JANUARY 28, 2013
SUMMARY PROSPECTUS
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BlackRock
Funds
SM
| Investor, Institutional and Class R Shares
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BlackRock International Opportunities
Portfolio
Investor A: BREAX Investor B: BREBX
Investor C: BRECX Institutional: BISIX
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Before you invest, you may want to
review the Funds prospectus, which contains more information about the Fund and its risks. You can find the Funds prospectus (including
amendments and supplements) and other information about the Fund, including the Funds statement of additional information and shareholder report,
online at http://www.blackrock.com/prospectus. You can also get this information at no cost by calling (800) 441-7762 or by sending an e-mail request
to
prospectus.request@blackrock.com
, or from your financial professional. The Funds prospectus and statement of additional information,
both dated January 28, 2013, as amended and supplemented from time to time, are incorporated by reference into (legally made a part of) this Summary
Prospectus.
This Summary Prospectus contains
information you should know before investing, including information about risks. Please read it before you invest and keep it for future
reference.
The Securities and Exchange
Commission has not approved or disapproved these securities or passed upon the adequacy of this Summary Prospectus. Any representation to the contrary
is a criminal offense.
Not FDIC Insured No Bank Guarantee May Lose Value
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Summary Prospectus
Key Facts About BlackRock
International Opportunities Portfolio
Investment Objective
The investment objective of BlackRock International Opportunities
Portfolio (International Opportunities or the Fund), a series of BlackRock Funds
SM
(the Trust), is to
seek long-term capital appreciation.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you
buy and hold shares of International Opportunities. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the
future, at least $25,000 in the fund complex advised by BlackRock Advisors, LLC (BlackRock). More information about these and other
discounts is available from your financial professional and in the Details About the Share Classes section on page 47 of the Funds
prospectus and in the Purchase of Shares section on page II-58 of the Funds statement of additional information.
Shareholder Fees
(fees paid directly
from your investment)
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Investor A
Shares
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Investor B
Shares
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Investor C
Shares
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Institutional
Shares
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Maximum Sales Charge (Load) Imposed on Purchases
(as percentage of offering price)
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5.25
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%
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None
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None
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None
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Maximum Deferred Sales Charge (Load) (as percentage of
offering price or redemption proceeds, whichever
is lower)
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None
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1
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4.50
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%
2
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1.00
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%
3
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None
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Annual Fund Operating Expenses
(expenses that you pay each year as a
percentage of the value of your investment)
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Investor A
Shares
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Investor B
Shares
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Investor C
Shares
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Institutional
Shares
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Management Fees
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0.98
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%
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0.98
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%
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0.98
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%
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0.98
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%
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Distribution (12b-1) and/or Service Fees
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0.25
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%
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1.00
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%
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1.00
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%
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None
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Other Expenses
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0.34
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%
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0.43
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%
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0.36
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%
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0.31
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%
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Acquired Fund Fees and Expenses
4
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0.01
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%
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0.01
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%
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0.01
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%
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0.01
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%
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Total Annual Fund Operating Expenses
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1.58
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%
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2.42
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%
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2.35
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%
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1.30
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%
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Fee Waivers and/or Expense Reimbursements
5
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Total Annual Fund Operating Expenses After Fee Waivers
and/or Expense
Reimbursements
5
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1.58
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%
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2.42
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%
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2.35
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%
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1.30
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%
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1
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A contingent deferred sales charge
(CDSC) of 1.00% is assessed on certain redemptions of Investor A Shares made within 18 months after purchase where no initial sales charge
was paid at time of purchase as part of an investment of $1,000,000 or more.
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2
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The CDSC is 4.50% if shares are redeemed in less
than one year. The CDSC for Investor B Shares decreases for redemptions made in subsequent years. After six years there is no CDSC on Investor B
Shares. (See the section Details About the Share Classes Investor B Shares in the Funds prospectus for the complete schedule
of CDSCs.)
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There is no CDSC on Investor C Shares after one
year.
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4
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The Total Annual Fund Operating Expenses do not
correlate to the ratio of expenses to average net assets given in the Funds most recent annual report which does not include the Acquired Fund
Fees and Expenses.
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As described in the Management of the
Funds section of the Funds prospectus on pages 6270, BlackRock has contractually agreed to waive and/or reimburse fees or expenses in
order to limit Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (excluding Dividend Expense, Interest Expense,
Acquired Fund Fees and Expenses and certain other Fund expenses) as a percentage of average daily net assets to 1.98% (for Investor A Shares), 2.75%
(for Investor B and Investor C Shares) and 1.49% (for Institutional Shares) until February 1, 2014. The Fund may have to repay some of these waivers
and/or reimbursements to BlackRock 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 a majority of the outstanding voting securities of the Fund.
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Example:
This Example is intended to help you compare the cost of investing
in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated
and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the
Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would
be:
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1 Year
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3 Years
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5 Years
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10 Years
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Investor A Shares
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$
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677
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$
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998
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$
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1,340
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$
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2,305
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Investor B Shares
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$
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695
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$
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1,105
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$
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1,491
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$
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2,548
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Investor C Shares
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$
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338
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$
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733
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$
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1,255
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$
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2,686
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Institutional Shares
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$
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132
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$
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412
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$
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713
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$
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1,568
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You would pay the following expenses if you did not redeem your
shares:
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1 Year
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3 Years
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5 Years
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10 Years
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Investor B Shares
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$
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245
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$
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755
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$
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1,291
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$
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2,548
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Investor C Shares
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$
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238
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$
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733
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$
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1,255
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$
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2,686
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The Fund pays transaction costs, such as commissions, when it buys
and sells securities (or turns over its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in
higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example,
affect the Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 99% of the average value of its
portfolio.
Principal Investment Strategies of the Fund
Under normal market conditions, International Opportunities
invests at least 80% of its net assets in equity securities issued by foreign companies of any market capitalization. The Fund may invest up to 40% of
its net assets in stocks of issuers in emerging market countries.
The Fund seeks to buy primarily common stock but can also invest
in preferred stock and convertible securities. From time to time the Fund may invest in shares of companies through initial public offerings
(IPOs).
The Fund may, when consistent with the Funds investment
objective, buy or sell options or futures on a security or an index of securities and may buy options on a currency or a basket of currencies, or enter
into foreign currency transactions, including swaps (collectively, commonly known as derivatives). The Fund typically uses derivatives as a substitute
for taking a position in the underlying asset and/or as part of a strategy designed to reduce exposure to other risks, such as currency risk. The Fund
may also use derivatives to enhance returns, in which case their use would involve leveraging risk. The Fund may seek to obtain market exposure to the
securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as
reverse repurchase agreements or dollar rolls). The Fund may also use forward foreign currency exchange contracts (obligations to buy or sell a
currency at a set rate in the future).
Principal Risks of Investing in the Fund
Risk is inherent in all investing. The value of your investment in
International Opportunities, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time.
You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. The following is a
summary description of principal risks of investing in the Fund.
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Convertible Securities Risk
The market value
of a convertible security performs like that of a regular debt security; that is, if market interest rates rise, the value of a convertible security
usually falls. In addition, convertible securities are subject to the risk that the issuer will not be able to pay interest or dividends when due, and
their market value may change based on changes in the issuers credit rating or the markets perception of the issuers
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creditworthiness. Since it derives a portion of its value from the
common stock into which it may be converted, a convertible security is also subject to the same types of market and issuer risks that apply to the
underlying common stock.
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Derivatives Risk
The Funds use of
derivatives may reduce the Funds returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a
market to fluctuate significantly in price within a short time period. Derivatives are also subject to counterparty risk, which is the risk that the
other party in the transaction will not fulfill its contractual obligation. A risk of the Funds use of derivatives is that the fluctuations in
their values may not correlate perfectly with the overall securities markets. The possible lack of a liquid secondary market for derivatives and the
resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more
difficult for the Fund to value accurately. Derivatives may give rise to a form of leverage and may expose the Fund to greater risk and increase its
costs. Recent legislation calls for new regulation of the derivatives markets. The extent and impact of the regulation is not yet known and may not be
known for some time. New regulation may make derivatives more costly, may limit the availability of derivatives, or may otherwise adversely affect the
value or performance of derivatives.
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Emerging Markets Risk
Emerging markets are
riskier than more developed markets because they tend to develop unevenly and may never fully develop. Investments in emerging markets may be
considered speculative.
Emerging markets are more likely to experience hyperinflation and currency devaluations, which adversely affect returns to
U.S. investors. In addition, many emerging securities markets have far lower trading volumes and less liquidity than developed markets.
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Equity Securities Risk
Stock markets are
volatile. The price of equity securities fluctuates based on changes in a companys financial condition and overall market and economic
conditions.
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Foreign Securities Risk
Foreign investments
often involve special risks not present in U.S. investments that can increase the chances that the Fund will lose money. These risks
include:
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The Fund generally holds its foreign securities and cash in
foreign banks and securities depositories, which may be recently organized or new to the foreign custody business and may be subject to only limited or
no regulatory oversight.
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Changes in foreign currency exchange rates can affect the value of
the Funds portfolio.
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The economies of certain foreign markets may not compare favorably
with the economy of the United States with respect to such issues as growth of gross national product, reinvestment of capital, resources and balance
of payments position.
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The governments of certain countries may prohibit or impose
substantial restrictions on foreign investments in their capital markets or in certain industries.
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Many foreign governments do not supervise and regulate stock
exchanges, brokers and the sale of securities to the same extent as does the United States and may not have laws to protect investors that are
comparable to U.S. securities laws.
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Settlement and clearance procedures in certain foreign markets may
result in delays in payment for or delivery of securities not typically associated with settlement and clearance of U.S. investments.
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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, including countries that do not use the Euro. These events may affect the value and liquidity of
certain of the Funds investments.
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Investment Style Risk
Under certain market
conditions, growth investments have performed better during the later stages of economic expansion. Therefore, this investment style may over time go
in and out of favor. At times when the investment style used by the Fund is out of favor, the Fund may underperform other equity funds that use
different investment styles.
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Leverage Risk
Some transactions may give rise
to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its
costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or
to meet any required asset segregation requirements. Increases and decreases in the value of the Funds portfolio will be magnified when the Fund
uses leverage.
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Market Risk and Selection Risk
Market risk is
the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and
unpredictably. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the
securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money.
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Mid-Cap Securities Risk
The securities of
mid-cap companies generally trade in lower volumes and are generally subject to greater and less predictable price changes than the securities of
larger capitalization companies.
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New Issues Risk
New
Issues are initial public offerings of equity securities of U.S. and non-U.S. issuers. Securities issued in IPOs have no trading history, and
information about the companies may be available for very limited periods. In addition, the prices of securities sold in IPOs may be highly volatile or
may decline shortly after the initial public offering.
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Small Cap Securities Risk
Small cap companies
may have limited product lines or markets. They may be less financially secure than larger, more established companies. They may depend on a more
limited management group than larger capitalized companies.
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Performance Information
The information shows you how International Opportunities
performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the average annual total
returns of each class of the Funds shares with that of the MSCI All Country World Index Ex-U.S. As with all such investments, past performance
(before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less
than those shown. However, the table includes all applicable fees and sales charges. If BlackRock and its affiliates had not waived or reimbursed
certain Fund expenses during these periods, the Funds returns would have been lower. Updated information on the Funds results can be
obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at (800) 882-0052.
Investor A Shares
ANNUAL TOTAL RETURNS
BlackRock
International Opportunities Portfolio
As of 12/31
During the ten-year period shown in the bar chart, the highest
return for a quarter was 28.03% (quarter ended June 30, 2009) and the lowest return for a quarter was 24.50% (quarter ended September 30,
2008).
As of 12/31/12
Average Annual
Total Returns
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1 Year
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5 Years
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10 Years
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BlackRock International Opportunities Portfolio Investor A
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Return Before Taxes
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11.83
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%
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(3.77
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)%
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11.98
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%
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Return After Taxes on Distributions
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11.59
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%
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(3.81
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)%
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11.19
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%
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Return After Taxes on Distributions and Sale of Shares
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8.00
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%
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(3.07
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)%
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10.68
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%
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BlackRock International Opportunities Portfolio Investor B
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Return Before Taxes
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12.50
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%
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(3.88
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)%
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11.89
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%
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BlackRock International Opportunities Portfolio Investor C
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Return Before Taxes
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16.15
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%
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(3.47
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)%
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11.74
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%
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BlackRock International Opportunities Portfolio Institutional
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Return Before Taxes
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18.38
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%
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(2.45
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)%
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12.95
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%
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MSCI All Country World Index Ex-U.S.
(Reflects no deduction for fees, expenses or
taxes)
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16.83
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%
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(2.89
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)%
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9.74
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%
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5
After-tax returns are calculated using the historical highest
individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the
investors tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares
through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Investor A Shares only, and
the after-tax returns for Investor B, Investor C and Institutional Shares will vary.
Investment Manager
International Opportunities investment manager is BlackRock
Advisors, LLC (previously defined as BlackRock). The Funds sub-adviser is BlackRock International Limited (the
Sub-Adviser). Where applicable, BlackRock refers also to the Sub-Adviser.
Portfolio Managers
Name
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Portfolio Manager
of the Fund
Since
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Title
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Thomas Callan, CFA
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1999
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Managing Director of BlackRock, Inc.
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Ian Jamieson, CFA
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2011
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Managing Director of BlackRock, Inc.
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Nigel Hart, CFA
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2012
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Managing Director of BlackRock, Inc.
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Purchase and Sale of Fund Shares
You may purchase or redeem shares of the Fund each day the New York
Stock Exchange is open. To purchase or sell shares you should contact your financial intermediary or financial professional, or, if you hold your
shares through the Fund, you should contact the Fund by phone at (800) 441-7762, by mail (c/o BlackRock Funds, P.O. Box 9819, Providence, Rhode Island
02940-8019), or by the Internet at www.blackrock.com/funds. The Funds initial and subsequent investment minimums generally are as follows,
although the Fund may reduce or waive the minimums in some cases:
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Investor A and
Investor C
Shares
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Investor B Shares
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Institutional Shares
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Minimum Initial Investment
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$1,000 for all accounts except:
· $250 for
certain fee- based programs.
· $100 for retirement plans.
· $50, if establishing an Automatic
Investment Plan.
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Available only through exchanges and dividend reinvestments by current holders and for purchase by certain
qualified employee benefit plans.
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$2 million for institutions and individuals.
Institutional Shares are available to clients of registered
investment advisors who have $250,000 invested in the Fund.
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Minimum Additional Investment
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$50 for all accounts except certain retirement plans and payroll deduction programs may have a lower
minimum.
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N/A
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No subsequent minimum.
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6
Tax Information
The Funds dividends and distributions may be subject to
Federal income taxes and may be taxed as ordinary income or capital gains, unless you are a tax-exempt investor or are investing through a retirement
plan, in which case you may be subject to Federal income tax upon withdrawal from such tax-deferred arrangements.
Payments to Broker/Dealers and Other Financial
Intermediaries
If you purchase shares of the Fund through a broker-dealer or other
financial intermediary, the Fund and BlackRock Investments, LLC, the Funds distributor, or its affiliates may pay the intermediary for the sale
of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other financial intermediary
and your individual financial professional to recommend the Fund over another investment. Ask your individual financial professional or visit your
financial intermediarys website for more information.
7
INVESTMENT COMPANY ACT FILE #811-05742
© BlackRock Advisors, LLC
SPRO-IO-0113
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