BlackRock Global Funds (BGF)

Transcription

1 BlackRock Global Funds (BGF) Unaudited Interim Report and Accounts 28 February 2011 R.C.S. Luxembourg: B.6317

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3 Contents BGF Chairman s Shareholder Letter 2 Investment Managers Report 3 Board of Directors 5 Management and Administration 5 Statement of Net Assets 6 Three Year Summary of Net Asset Values 12 Statement of Operations and Changes in Net Assets 28 Statement of Changes in Shares Outstanding 38 Portfolio of Investments Asia Pacific Equity Income Fund 51 Asian Dragon Fund 53 Asian Tiger Bond Fund 55 China Fund 59 Continental European Flexible Fund 61 Emerging Europe Fund 63 Emerging Markets Bond Fund 65 Emerging Markets Fund 69 Euro Bond Fund 71 Euro Corporate Bond Fund 78 Euro Reserve Fund 84 Euro Short Duration Bond Fund 85 Euro-Markets Fund 93 European Enhanced Equity Yield Fund 94 European Equity Income Fund (1) 97 European Focus Fund 98 European Fund 99 European Growth Fund 101 European Small & MidCap Opportunities Fund 103 European Value Fund 105 Fixed Income Global Opportunities Fund 106 Flexible Multi-Asset Fund 111 Global Allocation Fund 118 Global Corporate Bond Fund 131 Global Dynamic Equity Fund 139 Global Enhanced Equity Yield Fund 149 Global Equity Fund 153 Global Equity Income Fund (1) 155 Global Government Bond Fund 157 Global High Yield Bond Fund 161 Global Inflation Linked Bond Fund 168 Global Opportunities Fund 171 Global SmallCap Fund 174 India Fund 177 Japan Fund 178 Japan Small & MidCap Opportunities Fund 179 Japan Value Fund 181 Latin American Fund 182 Local Emerging Markets Short Duration Bond Fund 184 New Energy Fund 187 Pacific Equity Fund 189 Swiss Small & MidCap Opportunities Fund 191 United Kingdom Fund 192 US Basic Value Fund 193 US Dollar Core Bond Fund 194 US Dollar High Yield Bond Fund 202 US Dollar Reserve Fund 209 US Dollar Short Duration Bond Fund 211 US Flexible Equity Fund 217 US Government Mortgage Fund 219 US Growth Fund 222 US Small & MidCap Opportunities Fund 223 World Agriculture Fund 225 World Bond Fund 227 World Energy Fund 233 World Financials Fund 235 World Gold Fund 237 World Healthscience Fund 239 World Income Fund 241 World Mining Fund 247 World Technology Fund 249 Notes to the Financial Statements 251 General Information 260 (1) See Notes section. Subscriptions may be made only on the basis of the current Prospectus, together with the most recent audited annual report and accounts and unaudited interim report and accounts. Copies are available from the Investor Services Centre, the Transfer Agent, the Manager or any of the Distributors. Unaudited Interim Report and Accounts 1

4 BGF Chairman s Shareholder Letter February 2011 Dear Shareholder I am writing to update you on the activities of BlackRock Global Funds (BGF) over the six months to the end of February The performance of the Funds is covered in more detail in the separate Investment Manager s report. You will see from the report that capital markets have generally continued to make progress over this period. The MSCI World Index (a broad indicator of the performance of global equity markets) rose by 21.9% in local currency terms over the period, with both Developed and Emerging Markets seeing growth. However, volatility remained high, with concerns over the periphery countries in Europe leading to a market pullback, particularly in November when a rescue package was granted to Ireland. Signs of inflation in Emerging Markets, particularly China, also continued to cause concern to investors. Against this background of growing confidence in equity capital markets, investors generally moved to increase levels of risk in their portfolios, through the purchase of equity exposure at the expense of fixed income and cash products, where interest rates remain generally low. Mainly driven by the strong market background, but also assisted by reasonably strong net subscriptions over the period, the assets under management (AUM) in the BGF range increased by 26%, from $82.9bn to $104.3bn (exceeding the $100bn mark for the first time). Six of the funds have more than doubled in size over the period: Continental European Flexible Fund has increased by $418m (107%); European Focus Fund has increased by $1,061m (151%); Flexible Multi-Asset Fund has increased by $136m (116%). Swiss Opportunities Fund has increased by $430m (176%); US Growth Fund has increased by $205m (107%); World Agriculture Fund has increased by $180m (318%); Alongside the European Focus Fund, mentioned above, seven other funds saw an increase in AUM of more than $1bn. The largest increase in AUM in absolute terms was registered by World Mining Fund, which grew by $3,424m over the period. Only 13 funds experienced a decrease in AUM over the period. Most of these reductions were not significant. Most notable in relative terms was the US Dollar Core Bond Fund which declined by 29%, whilst the largest decrease in absolute terms was from the BGF Euro Short Duration Bond Fund, which declined by 858m. In both these cases, the decreases in AUM, were the result of significant redemptions reflecting the general market background for bond funds mentioned above. We continue to manage the BGF Fund range actively to make sure that it meets the future needs of our clients. There were two fund launches over the period: Global Equity Income Fund, launched on the 12 November 2010; European Equity Income Fund, launched on the 3 December The launch of these two funds (to add to the Asian-Pacific Equity Income Fund, which was launched in September 2009) reflects BlackRock s belief that, in the current low interest rate environment, equity income products will be attractive to clients. We expect to add further equity income products to the range in due course. Should you have any questions on any of this material, please contact us via our website: Yours faithfully, Nicholas C.D. Hall Chairman 2 BlackRock Global Funds (BGF)

5 Investment Managers Report Performance overview 1 September February 2011 Nervousness and uncertainty dominated the financial markets As evidence of a slowdown in global economic activity gained momentum, fears of something potentially more severe, namely a double-dip recession, started to govern the financial markets. There were high volatility levels as investors pondered the possibility of further quantitative easing from the Federal Reserve, whether other central banks would follow suit, and what chance the new programme had of working. Meanwhile, a tense stand off between policymakers in major currency regions developed, giving birth to the term currency war. Investors became increasingly aware that the pattern was beginning to look like an international failure of policy coordination. In line with market expectations, a second round of quantitative easing was applied by the Federal Reserve, aiming to bolster asset markets. The first months of 2011 saw one of last year s biggest macro issues still unresolved. The market response to the bailout of Greece could have been construed as a vote of confidence that decisive action had been taken. However, with the subsequent crisis affecting Ireland and Spanish bond yields running above the economy s sustainable growth rate, it appeared that investors were after all not fully convinced by the facilities put in place. Nevertheless, investors can probably look back on 2010 with moderate satisfaction, given the positive returns in equities, credit, commodities, and (just) government bonds. Given that for most of 2010, investor expectations lurched between deflation, deficits and debased currencies, broadly based gains have offered a welcome tonic. However, these positive returns do not necessarily reflect the alleviation of investor concerns. Nervousness about the security of the global economic recovery persists. We can identify three main causes for this anxiety. First, Western economies are still wrestling with high unemployment. Second, despite the Greek and Irish bailouts, European sovereign finances are not yet on a sustainable path. And third, the repeated quantitative easing raises doubts about an orderly solution. In 2010, the challenge of inflation in Asian and emerging market economies appeared to be patchy and likely to be dealt with in relatively few steps by central banks. This same challenge has become somewhat more material in There was a divergence between developed and emerging markets as concerns about inflationary pressures and monetary policy in the latter led to underperformance. Furthermore, growing political instability in the Middle East and North Africa over the past months has been a main contributor to the rising oil price and, consequently, the inflationary environment. This has lead to renewed risk aversion and volatility. Fund Performance Performance data stated is for the main (A) share class of the relevant Fund, stated in the base currency of the Fund. Equity Fund Performance Our BGF World Energy Fund and BGF World Mining Fund were the period s most outstanding performers, returning 45.44% and 36.54%, respectively. The BGF World Energy Fund has greatly benefited from increasing oil prices, especially in the last few months as a result of the growing political instability in the Middle East and North Africa. In this environment, the Fund focused its investments on those companies that stand to benefit most from the improving energy outlook. It was positioned overweight oil services and exploration and production companies and underweight the integrated oil companies. Meanwhile, the BGF World Mining Fund has benefited from months of extraordinarily robust commodity prices, especially with regards to precious and base metals. Additionally, bulk commodities, such as iron ore, have also performed well over the period, contributing to positive performance. By contrast, our BGF India Fund turned out to be the weakest performer, with losses of 3.06% during the six-month period ending 28 February. The main cause of the Fund s underperformance in late 2010 was its underweight exposure to the IT sector, as well as overweight exposure to healthcare names and weak stock selection in this sector. In the beginning of 2011, India was the second worst performing emerging market after Egypt and its currency depreciated against both the US dollar and the euro. In addition, inflation remained high and industrial production fell sharply. Mixed Asset Fund Performance The diversified BGF Global Allocation Fund which holds fixed income assets, stocks and cash generated a reasonable absolute return over the last six months. Despite trailing marginally behind its benchmark in the last six months, over the last 10 years, it has garnered returns of over %, outperforming the benchmark by almost 29%. Meanwhile, the BGF Flexible Multi-Asset Fund generated returns of 5.89% over the last six months, underperforming its benchmark by 0.26%. Many of the themes that had been profitable over 2010, notably gold and emerging markets, reversed this year. However, the Fund s active allocation policy was rewarded as it reduced its overweight emerging markets exposure, but its underweight position to developed markets did weigh on performance. Fixed Income Fund Performance As the sovereign peripheral European debt crisis continued to dominate markets (especially Ireland, Portugal and Spain), risk assets generally remained fragile as investors monitored developments in peripheral European countries for signs of further stress. Ultimately, an EU-led assistance package stabilised the Irish situation, allowing markets to consolidate into year end. Additionally, the announcement of a second round of quantitative easing in the US prompted weakness in Treasuries. In the UK, the coalition government announced a package of spending and interest rates were unchanged. Unaudited Interim Report and Accounts 3

6 Investment Managers Report Performance overview 1 September February 2011 continued Mainly due to the travails of peripheral European sovereign debt markets, fixed income funds produced mixed absolute returns over the period, as accommodative monetary policies kept interest rates low. The beginning of 2011 was strong in terms of economic data and risk assets, but choppy for global rates markets, as geopolitical concerns pushed oil prices higher and halted a rise in rates. With regards to BlackRock s fixed income funds, the BGF Global High Yield Bond Fund saw the highest returns, with a 11.50% over the period, mainly as a result of positive security selection throughout most high yield credit tiers. By the end of 2010, the portfolio selectively participated in the high yield new-issue calendar, in pursuit of higher quality deals illustrating strong risk/ reward profiles, good fundamentals, solid cashflows and earnings. In 2011, security selection within B-rated and CCC-rated credits hampered performance, while security selection in BBB-rated names benefitted. The high yield market continued its positive tone buoyed by solid credit fundamentals and positive economic data. This last factor was also a positive contributor to the performance of the BGF US Dollar High yield Bond Fund during the first months of This Fund delivered the second best performance amongst fixed income funds during the last six months. A key beneficial factor was that, given the risk adverse environment that prevailed during this period, the portfolio maintained a relatively cautious stance on lower-quality names and consumer-driven credits exhibiting higher beta and/or equity-correlated risks. We remain cautious on European bonds and the euro, while recognising that globally competitive companies may well benefit from low rates and a weak currency. The fundamental concerns over emerging markets are grounded, but should not obscure the longer-term bull case founded on better demographics and stronger finances. As a result we are neutral on emerging markets, but expect buying opportunities into the summer. Lastly, we are aware that perhaps the biggest consensus view is that equities will lead 2011 market returns. We believe this is a case where the consensus can be right, but one should expect that conviction to be tested by periods of short-term profit-taking in the coming months. * Source: as at end of February 2011; Source: Morningstar; basis: NAV price with gross dividends reinvested, net of expenses. Outlook In late 2010, many investors thought that the European sovereign crisis justified short positions in peripheral government bonds and the euro. There was also consensus that as emerging market investments were benefiting from compelling structural advantages versus Western equivalents, superior returns were inevitable. Furthermore, an equally crowded position was that the prospects facing companies in crisis-hit sectors, such as financials, were significantly weaker than cash-rich emerging markets plays, such as materials. Nonetheless, in early 2011, all these pieces of conventional wisdom were severely challenged, leading to aggressive rotations. Various ex-post justifications have arisen for the move. In Europe, there has been increasing discussion of proposed measures to reinforce the European Financial Stability Facility. Investors have become hopeful that European leaders will agree on a plan which not only stands ready to support Portugal, but is big enough to support Spain and potentially to pre-empt bailouts by buying bonds in primary or secondary markets. For emerging markets, the reality of domestic inflation pressures across a range of markets is coming home to investors, especially as it becomes clear that policy tightening will characterise at least the first half of These trends also drive some of the rotation, with Western plays on emerging markets demand faring relatively poorly in the equity markets. 4 BlackRock Global Funds (BGF)

7 Board of Directors Chairman Nicholas C.D. Hall* 85 Briarwood Road, London SW4 9PJ, UK Directors Emilio Novela Berlin* Paseo de la Castellana 40 bis 4a Planta, Madrid, Spain Resigned: 4 February James Charrington* Senior Managing Director, Chairman, EMEA BlackRock Investment Management (UK) Limited 33 King William Street, London EC4R 9AS, UK Frank P. Le Feuvre* Managing Director BlackRock (Channel Islands) Limited Forum House, Grenville Street, St. Helier, Jersey JE1 0BR Channel Islands Francine Keiser* 35, avenue J.F. Kennedy, L-1855 Luxembourg Grand Duchy of Luxembourg Appointed: 1 January 2011 Geoffrey D. Radcliffe* Managing Director BlackRock (Luxembourg) S.A. 6D route de Trèves, L-2633 Senningerberg Grand Duchy of Luxembourg Maarten F. Slendebroek* Managing Director Head of Retail Business, BlackRock Investment Management (UK) Limited 33 King William Street, London EC4R 9AS, UK Appointed: 21 February 2011 *All Directors are non-executives Management and Administration Management Company BlackRock (Luxembourg) S.A. 6D route de Trèves, L-2633 Senningerberg Grand Duchy of Luxembourg Investment Advisers BlackRock Financial Management, Inc. Park Avenue Plaza, 55 East 52 nd Street, New York, NY 10055, USA BlackRock International Limited 40 Torphichen Street, Edinburgh EH3 8JB, Scotland BlackRock Investment Management, LLC 800 Scudders Mill Road, Plainsboro, NJ 08536, USA BlackRock Investment Management (UK) Limited 33 King William Street, London EC4R 9AS, UK Management and Administration continued BlackRock (Hong Kong) Limited: Suites Tower 6 The Gateway Tsimshatsui, Kowloon Hong Kong, China BlackRock Japan Co. Limited: Sapia Tower Marunouchi Chiyoda-ku Tokyo, Japan Principal Distributor BlackRock (Channel Islands) Limited Forum House, Grenville Street, St. Helier, Jersey JE1 0BR Channel Islands Investor Services Written Enquiries: BlackRock Investment Management (UK) Limited, c/o BlackRock (Luxembourg) S.A. P.O. Box 1058, L-1010 Luxembourg Grand Duchy of Luxembourg All other enquiries: Telephone: Fax: Custodian The Bank of New York Mellon (International) Ltd 2-4, rue Eugène Ruppert L-2453 Luxembourg Grand Duchy of Luxembourg Fund Accountant The Bank of New York Mellon (International) Ltd 2-4, rue Eugène Ruppert L-2453 Luxembourg Grand Duchy of Luxembourg Transfer Agent and Registrar J.P. Morgan Bank Luxembourg S.A. 6C, route de Trèves, L-2633 Senningerberg Grand Duchy of Luxembourg Auditor PricewaterhouseCoopers S.à r.l. 400, route d Esch, L-1471 Luxembourg Grand Duchy of Luxembourg Legal Advisers Linklaters LLP 35 avenue John F. Kennedy, L-1855 Luxembourg Grand Duchy of Luxembourg Listing Agent J.P. Morgan Bank Luxembourg S.A. 6C, route de Trèves, L-2633 Senningerberg Grand Duchy of Luxembourg Paying Agents A list of Paying Agents is to be found on page 260. Registered Office Aerogolf Centre, 1A Hoehenhof, L-1736 Senningerberg Grand Duchy of Luxembourg Unaudited Interim Report and Accounts 5

8 Statement of Net Assets as at 28 February 2011 Fund Name Note BlackRock Global Funds Combined Asia Pacific Equity Income Fund Asian Dragon Fund Asian Tiger Bond Fund China Fund Continental European Flexible Fund US$ US$ US$ US$ US$ US$ US$ Emerging Europe Fund Emerging Markets Bond Fund Emerging Markets Fund Euro Bond Fund Assets Securities portfolio at cost 83,964,884,242 40,617, ,484, ,224, ,799, ,165,519 2,348,609, ,669,748 1,181,326,399 1,074,710,807 appreciation/(depreciation) 18,744,386,010 3,053,435 47,100,803 (4,574,700) (6,107,149) 50,182, ,620,949 2,598, ,146,276 (3,623,767) Securities portfolio at market value 2(a) 102,709,270,252 43,670, ,585, ,649, ,692, ,348,237 2,594,230, ,268,410 1,292,472,675 1,071,087,040 Cash at bank 2(a) 1,319,541,469 1,158,888 14,374,581 35,861,600 4,186, ,501 3,143,497 45,708,015 10,414,004 3,453,871 Interest and dividends receivable 2(a) 340,338, ,317 1,370,330 8,228, ,732 10,337,929 1,202,644 20,327,419 Receivable for investments sold 2(a) 1,243,472, ,630 4,306,922 25,651,300 13,628,410 12,616,226 34,799,043 Receivable for Fund shares subscribed 2(a) 713,942, ,128 3,143, ,310 7,095,619 5,604,471 10,919, ,789 7,395,775 4,420,221 gain on: Futures contracts 2(c) 25,638,066 97, , ,838 Forward foreign exchange contracts 2(c) 78,769,407 17, , , ,777 Market value of swaps 2(c) 46,642,610 3,261,136 4,759,265 4,206,417 Market value of purchased options/swaptions 2(c) 34,260,823 1,582, , ,400 Other assets 2(a,c) 3,929,346 32,032 12, ,539 57,173 34,951 2,071 Total assets 106,515,806,035 46,012, ,780, ,198, ,735, ,463,065 2,622,007, ,948,966 1,324,101,324 1,139,149,097 Liabilities Cash owed to bank 54,771,456 4,271,025 3,819,930 91, ,460 Income distribution payable 2(a) 5,071,605 1,100, ,167 78,078 Payable for investments purchased 2(a) 1,397,020, ,957 4,774, ,930 27,516,996 30,851,400 57,612 86,831 6,199,565 Payable for Fund shares redeemed 2(a) 567,056,017 25,702 2,406,825 9,377,978 10,894,293 3,463,446 12,720,199 2,984,373 6,508,475 4,198,366 loss on: Futures contracts 2(c) 1,131,074 Forward foreign exchange contracts 2(c) 12,982,240 1,041,903 2, ,196 Market value of swaps 2(c) 5,211,544 Market value of written options/swaptions 2(c) 20,380,770 37,673 Other liabilities 155,455,478 94, , ,243 1,328, ,583 5,006, ,939 1,979,937 1,918,065 Total liabilities 2,219,080, ,846 7,843,577 12,292,979 13,037,518 36,061,744 52,562,751 3,930,347 8,575,243 13,279,207 Total net assets 104,296,725,511 45,726, ,936, ,905, ,697, ,401,321 2,569,444, ,018,619 1,315,526,081 1,125,869,890 6 BlackRock Global Funds (BGF)

9 Statement of Net Assets as at 28 February 2011 continued Fund Name Note Euro Corporate Bond Fund Euro Reserve Fund Euro Short Duration Bond Fund Euro- Markets Fund European Enhanced Equity Yield Fund European Equity Income Fund (1) European Focus Fund European Fund European Growth Fund European Small & MidCap Opportunities Fund Assets Securities portfolio at cost 90,956, ,959,812 2,087,583,029 2,052,539,544 13,143,141 2,294,479 1,120,505,219 2,180,466, ,556, ,128,975 appreciation/(depreciation) (398,623) 30,116 (14,142,565) 205,563, , , ,502, ,523,209 26,796,462 24,703,997 Securities portfolio at market value 2(a) 90,557, ,989,928 2,073,440,464 2,258,102,947 13,564,016 2,400,025 1,238,007,962 2,553,989, ,353, ,832,972 Cash at bank 2(a) 575,277 13,559,946 (4,047,423) 4,739,647 17,953 14,071,490 51,566, ,358 5,251,837 Interest and dividends receivable 2(a) 2,140, ,675 32,135,884 22,218 26,808 2, ,829 2,656,155 30, Receivable for investments sold 2(a) 3,388 61,946,826 25,521,295 23,645 40,820,706 25,090,795 5,691,388 9,693,100 Receivable for Fund shares subscribed 2(a) 251, ,503 13,663,152 37,173,186 4,908,272 15,888,415 1,442, ,267 gain on: Futures contracts 2(c) 10,984 2,701,407 2,413 Forward foreign exchange contracts 2(c) 2,329, ,661 Market value of swaps 2(c) 321,445 7,388,688 Market value of purchased options/swaptions 2(c) 21, ,708 Other assets 2(a,c) 3, ,629 29,373 7,367 49, , , ,071 Total assets 93,886, ,753,572 2,190,215,576 2,320,849,019 18,363,896 2,420,308 1,298,626,137 2,649,298, ,104, ,139,489 Liabilities Cash owed to bank 5 465, Income distribution payable 2(a) 1,996 16,448 Payable for investments purchased 2(a) 201,431 3,997,023 17,585,304 41,818,367 2,877,587 17,141,850 21,022,202 2,263,713 2,411,302 Payable for Fund shares redeemed 2(a) 572, ,217 10,328,465 12,272,796 7,137 3,407,059 7,484, ,196 3,186,046 loss on: Futures contracts 2(c) Forward foreign exchange contracts 2(c) 44,564 13,672 2,819 Market value of swaps 2(c) Market value of written options/swaptions 2(c) 3,503 81,514 50,104 Other liabilities 100,697 91,266 3,198,137 2,971,182 28,923 10,227 1,866,750 3,146, , ,401 Total liabilities 924,210 4,287,506 31,209,873 57,527,665 2,977,423 10,227 22,415,659 31,656,447 3,171,416 6,296,749 Total net assets 92,962, ,466,066 2,159,005,703 2,263,321,354 15,386,473 2,410,081 1,276,210,478 2,617,641, ,933, ,842,740 (1) New Fund launched, see Note 1, for further details. The notes on pages 251 to 259 form an integral part of these financial statements. Unaudited Interim Report and Accounts 7

10 Statement of Net Assets as at 28 February 2011 continued Fund Name Note European Value Fund Fixed Income Global Opportunities Fund Flexible Multi Asset Fund Global Allocation Fund Global Corporate Bond Fund Global Dynamic Equity Fund Global Enhanced Equity Yield Fund Global Equity Fund Global Equity Income Fund (1) Global Government Bond Fund US$ US$ US$ US$ US$ US$ US$ US$ Assets Securities portfolio at cost 195,565, ,056, ,576,874 13,723,438, ,186,433 1,036,706, ,286, ,778, ,587, ,447,325 appreciation/(depreciation) 17,069,168 2,221,692 3,622,873 1,793,430,964 34,996, ,653,363 39,878,408 34,999,124 5,839,852 31,761,897 Securities portfolio at market value 2(a) 212,634, ,278, ,199,747 15,516,869, ,182,633 1,194,360, ,165, ,777, ,427, ,209,222 Cash at bank 2(a) 2,302,530 6,738,323 35,162,421 20,056,187 10,666,274 4,623,976 17,495, , ,345 16,509,078 Interest and dividends receivable 2(a) 385, , ,618 49,657,068 9,688,868 1,456, , , ,856 5,459,575 Receivable for investments sold 2(a) 1,954,356 1,355,976* 154,628 9,502, ,575* 978,928 1,268,421 85,163 Receivable for Fund shares subscribed 2(a) 596,130 1,182,968 3,941,064 55,818,766 86,962 5,781,493 2,324,570 1,628, ,085 2,622,538 gain on: Futures contracts 2(c) 214,257 15,646,063 1,990, , ,898 Forward foreign exchange contracts 2(c) 140, ,677 46,192, , ,443 Market value of swaps 2(c) 103, , ,745 49, ,144 Market value of purchased options/swaptions 2(c) 15, ,098 19,765,746 1,753, Other assets 2(a,c) 422,396 4,691 28, ,408 8, ,661 25,943 41, ,860 Total assets 218,295, ,728, ,775,210 15,734,209, ,011,521 1,211,437, ,399, ,912, ,158, ,752,489 Liabilities Cash owed to bank 91,209 1,615,337 22,718,580 5,646,100 1,633,840 Income distribution payable 2(a) 31,603 Payable for investments purchased 2(a) 2,791,024 20,971,750* 3,629,225 45,328,890 10,569,961* 7,140,908 78,972 Payable for Fund shares redeemed 2(a) 387,400 76, ,494 47,776, ,271 2,871, , ,972 1,704,984 loss on: Futures contracts 2(c) 258, ,733 Forward foreign exchange contracts 2(c) 661, , ,686 3,207,884 Market value of swaps 2(c) 2,171,286 Market value of written options/swaptions 2(c) 282,700 16,663,430 1,749, ,482 Other liabilities 296, , ,897 24,606, ,374 1,654, , , , ,115 Total liabilities 3,474,757 21,580,440 5,858, ,094,068 14,369,191 19,062,531 1,592, , ,224 7,177,398 Total net assets 214,820, ,148, ,916,557 15,577,115, ,642,330 1,192,375, ,806, ,965, ,575, ,575,091 (1) New Fund launched, see Note 1, for further details. * TBAs, see Note 2, for further details. 8 BlackRock Global Funds (BGF)

11 Statement of Net Assets as at 28 February 2011 continued Fund Name Note Global High Yield Bond Fund Global Inflation Linked Bond Fund Global Opportunities Fund Global SmallCap Fund India Fund Japan Fund Japan Small & MidCap Opportunities Fund Japan Value Fund Latin American Fund Local Emerging Markets Short Duration Bond Fund US$ US$ US$ US$ US$ US$ US$ Assets Securities portfolio at cost 1,044,530, ,293, ,414, ,942, ,386,622 3,394,519,600 17,936,257,194 17,187,363,164 6,409,888,423 2,482,008,875 appreciation/(depreciation) 30,055,457 6,581,192 15,875,679 61,463,483 81,769, ,453,600 1,446,936,686 1,015,847,436 1,934,244,798 57,808,814 Securities portfolio at market value 2(a) 1,074,585, ,874, ,290, ,406,003 1,010,155,998 3,643,973,200 19,383,193,880 18,203,210,600 8,344,133,221 2,539,817,689 Cash at bank 2(a) 122,358, ,049 5,934,474 3,945, ,597, ,770,208 27,846, ,937,294 33,298, ,120,659 Interest and dividends receivable 2(a) 21,363, , , ,451 51,629 1,771,468 31,675,630 2,803,308 29,410,382 23,115,252 Receivable for investments sold 2(a) 2,679, ,145 10,719,919 10,492,188 37,050, ,820,166 73,338,390 61,935,179 Receivable for Fund shares subscribed 2(a) 29,544, , ,994 1,192,211 20,967,662 23,685, ,194,766 30,358,000 30,046,811 9,662,589 gain on: Futures contracts 2(c) 1,284,723 Forward foreign exchange contracts 2(c) 4,061, ,015 15, ,000 6,114,318 Market value of swaps 2(c) 1,773,585 6,429 19,177,220 Market value of purchased options/swaptions 2(c) 7,826,461 Other assets 2(a,c) 65,823 35, ,186 55,319 61, ,880 Total assets 1,256,367, ,122, ,819, ,944,435 1,157,265,338 3,844,266,238 19,977,582,966 18,611,817,229 8,498,885,618 2,833,198,473 Liabilities Cash owed to bank 3,291,817 6, , ,396 Income distribution payable 2(a) 673,737 3, ,505 Payable for investments purchased 2(a) 16,380, ,287 2,693,994 23,459,320 5,031, ,196,104 18,619,254 Payable for Fund shares redeemed 2(a) 28,144, , ,703 8,794,171 9,808,948 28,531, ,399,846 97,281,581 47,311,708 10,008,899 loss on: Futures contracts 2(c) 19,228 Forward foreign exchange contracts 2(c) 1,771, ,828 3,971 2,929,540 Market value of swaps 2(c) Market value of written options/swaptions 2(c) Other liabilities 1,444, , , ,067 2,019,161 6,559,303 26,853,004 21,163,507 13,527,848 2,620,407 Total liabilities 46,643,044 5,335,446 1,016,844 12,047,232 35,287,429 40,123, ,449, ,446,094 79,462,781 17,190,747 Total net assets 1,209,724, ,787, ,802, ,897,203 1,121,977,909 3,804,143,086 19,348,133,125 18,493,371,135 8,419,422,837 2,816,007,726 The notes on pages 251 to 259 form an integral part of these financial statements. Unaudited Interim Report and Accounts 9

12 Statement of Net Assets as at 28 February 2011 continued Fund Name Note New Energy Fund Pacific Equity Fund Swiss Small & MidCap Opportunities Fund United Kingdom Fund US Basic Value Fund US Dollar Core Bond Fund US Dollar High Yield Bond Fund US Dollar Reserve Fund US Dollar Short Duration Bond Fund US Flexible Equity Fund US Government Mortgage Fund US$ US$ CHF US$ US$ US$ US$ US$ US$ US$ Assets Securities portfolio at cost 3,025,574, ,341, ,109, ,523,557 2,097,220, ,049,733 2,040,196, ,730, ,592,729 1,588,936, ,783,184 appreciation/(depreciation) (378,516,150) 20,647,725 47,314,974 73,623, ,029,116 (25,011,788) 112,103,440 34,311 1,382, ,037,652 (111,963,267) Securities portfolio at market value 2(a) 2,647,058, ,989, ,424, ,147,003 2,456,249, ,037,945 2,152,299, ,764, ,975,661 1,834,974, ,819,917 Cash at bank 2(a) 3,427,182 4,013,860 41,277,734 9,550,596 76,281,129 11,133,869 31,522,956 9,345,393 3,762, ,969 29,519,084 Interest and dividends receivable 2(a) 832, ,908 3,741 1,275,866 4,154,749 3,009,713 41,302,589 46,323 1,534,253 1,607, ,450 Receivable for investments sold 2(a) 62,688, ,586 16,134, , ,744,291* 11,841,129 3,689,752* 8,400, ,845,199* Receivable for Fund shares subscribed 2(a) 7,763, ,033 1,369,691 1,013,391 29,247,582 1,557,785 12,128,070 11,829,999 1,783,446 8,045, ,643 gain on: Futures contracts 2(c) Forward foreign exchange contracts 2(c) 1,319,734 1,444, ,830 1,724,774 Market value of swaps 2(c) 150,426 Market value of purchased options/swaptions 2(c) 244,724 Other assets 2(a,c) 29, , , ,487 46,466 18,997 8,896 5,963 Total assets 2,721,799, ,162, ,209, ,158,787 2,567,252, ,910,465 2,250,639, ,194, ,914,678 1,855,437, ,143,256 Liabilities Cash owed to bank ,936 8,735 Income distribution payable 2(a) 241, ,930 63,009 77,887 Payable for investments purchased 2(a) 3,404,492 1,175,612 2,441,434 50,550, ,258,327* 14,099,196 4,994,931 47,915,125* 9,121, ,599,455* Payable for Fund shares redeemed 2(a) 9,104, ,894 1,011,993 1,521,643 17,831,301 1,197,431 26,400,821 8,708, ,422 7,766, ,303 loss on: Futures contracts 2(c) 163, ,875 27,360 Forward foreign exchange contracts 2(c) 150, , ,132 Market value of swaps 2(c) 213, , ,963 Market value of written options/swaptions 2(c) 81,000 Other liabilities 4,533, , , ,798 3,099,085 1,568,874 2,379, , ,125 2,262, ,489 Total liabilities 17,042,945 2,148,201 4,293,499 2,078,441 71,480, ,513,960 43,983,569 13,832,567 48,954,688 19,151, ,375,457 Total net assets 2,704,756, ,014, ,916, ,080,346 2,495,772, ,396,505 2,206,656, ,362, ,959,990 1,836,285, ,767,799 * TBAs, see Note 2, for further details. 10 BlackRock Global Funds (BGF)

13 Statement of Net Assets as at 28 February 2011 continued Fund Name Note US Growth Fund US Small & MidCap Opportunities Fund World Agriculture Fund World Bond Fund World Energy Fund World Financials Fund World Gold Fund World Healthscience Fund US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ World Income Fund World Mining Fund World Technology Fund Assets Securities portfolio at cost 334,093, ,367, ,718, ,339,456 4,852,973, ,361,753 4,755,095, ,391, ,495,208 10,324,405, ,510,251 appreciation/(depreciation) 58,750, ,600,883 23,529,165 (11,560,427) 1,625,859,583 35,040,172 3,988,568,115 56,141,696 13,466,423 6,508,033,001 27,495,998 Securities portfolio at market value 2(a) 392,844, ,968, ,247, ,779,029 6,478,832, ,401,925 8,743,663, ,533, ,961,631 16,832,438, ,006,249 Cash at bank 2(a) 2,798,403 45,251,409 3,597 14,734,844 34,208,250 18,229,906 1,163,207 47,221,534 8,283,051 16,978,514 11,266,713 Interest and dividends receivable 2(a) 233, , ,930 4,588,156 6,880, ,183 1,273, ,538 5,429,969 16,736, ,857 Receivable for investments sold 2(a) 1,088,774 6,476, , ,837* 111,495,904 12,339,395 1,040,402 6,230,392 Receivable for Fund shares subscribed 2(a) 3,163,146 6,954,166 20,180, ,159 76,536,602 2,350,172 79,613,942 1,761,296 1,059, ,453,260 11,773,528 gain on: Futures contracts 2(c) 439, ,749 Forward foreign exchange contracts 2(c) 285,952 1,829,069 3,837,791 4,383,175 5,824,289 79,620 Market value of swaps 2(c) 98,616 Market value of purchased options/swaptions 2(c) 6 13 Other assets 2(a,c) 2, ,047 7, , ,155 4,174 25,622 Total assets 400,130, ,937, ,274, ,123,298 6,711,903, ,207,375 8,830,096, ,254, ,100,022 16,982,435, ,487,981 Liabilities Cash owed to bank 239, ,108 1,726,365 2,201,722 Income distribution payable 2(a) 19, ,413 Payable for investments purchased 2(a) 859,062 35,758,295 4,372,884 30,173, ,146 3,744,484 4,059,375 13,858,633 34,627 18,537,469 Payable for Fund shares redeemed 2(a) 1,627,128 5,487,908 13,466, ,766 30,442,815 1,758,440 56,109,750 9,653,159 2,217,158 89,624,842 5,342,768 loss on: Futures contracts 2(c) Forward foreign exchange contracts 2(c) 1,584,844 Market value of swaps 2(c) 2,360,271 Market value of written options/swaptions 2(c) 400,207 Other liabilities 504,077 1,004, , ,169 9,349, ,601 13,730, , ,413 27,751, ,024 Total liabilities 2,990,267 42,250,965 18,589,904 31,187,311 40,643,663 5,953,525 75,626,117 24,518,337 9,397, ,376,159 24,217,261 Total net assets 397,140, ,686, ,684, ,935,987 6,671,260, ,253,850 8,754,470, ,736, ,702,574 16,865,059, ,270,720 (1) New Fund launched, see Note 1, for further details. * TBAs, see Note 2, for further details. The notes on pages 251 to 259 form an integral part of these financial statements. Unaudited Interim Report and Accounts 11

14 Three Year Summary of Net Asset Values as at 28 February 2011 Currency 28 February August August August 2008 Asia Pacific Equity Income Fund Total net assets USD 45,726,039 26,588,248 Net asset value per: A Class distributing (Q) share USD A Class distributing (Q) share SGD hedged SGD A Class non-distributing share USD C Class distributing (Q) share USD C Class distributing (Q) share SGD hedged SGD Asian Dragon Fund Total net assets USD 658,936, ,236, ,614, ,724,999 Net asset value per: A Class non-distributing share USD A Class UK reporting fund share GBP B Class non-distributing share USD C Class non-distributing share USD D Class non-distributing share USD E Class non-distributing share USD Q Class non-distributing share USD X Class non-distributing share USD X Class UK reporting fund share GBP Asian Tiger Bond Fund Total net assets USD 669,905, ,146,073 88,654,115 58,596,602 Net asset value per: A Class distributing (D) share USD A Class distributing (M) share USD A Class distributing (M) share HKD hedged HKD A Class non-distributing share USD A Class non-distributing share SGD hedged SGD 9.70 B Class distributing (D) share USD B Class non-distributing share USD C Class distributing (D) share USD C Class non-distributing share USD E Class non-distributing share USD Q Class distributing (D) share USD Q Class non-distributing share USD China Fund Total net assets USD 836,697, ,172, ,665,397 33,719,460 Net asset value per: A Class non-distributing share USD A Class non-distributing share EUR hedged EUR A Class non-distributing share HKD unhedged HKD A Class non-distributing share SGD hedged SGD A Class UK reporting fund share GBP hedged GBP B Class non-distributing share USD B Class non-distributing share EUR hedged EUR B Class non-distributing share SGD hedged SGD C Class non-distributing share USD C Class non-distributing share EUR hedged EUR 9.18 C Class non-distributing share SGD hedged SGD D Class non-distributing share USD E Class non-distributing share EUR hedged EUR I Class non-distributing share USD X Class non-distributing share USD BlackRock Global Funds (BGF)

15 Three Year Summary of Net Asset Values as at 28 February 2011 continued Currency 28 February August August August 2008 Continental European Flexible Fund Total net assets EUR 585,401, ,160, ,447,154 81,436,239 Net asset value per: A Class non-distributing share EUR A Class UK reporting fund share GBP A Class UK reporting fund share GBP hedged GBP B Class non-distributing share EUR C Class non-distributing share EUR D Class non-distributing share EUR E Class non-distributing share EUR X Class non-distributing share EUR X Class UK reporting fund share GBP Emerging Europe Fund Total net assets EUR 2,569,444,997 2,247,833,875 1,599,265,741 2,868,755,801 Net asset value per: A Class distributing (A) share EUR A Class non-distributing share EUR A Class non-distributing share SGD hedged SGD A Class UK reporting fund share GBP B Class non-distributing share EUR C Class non-distributing share EUR D Class non-distributing share EUR E Class non-distributing share EUR I Class non-distributing share EUR J Class non-distributing share EUR Q Class non-distributing share EUR X Class non-distributing share EUR X Class UK reporting fund share GBP Emerging Markets Bond Fund Total net assets USD 661,018, ,612, ,060, ,927,644 Net asset value per: A Class distributing (D) share USD A Class distributing (M) share USD A Class non-distributing share USD A Class non-distributing share EUR hedged EUR B Class distributing (D) share USD B Class non-distributing share USD C Class distributing (D) share USD C Class non-distributing share USD D Class non-distributing share USD E Class non-distributing share USD Q Class distributing (D) share USD X Class non-distributing share USD X Class non-distributing share EUR hedged EUR X Class non-distributing share JPY hedged JPY 964 Emerging Markets Fund Total net assets USD 1,315,526,081 1,169,730, ,427, ,613,671 Net asset value per: A Class non-distributing share USD B Class non-distributing share USD C Class non-distributing share USD D Class non-distributing share USD E Class non-distributing share USD Q Class non-distributing share USD X Class non-distributing share USD The notes on pages 251 to 259 form an integral part of these financial statements. Unaudited Interim Report and Accounts 13

16 Three Year Summary of Net Asset Values as at 28 February 2011 continued Currency 28 February August August August 2008 Euro Bond Fund Total net assets EUR 1,125,869,890 1,138,784, ,689, ,514,157 Net asset value per: A Class distributing (A) share EUR A Class distributing (D) share EUR A Class distributing (M) share EUR A Class non-distributing share EUR A Class UK reporting fund share GBP B Class distributing (D) share EUR B Class non-distributing share EUR C Class distributing (D) share EUR C Class non-distributing share EUR D Class non-distributing share EUR E Class distributing (Q) share EUR E Class non-distributing share EUR Q Class distributing (D) share EUR Q Class non-distributing share EUR X Class non-distributing share EUR Euro Corporate Bond Fund Total net assets EUR 92,962,167 99,019,756 56,625,090 32,868,154 Net asset value per: A Class distributing (D) share EUR A Class distributing (M) share EUR A Class non-distributing share EUR B Class distributing (D) share EUR B Class non-distributing share EUR C Class non-distributing share EUR D Class non-distributing share EUR E Class distributing (Q) share EUR E Class non-distributing share EUR X Class non-distributing share EUR Euro Reserve Fund Total net assets EUR 191,466, ,714, ,523,530 Net asset value per: A Class non-distributing share EUR B Class non-distributing share EUR C Class non-distributing share EUR D Class non-distributing share EUR E Class non-distributing share EUR Q Class non-distributing share EUR Euro Short Duration Bond Fund Total net assets EUR 2,159,005,703 3,016,844, ,853, ,636,298 Net asset value per: A Class distributing (D) share EUR A Class distributing (M) share EUR A Class non-distributing share EUR A Class non-distributing share CHF hedged CHF A Class non-distributing share USD hedged USD A Class UK reporting fund share EUR A Class UK reporting fund share GBP hedged GBP A Class UK reporting fund share USD hedged USD B Class distributing (D) share EUR B Class non-distributing share EUR C Class distributing (D) share EUR C Class non-distributing share EUR D Class non-distributing share EUR D Class UK reporting fund share GBP hedged GBP E Class non-distributing share EUR Q Class non-distributing share EUR I Class non-distributing share EUR X Class non-distributing share EUR BlackRock Global Funds (BGF)

17 Three Year Summary of Net Asset Values as at 28 February 2011 continued Currency 28 February August August August 2008 Euro-Markets Fund Total net assets EUR 2,263,321,354 1,438,996,604 1,650,433,561 1,238,046,589 Net asset value per: A Class distributing (A) share EUR A Class non-distributing share EUR A Class UK reporting fund share GBP B Class non-distributing share EUR C Class non-distributing share EUR D Class non-distributing share EUR E Class non-distributing share EUR I Class non-distributing share EUR Q Class non-distributing share EUR X Class non-distributing share EUR European Enhanced Equity Yield Fund Total net assets EUR 15,386,473 16,397,971 19,132,090 26,544,072 Net asset value per: A Class distributing (Q) share EUR A Class distributing (Q) share GBP hedged GBP A Class distributing (Q) share USD hedged USD A Class non-distributing share EUR A Class non-distributing share GBP hedged GBP A Class non-distributing share USD hedged USD B Class distributing (Q) share EUR B Class distributing (Q) share GBP hedged GBP B Class distributing (Q) share USD hedged USD B Class non-distributing share EUR B Class non-distributing share USD hedged USD C Class distributing (Q) share EUR C Class distributing (Q) share GBP hedged GBP C Class distributing (Q) share USD hedged USD C Class non-distributing share EUR C Class non-distributing share GBP hedged GBP C Class non-distributing share USD hedged USD E Class non-distributing share EUR European Equity Income Fund (1) Total net assets EUR 2,410,081 Net asset value per: A Class distributing (Q) share EUR A Class non-distributing share EUR European Focus Fund Total net assets EUR 1,276,210, ,097, ,042,352 38,129,177 Net asset value per: A Class non-distributing share EUR A Class UK distributor status share GBP 9.90 B Class non-distributing share EUR C Class non-distributing share EUR D Class non-distributing share EUR E Class non-distributing share EUR I Class non-distributing share EUR X Class non-distributing share EUR (1) New Fund launched, see Note 1, for further details. The notes on pages 251 to 259 form an integral part of these financial statements. Unaudited Interim Report and Accounts 15

18 Three Year Summary of Net Asset Values as at 28 February 2011 continued Currency 28 February August August August 2008 European Fund Total net assets EUR 2,617,641,652 2,722,334,628 1,672,283, ,364,346 Net asset value per: A Class distributing (A) share EUR A Class non-distributing share EUR A Class non-distributing share USD hedged USD A Class UK reporting fund share GBP B Class non-distributing share EUR C Class non-distributing share EUR D Class non-distributing share EUR E Class non-distributing share EUR I Class non-distributing share EUR Q Class non-distributing share EUR X Class non-distributing share EUR European Growth Fund Total net assets EUR 245,933, ,100, ,627, ,130,036 Net asset value per: A Class non-distributing share EUR B Class non-distributing share EUR C Class non-distributing share EUR D Class non-distributing share EUR E Class non-distributing share EUR European Small & MidCap Opportunities Fund Total net assets EUR 408,842, ,194, ,598, ,584,072 Net asset value per: A Class non-distributing share EUR B Class non-distributing share EUR C Class non-distributing share EUR D Class non-distributing share EUR E Class non-distributing share EUR Q Class non-distributing share EUR European Value Fund Total net assets EUR 214,820, ,179, ,483, ,902,791 Net asset value per: A Class distributing (A) share EUR A Class non-distributing share EUR A Class UK reporting fund share GBP B Class non-distributing share EUR C Class non-distributing share EUR D Class non-distributing share EUR E Class non-distributing share EUR Q Class non-distributing share EUR X Class UK reporting fund share EUR Fixed Income Global Opportunities Fund Total net assets USD 104,148,170 80,066,829 59,289, ,970,917 Net asset value per: A Class distributing (Q) share USD A Class distributing (Q) share EUR hedged EUR A Class distributing (Q) share SGD hedged SGD A Class non-distributing share USD A Class non-distributing share EUR hedged EUR A Class non-distributing share PLN hedged PLN A Class non-distributing share SGD hedged SGD A Class UK distributor status share GBP 5.57 B Class distributing (Q) share USD B Class distributing (Q) share EUR hedged EUR B Class non-distributing share USD B Class non-distributing share EUR hedged EUR C Class distributing (Q) share USD C Class non-distributing share USD D Class non-distributing share EUR hedged EUR E Class non-distributing share USD E Class non-distributing share EUR hedged EUR BlackRock Global Funds (BGF)