agreement with BlackRock Fund Advisors (“BFA”), an affiliate of the Manager. The Manager pays BFA, for services it provides, a monthly fee that is a percentage of the investment advisory fees paid by the Master Portfolio to the Manager.

MIP, on behalf of the Master Portfolio, entered into an Administration Agreement with the Manager, which has agreed to provide general administration services (other than investment advice and related portfolio activities). The Manager, in consideration thereof, has agreed to bear all of the Master Portfolio’s ordinary operating expenses, excluding, generally, investment advisory fees, distribution fees, brokerage and other expenses related to the execution of portfolio transactions, extraordinary expenses and certain other expenses which are borne by the Master Portfolio. The Manager is entitled to receive for these administration services an annual fee of 0.05% based on the average daily net assets of the Master Portfolio.

From time to time, the Manager may waive such fees in whole or in part. Any such waiver will reduce the expenses of the Master Portfolio and, accordingly, have a favorable impact on its performance. The Manager may delegate certain of its administration duties to sub-administrators.

The fees and expenses of the Master Portfolio’s trustees who are not “interested persons” of MIP, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and MIP’s independent registered public accounting firm (together, the “independent expenses”) are paid directly by the Master Portfolio. The Manager has contractually agreed to provide an offsetting credit against the administration fees paid by the Master Portfolio in an amount equal to the independent expenses through April 30, 2017. The amount of the waiver, if any, is included in fees waived by Manager in the Statement of Operations. For the six months ended June 30, 2015, the Manager waived $40,640 pursuant to this agreement.

The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the Master Portfolio pays to the Manager indirectly through its investment in affiliated money market funds. This amount is included in fees waived by the Manager in the Statement of Operations. However, the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid in connection with the Master Portfolio’s investments in other affiliated investment companies, if any. For the six months ended June 30, 2015, the amount waived was $3,768.

Pursuant to such agreement, the Master Portfolio retains 80% of securities lending income, and this amount can never be less than 70% of the total securities lending income plus the collateral investment fees. In addition, commencing the business day following the date that the aggregate securities lending



16	INTERNATIONAL TILTS MASTER PORTFOLIO	JUNE 30, 2015


Notes to Financial Statements (continued)

income earned across certain funds in the Equity-Liquidity Complex in a calendar year exceeds a specified threshold, the Master Portfolio, pursuant to the securities lending agreement, will retain for the remainder of the calendar year securities lending income in an amount equal to 85% of securities lending income, and this amount can never be less than 70% of the total securities lending income plus the collateral investment fees.

The share of securities lending income earned by the Master Portfolio is shown as securities lending — affiliated — net in the Statement of Operations. For the six months ended June 30, 2015, the Fund paid BTC $78,915 securities lending agent services.

Certain officers and/or trustees of MIP are officers and/or directors of BlackRock or its affiliates.

6. Purchases and Sales:

For the six months ended June 30, 2015, purchases and sales of investments excluding short-term securities, were $708,338,596 and $643,426,961, respectively.

7. Income Tax Information:

The Master Portfolio 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 Master Portfolio’s U.S. federal tax returns remains open for the fiscal year ended December 31, 2014 and the period ended December 31, 2013. The statutes of limitations on the Master Portfolio’s state and local tax returns may remain open for an additional year depending upon the

jurisdiction.

As of June 30, 2015, gross unrealized appreciation (depreciation) based on cost for federal income tax purposes were as follows:


Tax cost	$	1,400,315,582

Gross unrealized appreciation	$	95,367,520
Gross unrealized depreciation		(72,959,995	)

Net unrealized appreciation	$	22,407,525

8. Bank Borrowings:

MIP, on behalf of the Master Portfolio, along with certain other funds managed by the Manager and its affiliates (“Participating Funds”), is a party to a 364-day, $2.1 billion credit agreement with a group of lenders, under which the Master Portfolio may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Master Portfolio, can borrow up to an aggregate commitment amount of $1.6 billion, subject to asset coverage and other limitations as specified in the agreement. The credit agreement has the following terms: a fee of 0.06% 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 2016 unless extended or renewed. Participating Funds paid administration, legal and arrangement fees and along with commitment 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 June 30, 2015, the Master Portfolio did not borrow under the credit agreement.

9. Principal Risks:



INTERNATIONAL TILTS MASTER PORTFOLIO	JUNE 30, 2015	17


Notes to Financial Statements (concluded)

the Master Portfolio’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Statement of Assets and Liabilities, less any collateral held by the Master Portfolio.

As of June 30, 2015, the Master Portfolio’s investments had the following industry classifications:


Industry	Percent of Long-Term Investments
Banks		12	%
Pharmaceuticals		8
Oil, Gas & Consumable Fuels		6
Insurance		6
Diversified Telecommunication Services		5
Other¹		63

All other industries held were less than 5% of long-term investments.

10. Subsequent Events:



18	INTERNATIONAL TILTS MASTER PORTFOLIO	JUNE 30, 2015


Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement

The Board of Trustees (the “Board,” and the members of which are referred to as “Board Members”) of Master Investment Portfolio (the “Master Fund”) met in person on April 21, 2015 (the “April Meeting”) and May 18-20, 2015 (the “May Meeting”) to consider the approval of the investment advisory agreement (the “Advisory Agreement”) between the Master Fund, on behalf of International Tilts Master Portfolio (the “Master Portfolio”), a series of the Master Fund, and BlackRock Advisors, LLC (the “Manager”), the Master Fund’s investment advisor. The Board also considered the approval of the sub-advisory agreement (the “Sub-Advisory Agreement”) between the Manager and BlackRock Fund Advisors (the “Sub-Advisor”) with respect to the Master Portfolio. The Manager and the Sub-Advisor are referred to herein as “BlackRock.” The Advisory Agreement and the Sub-Advisory Agreement are referred to herein as the “Agreements.”

Activities and Composition of the Board

The Agreements

Pursuant to the 1940 Act, the Board is required to consider the continuation of the Agreements on an annual basis. The Board has four quarterly meetings per year, each extending over two days, a fifth one-day meeting to consider specific information surrounding the consideration of renewing the Agreements, and additional in-person and telephonic meetings as needed. In connection with this year-long deliberative process, the Board assessed, among other things, the nature, extent and quality of the services provided to the Master Portfolio by BlackRock, BlackRock’s personnel and affiliates, including (as applicable) investment management services; administrative and shareholder services; the oversight of fund service providers; marketing services; risk oversight; compliance; and ability to meet applicable legal and regulatory requirements.

The Board, acting directly and through its committees, considers at each of its meetings, and from time to time as appropriate, factors that are relevant to its annual consideration of the renewal of the Agreements, including the services and support provided by BlackRock to the Master Portfolio and its interest holders. Among the matters the Board considered were: (a) investment performance for one-year, three-year, five-year and/or since inception periods, as applicable, against peer funds, applicable benchmark, and performance metrics, as applicable, as well as senior management’s and portfolio managers’ analysis of the reasons for any over performance or underperformance relative to its peers, benchmark, and other performance metrics, as applicable; (b) fees, including advisory, administration, if applicable, and other amounts paid to BlackRock and its affiliates by the Master Portfolio for services, such as marketing and distribution, call center and fund accounting; (c) Master Portfolio operating expenses and how BlackRock allocates expenses to the Master Portfolio; (d) the resources devoted to, risk oversight of, and compliance reports relating to, implementation of the Master Portfolio’s investment objective(s), policies and restrictions, and meeting new regulatory requirements; (e) the Master Fund’s compliance with its compliance policies and procedures; (f) the nature, cost and character of non-investment management services provided by BlackRock and its affiliates; (g) BlackRock’s and other service providers’ internal controls and risk and compliance oversight mechanisms; (h) BlackRock’s implementation of the proxy voting policies approved by the Board; (i) the use of brokerage commissions and execution quality of portfolio transactions; (j) BlackRock’s implementation of the Master Fund’s valuation and liquidity procedures; (k) an analysis of management fees for products with similar investment mandates across the open-end fund, exchange-traded fund (“ETF”), closed-end fund and institutional account product channels, as applicable, and the similarities and differences between these products and the services provided as compared to the Master Portfolio; (l) BlackRock’s compensation methodology for its investment professionals and the incentives it creates, along with investment professionals’ investments in the fund(s) they manage; and (m) periodic updates on BlackRock’s business.

Board Considerations in Approving the Agreements



INTERNATIONAL TILTS MASTER PORTFOLIO	JUNE 30, 2015	19


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

Lipper, Inc. (“Lipper”) on Master Portfolio fees and expenses as compared with a peer group of funds as determined by Lipper (“Expense Peers”) and the investment performance of the Master Portfolio as compared with a peer group of funds as determined by Lipper;¹ (b) information on the profits realized by BlackRock and its affiliates pursuant to the Agreements and a discussion of fall-out benefits to BlackRock and its affiliates; (c) a general analysis provided by BlackRock concerning investment management fees charged to other clients, such as institutional clients, sub-advised mutual funds, ETFs and closed-end funds, under similar investment mandates, as well as the performance of such other clients, as applicable; (d) review of non-management fees; (e) the existence, impact and sharing of potential economies of scale; (f) a summary of aggregate amounts paid by the Master Portfolio to BlackRock; (g) sales and redemption data regarding the Master Portfolio’s interests; and (h) if applicable, a comparison of management fees to similar BlackRock open-end funds, as classified by Lipper.

At the May Meeting, the Board, including the Independent Board Members, approved the continuation of the Advisory Agreement between the Manager and the Master Fund with respect to the Master Portfolio, and the Sub-Advisory Agreement between the Manager and the Sub-Advisor with respect to the Master Portfolio, each for a one-year term ending June 30, 2016. In approving the continuation of the Agreements, the Board considered: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of the Master Portfolio and BlackRock; (c) the advisory fee and the cost of the services and profits to be realized by BlackRock and its affiliates from their relationship with the Master Portfolio; (d) the Master Portfolio’s costs to investors compared to the costs of Expense Peers and performance compared to the relevant performance comparison as previously discussed; (e) the sharing of potential economies of scale; (f) fall-out benefits to BlackRock and its affiliates as a result of its relationship with the Master Portfolio; and (g) other factors deemed relevant by the Board Members.

The Board also considered other matters it deemed important to the approval process, such as payments made to BlackRock or its affiliates relating to the placement of Master Portfolio interests, securities lending and cash management, services related to the valuation and pricing of portfolio holdings of the Master Portfolio, direct and indirect benefits to BlackRock and its affiliates from their relationship with the Master Portfolio and advice from independent legal counsel with respect to the review process and materials submitted for the Board’s review. The Board noted the willingness of BlackRock personnel to engage in open, candid discussions with the Board. The Board did not identify any particular information as determinative, and each Board Member may have attributed different weights to the various items considered.

A. Nature, Extent and Quality of the Services Provided by BlackRock: The Board, including the Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of the Master Portfolio. Throughout the year, the Board compared Master Portfolio performance to the performance of a comparable group of mutual funds, relevant benchmark, and performance metrics, as applicable. The Board met with BlackRock’s senior management personnel responsible for investment activities, including the senior investment officers. The Board also reviewed the materials provided by the Master Portfolio’s portfolio management team discussing the Master Portfolio’s performance and the Master Portfolio’s investment objective(s), strategies and outlook.

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

Funds are ranked by Lipper in quartiles, ranging from first to fourth, where first is the most desirable quartile position and fourth is the least desirable.



20	INTERNATIONAL TILTS MASTER PORTFOLIO	JUNE 30, 2015


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

B. The Investment Performance of the Master Portfolio and BlackRock: The Board, including the Independent Board Members, also reviewed and considered the performance history of the Master Portfolio. In preparation for the April Meeting, the Board worked with its independent legal counsel, BlackRock and Lipper to develop a template for, and was provided with, reports independently prepared by Lipper, which included a comprehensive analysis of the Master Portfolio’s performance. The Board also reviewed a narrative and statistical analysis of the Lipper data that was prepared by BlackRock. In connection with its review, the Board received and reviewed information regarding the investment performance of the Master Portfolio as compared to other funds in its applicable Lipper category. The Board was provided with a description of the methodology used by Lipper to select peer funds and periodically meets with Lipper representatives to review its methodology. The Board and its Performance Oversight and Contract Committee regularly review, and meet with Master Portfolio management to discuss, the performance of the Master Portfolio throughout the year.

The Board noted that for each of the one-year and since-inception periods reported, the Master Portfolio ranked in the second quartile against its Lipper Performance Universe.

C. Consideration of the Advisory/Management Fees and the Cost of the Services and Profits to be Realized by BlackRock and its Affiliates from their Relationship with the Master Portfolio: The Board, including the Independent Board Members, reviewed the Master Portfolio’s contractual advisory fee rate compared with the other funds in its Lipper category. The contractual advisory fee rate is shown before taking into account any reimbursements or fee waivers. The Board also compared the Master Portfolio’s total expense ratio, as well as its actual advisory fee rate, to those of other funds in its Lipper category. The total expense ratio represents a fund’s total net operating expenses, including any 12b-1 or non-12b-1 service fees. The total expense ratio gives effect to any expense reimbursements or fee waivers that benefit a fund, and the actual advisory fee rate gives effect to any advisory fee reimbursements or waivers that benefit a fund. The Board considered the services provided and the fees charged by BlackRock and its affiliates to other types of clients with similar investment mandates, as applicable, including institutional accounts and sub-advised mutual funds.

The Board received and reviewed statements relating to BlackRock’s financial condition. The Board reviewed BlackRock’s profitability methodology and was also provided with a profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to the Master Portfolio. The Board reviewed BlackRock’s profitability with respect to the Master Portfolio and other funds the Board currently oversees for the year ended December 31, 2014 compared to available aggregate profitability data provided for the two prior years. The Board reviewed BlackRock’s profitability with respect to certain other U.S. fund complexes managed by the Manager and/or its affiliates. The Board reviewed BlackRock’s assumptions and methodology of allocating expenses in the profitability analysis, noting the inherent limitations in allocating costs among various advisory products. The Board recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, precision of expense allocations and business mix. As a result, calculating and comparing profitability at individual fund levels is difficult.

In addition, the Board considered the cost of the services provided to the Master Portfolio by BlackRock, and BlackRock’s and its affiliates’ profits relating to the management and distribution of the Master Portfolio and the other funds advised by BlackRock and its affiliates. As part of its analysis, the Board reviewed BlackRock’s methodology in allocating its costs to the management of the Master Portfolio. The Board also considered whether BlackRock has the financial resources necessary to attract and retain high quality investment management personnel to perform its obligations under the Agreements and to continue to provide the high quality of services that is expected by the Board. The Board further considered factors including but not limited to BlackRock’s commitment of time, assumption of risk and liability profile in servicing the Master Portfolio in contrast to what is required of BlackRock with respect to other products with similar investment mandates across the open-end fund, ETF, closed-end fund, sub-advised mutual fund and institutional account product channels, as applicable.

The Board noted that the Master Portfolio’s contractual advisory fee rate ranked in the first quartile, and that the actual advisory fee rate and total expense ratio each ranked in the first quartile, relative to the Master Portfolio’s Expense Peers. The Board also noted that the Master Portfolio has an advisory fee arrangement that includes breakpoints that adjust the fee rate downward as the size of the Master Portfolio increases above certain contractually specified levels. The Board further noted that BlackRock and its affiliates have contractually agreed to reimburse or otherwise compensate the Master Portfolio for the fees and expenses of the Independent Board Members, counsel to the Independent Board Members and the Master Portfolio’s independent registered public accounting firm.



INTERNATIONAL TILTS MASTER PORTFOLIO	JUNE 30, 2015	21


Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement (concluded)

D. Economies of Scale: The Board, including the Independent Board Members, considered the extent to which economies of scale might be realized as the assets of the Master Portfolio increase, as well as the existence of expense caps, as applicable. The Board also considered the extent to which the Master Portfolio benefits from such economies and whether there should be changes in the advisory fee rate or breakpoint structure in order to enable the Master Portfolio to participate in these economies of scale, for example through the use of revised breakpoints in the advisory fee based upon the asset level of the Master Portfolio. In their consideration, the Board Members took into account the existence of any expense caps and further considered the continuation and/or implementation, as applicable, of such caps.

E. Other Factors Deemed Relevant by the Board Members: The Board, including the Independent Board Members, also took into account other ancillary or “fall-out” benefits that BlackRock or its affiliates may derive from their respective relationships with the Master Portfolio, both tangible and intangible, such as BlackRock’s ability to leverage its investment professionals who manage other portfolios and risk management personnel, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates as service providers to the Master Portfolio, including for administrative, distribution, securities lending and cash management services. The Board also considered BlackRock’s overall operations and its efforts to expand the scale of, and improve the quality of, its operations. The Board also noted that BlackRock may use and benefit from third party research obtained by soft dollars generated by certain registered fund transactions to assist in managing all or a number of its other client accounts. The Board further noted that it had considered the investment by BlackRock’s funds in affiliated ETFs without any offset against the management fees payable by the funds to BlackRock.

Conclusion

The Board, including the Independent Board Members, approved the continuation of the Advisory Agreement between the Manager and the Master Fund with respect to the Master Portfolio for a one-year term ending June 30, 2016, and the Sub-Advisory Agreement between the Manager and the Sub-Advisor with respect to the Master Portfolio for a one-year term ending June 30, 2016. Based upon its evaluation of all of the aforementioned factors in their totality, the Board, including the Independent Board Members, was satisfied that the terms of the Agreements were fair and reasonable and in the best interest of the Master Portfolio and its interest holders. In arriving at its decision to approve the Agreements, the Board did not identify any single factor or group of factors as all-important or controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were also assisted by the advice of independent legal counsel in making this determination. The contractual fee arrangements for the Master Portfolio reflect the results of several years of review by the Board Members and predecessor Board Members, and discussions between such Board Members (and predecessor Board Members) and BlackRock. As a result, the Board Members’ conclusions may be based in part on their consideration of these arrangements in prior years.



22	INTERNATIONAL TILTS MASTER PORTFOLIO	JUNE 30, 2015


Officers and Trustees

Rodney D. Johnson, Chair of the Board and Trustee

David O. Beim, Trustee

Collette Chilton, Trustee

Frank J. Fabozzi, Trustee

Dr. Matina S. Horner, Trustee

Herbert I. London, Trustee

Cynthia A. Montgomery, Trustee

Barbara G. Novick, Trustee

Joseph P. Platt, Trustee

Robert C. Robb, Jr., Trustee

Toby Rosenblatt, Trustee

Mark Stalnecker, Trustee

Kenneth L. Urish, Trustee

Frederick W. Winter, Trustee

John M. Perlowski, President and Chief Executive Officer

Richard Hoerner, CFA, Vice President

Jennifer McGovern, Vice President

Neal Andrews, Chief Financial Officer

Jay Fife, Treasurer

Charles Park, Chief Compliance Officer

Fernanda Piedra, Anti-Money Laundering Compliance Officer

Benjamin Archibald, Secretary

Effective March 1, 2015, Charles Park resigned as Anti-Money Laundering Compliance Officer of MIP and Fernanda Piedra became Anti-Money Laundering Compliance Officer of MIP.

Effective May 18, 2015, Ian MacKinnon resigned as a Trustee of MIP.



Investment Advisor BlackRock Advisors, LLC Wilmington, DE 19809	Custodian and Accounting Agent State Street Bank and Trust Company Boston, MA 02110	Legal Counsel Sidley Austin LLP New York, NY 10019

Sub-Advisor BlackRock Fund Advisors San Francisco, CA 94105	Independent Registered Public Accounting Firm PricewaterhouseCoopers LLP Philadelphia, PA 19103	Address of MIP 400 Howard Street San Francisco, CA 94105



INTERNATIONAL TILTS MASTER PORTFOLIO	JUNE 30, 2015	23


Additional Information


Availability of Quarterly Schedule of Investments


Availability of Proxy Voting Policies and Procedures


Availability of Proxy Voting Record



24	INTERNATIONAL TILTS MASTER PORTFOLIO	JUNE 30, 2015



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 Registrants – Not Applicable

Item 6 –		Investments
		(a) The registrants’ 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 registrants’ principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrants’ 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 registrants’ internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrants’ internal control over financial reporting.

Item 12 –		Exhibits attached hereto

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

		(a)(2) – Certifications – Attached hereto

		(a)(3) – Not Applicable

		(b) – Certifications – Attached hereto

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, each registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BlackRock Funds III and Master Investment Portfolio


By:		/s/ John M. Perlowski
		John M. Perlowski
		Chief Executive Officer (principal executive officer) of
		BlackRock Funds III and Master Investment Portfolio

Date: September 3, 2015

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 each 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 Funds III and Master Investment Portfolio

Date: September 3, 2015


By:		/s/ Neal J. Andrews
		Neal J. Andrews
		Chief Financial Officer (principal financial officer) of
		BlackRock Funds III and Master Investment Portfolio

Date: September 3, 2015