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Form N-CSRS BLACKROCK SUSTAINABLE For: Nov 30

February 1, 2023 2:31 PM EST

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: 811-02405

Name of Fund: BlackRock Sustainable Balanced Fund, Inc.

Fund Address:    100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Sustainable Balanced Fund, Inc. 55 East 52nd Street, New York, NY 10055

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

Date of fiscal year end: 05/31/2023

Date of reporting period: 11/30/2022

 


Item 1 – Report to Stockholders

(a) The Report to Shareholders is attached herewith.

 


 

LOGO

  NOVEMBER 30, 2022

 

   2022 Semi-Annual Report
(Unaudited)

 

 

·   BlackRock Sustainable Balanced Fund, Inc.

 

 

 

Not FDIC Insured • May Lose Value • No Bank Guarantee


The Markets in Review

Dear Shareholder,

Significant economic headwinds emerged during the 12-month reporting period ended November 30, 2022, disrupting the economic recovery and strong financial markets of 2021. The U.S. economy shrank in the first half of 2022 before returning to moderate growth in the third quarter, marking a shift to a more challenging post-reopening economic environment. Changes in consumer spending patterns and a tight labor market led to elevated inflation, which reached a 40-year high before beginning to moderate. Moreover, while the foremost effect of Russia’s invasion of Ukraine has been a severe humanitarian crisis, the ongoing war continued to present challenges for both investors and policymakers.

Equity prices fell as interest rates rose, particularly weighing on relatively high-valuation growth stocks as inflation decreased the value of future cash flows and investors shifted focus to balance sheet resilience. Both large- and small-capitalization U.S. stocks fell, although declines for small-capitalization U.S. stocks were slightly steeper. Emerging market stocks and international equities from developed markets also declined significantly, pressured by rising interest rates and a strengthening U.S. dollar.

The 10-year U.S. Treasury yield rose notably during the reporting period, driving its price down, as investors reacted to higher inflation and attempted to anticipate its impact on future interest rate changes. The corporate bond market also faced inflationary headwinds, and increasing uncertainty led to higher corporate bond spreads (the difference in yield between U.S. Treasuries and similarly-dated corporate bonds).

The U.S. Federal Reserve (the “Fed”), acknowledging that inflation has been more persistent than expected, raised interest rates six times. Furthermore, the Fed wound down its bond-buying programs and is accelerating the reduction of its balance sheet. While the Fed suggested that additional rate hikes were likely, it also gave indications that the pace of increases would slow if inflation continued to subside.

The pandemic’s restructuring of the economy brought an ongoing mismatch between supply and demand, contributing to the current inflationary regime. While growth has slowed in 2022, we believe that taming inflation requires a more dramatic economic decline to bring demand back to a lower level that is more in line with the economy’s capacity. The Fed has been raising interest rates at the fastest pace in decades, and seems set to overtighten in its effort to get inflation back to target. With this in mind, we believe the possibility of a U.S. recession in the near-term is high, but this prospect has not yet been fully priced in by markets. Investors should expect a period of higher volatility as markets adjust to the new economic reality and policymakers attempt to adapt to rapidly changing conditions.

In this environment, while we favor an overweight to equities in the long-term, the market’s concerns over excessive rate hikes from central banks moderate our outlook. Rising input costs and a deteriorating economic backdrop are likely to challenge corporate earnings, so we are underweight equities overall in the near term. However, we see better opportunities in credit, where valuations are attractive and higher yields provide income opportunities. We believe that global investment-grade corporates, global inflation-linked bonds, and U.S. mortgage-backed securities offer strong opportunities for a six- to twelve-month horizon.

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

Sincerely,

 

LOGO

Rob Kapito
President, BlackRock Advisors, LLC

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

Total Returns as of November 30, 2022
     
       6-Month       12-Month  
   

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

  (0.40)%   (9.21)%
   

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

  1.98     (13.01)
   

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

  (3.59)   (10.14)
   

Emerging market equities (MSCI Emerging Markets Index)

  (8.15)   (17.43)
   

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

  0.98     1.11  
   

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

  (5.33)   (15.69)
   

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

  (4.06)   (12.84)
   

Tax-exempt municipal bonds (Bloomberg Municipal Bond Index)

  (1.43)   (8.64)
   

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

  (2.87)   (8.95)
Past performance is not an indication of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.
 

 

 

2  

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


Table of Contents

 

 

     Page  

 

 

The Markets in Review

     2  

Semi-Annual Report:

  

Fund Summary

     4  

About Fund Performance

     6  

Disclosure of Expenses

     6  

Derivative Financial Instruments

     7  

Financial Statements:

  

Schedule of Investments

     8  

Statement of Assets and Liabilities

     26  

Statement of Operations

     28  

Statements of Changes in Net Assets

     29  

Financial Highlights

     30  

Notes to Financial Statements

     35  

Statement Regarding Liquidity Risk Management Program

     45  

Additional Information

     46  

Glossary of Terms Used in this Report

     48  

 

 

LOGO

 

 

  3


Fund Summary   as of November 30, 2022     BlackRock Sustainable Balanced Fund, Inc.

 

Investment Objective

BlackRock Sustainable Balanced Fund, Inc.’s (the “Fund”) investment objective is to seek the highest total investment return through a fully managed investment policy utilizing equity, debt (including money market) and convertible securities.

Portfolio Management Commentary

How did the Fund perform?

For the six-month period ended November 30, 2022, the Fund outperformed its blended reference benchmark (60% MSCI All Country World Index/ 40% Bloomberg U.S. Aggregate Bond Index).

What factors influenced performance?

Tactical asset class positioning was the most significant contributor to relative performance, as the Fund had underweight positioning to duration as the Fed embarked on a historically rapid interest rate tightening cycle. An overweight allocation to Japanese equities through September 2022 and an overweight allocation to US equities from September through November 2022 were also additive to performance. Security selection within equities also contributed to performance, and the underlying equity strategy experienced strong performance from both environmental, social and governance (“ESG”) and sentiment insights.

Conversely, the Fund’s underlying fixed-income security selection strategy was the most notable detractor, experiencing modestly negative performance during the period. In particular, sector selection within the strategy was the primary driver of relative underperformance.

The Fund held approximately 7% in unencumbered cash at period-end, given the Fund’s underweight duration stance. A preference for cash versus fixed income contributed to relative return, given the significant sell-off in bond markets.

Describe recent portfolio activity.

The Fund entered the period with an overweight to equities, expressed via an overweight position in Japanese equities, and an underweight to U.S. duration. The Fund maintained this broad-based positioning throughout the remainder of the period, although it shifted its overweight equity exposure toward U.S. equities, as they have materially underperformed and could be better positioned for stronger performance through the end of 2022. Within its tactical asset allocation strategy, the Fund added to U.S. rates exposure in the second half of the period, reflecting the view that markets had begun to appropriately incorporate Fed rate hikes into their valuations. The Fund ended the period with a more modest overweight to equities and underweight to duration.

Describe portfolio positioning at period end.

The Fund ended the period with an overweight position in U.S. equities. This position reflected the view that the Fed has tightened financial conditions sufficiently to achieve its monetary policy mandate, therefore making these stocks better positioned for future outperformance. The Fund was underweight long-dated U.S. bonds in the belief that the long end of the yield curve hasn’t yet fully priced in rate hikes.

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

 

 

4  

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


Fund Summary   as of November 30, 2022 (continued)    BlackRock Sustainable Balanced Fund, Inc.

 

Performance

 

                Average Annual Total Returns(a)(b)  
                1 Year           5 Years           10 Years  
     

 

 

     

 

 

     

 

 

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

Institutional

    (2.03 )%        (10.33 )%       N/A         6.85      N/A         8.89      N/A  

Investor A

    (2.12       (10.54      (15.24 )%        6.58        5.43       8.59        8.00

Investor C

    (2.56       (11.27      (12.01       5.76        5.76         7.93        7.93  

Class K

    (2.00       (10.30      N/A         6.91        N/A         8.92        N/A  

Class R

    (2.30       (10.91      N/A         6.18        N/A         8.20        N/A  

60% MSCI All Country World Index/40%

Bloomberg U.S. Aggregate Bond Index(c)

    (2.93       (11.85      N/A         4.23        N/A         5.80        N/A  

Bloomberg U.S. Aggregate Bond Index(d)

    (4.06       (12.84      N/A         0.21        N/A         1.09        N/A  

MSCI All Country World Index(e)

    (2.51             (11.62      N/A               6.41        N/A               8.66        N/A  

 

  (a) 

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

 
  (b) 

Under normal circumstances, the Fund intends to invest at least 25% of its assets in equity securities and at least 25% of its assets in senior fixed income securities, such as U.S. government debt securities, corporate debt securities, and mortgage-backed and asset-backed securities. The Fund’s total returns for the period prior to April 8, 2022 are the returns of the Fund when it followed different investment strategies and investment processes under the name BlackRock Balanced Capital Fund, Inc.

 
  (c) 

A customized weighted index comprised of the returns of the MSCI All Country World Index (60%) and Bloomberg U.S. Aggregate Bond Index (40%).

 
  (d) 

Bloomberg U.S. Aggregate Bond Index, a broad-based flagship benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market.

 
  (e) 

An index that captures large- and mid-cap representation across certain developed and emerging markets.

 

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

Past performance is not an indication of future results.

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

Expense Example

 

    Actual           Hypothetical 5% Return           
 

 

 

     

 

 

      
     

Beginning
Account Value
(06/01/22)
 
 
 
    

Ending
Account Value
(11/30/22)
 
 
 
    

Expenses
Paid During
the Period
 
 
(a) 
           

Beginning
Account Value
(06/01/22)
 
 
 
    


Ending

Account Value
(11/30/22)

 

 
 

    

Expenses
Paid During
the Period
 
 
(a) 
      

Annualized
Expense
Ratio
 
 
 

Institutional

    $       1,000.00        $          979.70        $          2.52         $       1,000.00        $       1,022.52        $          2.59          0.51

Investor A

    1,000.00        978.80        3.76         1,000.00        1,021.27        3.85          0.76  

Investor C

    1,000.00        974.40        7.52         1,000.00        1,017.46        7.69          1.52  

Class K

    1,000.00        980.00        2.20         1,000.00        1,022.85        2.23          0.44  

Class R

    1,000.00        977.00        5.70               1,000.00        1,019.30        5.82          1.15  

 

  (a) 

For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period shown).

 

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

Portfolio Information

TEN LARGEST HOLDINGS

 

   

Security(a)

 

 

Percent of
Net Assets

 

 

Apple Inc.

    2.5

U.S. Treasury Notes, 2.5%, 03/31/2027

    2.2

Microsoft Corp.

    2.1

U.S. Treasury Bonds, 2.25%, 02/15/52

    1.4

U.S. Treasury Notes, 2.38%, 05/15/2029

    1.0

U.S. Treasury Bonds, 1.13%, 05/15/2040

    1.0

U.S. Treasury Notes, 1.88%, 02/15/2032

    1.0

U.S. Treasury Notes, 1.88%, 02/28/2029

    0.9

UnitedHealth Group, Inc.

    0.9

U.S. Treasury Bonds, 2.25%, 05/15/2041

    0.8
(a) 

Excludes short-term securities.

(b) 

Total investments excludes short-term securities.

(c)

Amount less than 0.1%.

PORTFOLIO COMPOSITION

 

   

Asset Type

 

 

Percent of
Total Investments(b)

 

 

Common Stocks

    59.6

Corporate Bonds

    21.6  

U.S. Treasury Obligations

    9.7  

U.S. Government Sponsored Agency Securities

    8.0  

Investment Companies

    0.8  

Preferred Securities

    0.3  

Rights

    (c) 
 

 

 

F U N D   S U M M A R Y

  5


About Fund Performance

 

Institutional and Class K Shares are not subject to any sales charge. These shares bear no ongoing distribution or service fees and are available only to certain eligible investors. Class K Shares performance shown prior to the Class K Shares inception date of January 25, 2018 is that of Institutional Shares. The performance of the Fund’s Class K Shares would be substantially similar to Institutional Shares because Class K Shares and Institutional Shares invest in the same portfolio of securities and performance would only differ to the extent that Class K Shares and Institutional Shares have different expenses. The actual returns of Class K Shares would have been higher than those of the Institutional Shares because Class K Shares have lower expenses than the Institutional Shares.

Investor A Shares are subject to a maximum initial sales charge (front-end load) of 5.25% and a service fee of 0.25% per year (but no distribution fee). Certain redemptions of these shares may be subject to a contingent deferred sales charge (“CDSC”) where no initial sales charge was paid at the time of purchase. These shares are generally available through financial intermediaries.

Investor C Shares are subject to a 1.00% CDSC if redeemed within one year of purchase. In addition, these shares are subject to a distribution fee of 0.75% per year and a service fee of 0.25% per year. These shares are generally available through financial intermediaries. These shares automatically convert to Investor A Shares after approximately eight years.

Class R Shares are not subject to any sales charge. These shares are subject to a distribution fee of 0.25% per year and a service fee of 0.25% per year. These shares are available only to certain employer-sponsored retirement plans.

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

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

Disclosure of Expenses

Shareholders of the Fund may incur the following charges: (a) transactional expenses, such as sales charges; and (b) operating expenses, including investment advisory fees, service and distribution fees, including 12b-1 fees, acquired fund fees and expenses, and other fund expenses. The expense example shown (which is based on a hypothetical investment of $1,000 invested at the beginning of the period and held through the end of the period) 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. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. In order to estimate the expenses a shareholder paid during the period covered by this report, shareholders can divide their account value by $1,000 and then multiply the result by the number corresponding to their share class under the heading entitled “Expenses Paid During the Period.”

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

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

 

 

6  

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


Derivative Financial Instruments

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

 

D E R I V A T I V E   F I N A N C I A L   I N S T R U M E N T S

  7


Schedule of Investments (unaudited)

November 30, 2022

  

BlackRock Sustainable Balanced Fund, Inc.

(Percentages shown are based on Net Assets)

 

Security   Shares      Value  

Common Stocks

 

Aerospace & Defense — 0.5%  

Aerospace Industrial Development Corp.

    58,000      $ 63,118  

BAE Systems PLC

    43,146        427,306  

Embraer SA(a)

    54,864        143,996  

HEICO Corp., Class A

    12,875        1,632,293  

Saab AB, Class B

    37,720        1,403,196  

Textron, Inc.

    43,047        3,072,695  

Thales SA

    7,709        986,175  
    

 

 

 
       7,728,779  
Air Freight & Logistics — 0.3%  

CJ Logistics Corp.(a)

    376        25,510  

Deutsche Post AG, Registered Shares

    36,951        1,476,128  

DSV A/S

    3,250        519,978  

Expeditors International of Washington, Inc.

    2,496        289,686  

Hyundai Glovis Co. Ltd.

    616        83,566  

JD Logistics, Inc.(a)(b)

    20,800        37,840  

United Parcel Service, Inc., Class B

    10,505        1,993,114  
    

 

 

 
       4,425,822  
Airlines — 0.0%  

ANA Holdings, Inc.(a)

    2,100        45,217  

Deutsche Lufthansa AG, Registered Shares(a)

    37,766        304,472  

Qantas Airways Ltd.(a)

    25,219        108,306  

Southwest Airlines Co.(a)

    7,157        285,636  
    

 

 

 
       743,631  
Auto Components — 0.1%  

BorgWarner, Inc.

    17,520        744,775  

Continental AG

    433        26,205  

Fuyao Glass Industry Group Co. Ltd., Class H(b)

    28,800        127,702  

HL Mando Co. Ltd.

    1,057        39,197  

Hyundai Mobis Co. Ltd.

    697        114,084  

Hyundai Wia Corp.

    871        40,239  

Magna International, Inc.

    800        49,262  
    

 

 

 
       1,141,464  
Automobiles — 1.5%  

Bayerische Motoren Werke AG

    30,714        2,788,792  

BYD Co. Ltd., Class A

    18,300        684,797  

BYD Co. Ltd., Class H

    21,000        534,656  

Geely Automobile Holdings Ltd.

    441,000        659,036  

General Motors Co.

    27,595        1,119,253  

Great Wall Motor Co. Ltd., Class H

    105,500        156,669  

Honda Motor Co. Ltd.

    101,200        2,466,406  

Mercedes-Benz Group AG

    98,144        6,668,221  

Mitsubishi Motors Corp.(a)

    22,700        105,906  

NIO, Inc., ADR(a)

    5,306        67,811  

Renault SA(a)

    4,708        171,298  

Tesla, Inc.(a)

    34,589        6,734,478  

Volvo Car AB, Class B(a)

    8,856        44,377  

XPeng, Inc., ADR(a)(c)

    4,145        44,807  

Yadea Group Holdings Ltd.(b)

    70,000        132,804  
    

 

 

 
       22,379,311  
Banks — 3.3%  

Australia & New Zealand Banking Group Ltd.

    64,659        1,091,750  

Banco Bilbao Vizcaya Argentaria SA

    387,999        2,286,495  

Banco do Brasil SA

    34,680        236,776  

Bancolombia SA

    6,422        53,206  

Bank Central Asia Tbk PT

    2,372,600        1,409,511  

Bank Negara Indonesia Persero Tbk PT

    213,100        134,997  

Bank of America Corp.

    84,660        3,204,381  

Bank of Nova Scotia

    124,850        6,513,752  

Bank Polska Kasa Opieki SA

    9,895        189,273  
Security   Shares      Value  

Banks (continued)

 

Bank Rakyat Indonesia Persero Tbk PT

    1,229,700      $ 391,183  

Barclays PLC

    242,608        474,559  

BNK Financial Group, Inc.

    3,411        19,329  

Chang Hwa Commercial Bank Ltd.

    45,000        25,627  

China Merchants Bank Co. Ltd., Class H

    100,500        510,445  

Citigroup, Inc.

    115,246        5,579,059  

Credicorp Ltd.

    1,947        298,962  

CTBC Financial Holding Co. Ltd.

    50,000        37,560  

E.Sun Financial Holding Co. Ltd.

    141,000        113,915  

East West Bancorp, Inc.

    400        28,084  

Erste Group Bank AG

    5,046        157,997  

First Financial Holding Co. Ltd.

    37,000        31,582  

Grupo Financiero Banorte SAB de CV, Class O

    81,680        655,548  

Hana Financial Group, Inc.

    4,797        164,067  

Industrial & Commercial Bank of China Ltd., Class H

    693,000        347,331  

Japan Post Bank Co. Ltd.

    22,300        170,460  

JPMorgan Chase & Co.

    17,716        2,447,997  

KakaoBank Corp.(a)

    3,365        65,284  

KB Financial Group, Inc.

    4,915        195,164  

KeyCorp.

    35,226        662,601  

Lloyds Banking Group PLC

    44,256        25,253  

Mediobanca Banca di Credito Finanziario SpA

    37,774        365,043  

National Australia Bank Ltd.

    99,199        2,135,154  

NatWest Group PLC

    354,566        1,127,630  

PNC Financial Services Group, Inc.

    1,047        176,168  

Postal Savings Bank of China Co. Ltd., Class H(b)

    51,000        30,843  

Royal Bank of Canada

    61,089        6,075,521  

Shanghai Commercial & Savings Bank Ltd.

    15,000        24,786  

Shinhan Financial Group Co. Ltd.

    2,859        82,883  

Société Générale SA

    7,849        197,552  

SVB Financial Group(a)

    609        141,154  

Swedbank AB, A Shares

    1,091        17,754  

Taiwan Cooperative Financial Holding Co. Ltd.

    108,000        93,780  

Toronto-Dominion Bank

    21,183        1,409,890  

Truist Financial Corp.

    1,237        57,904  

U.S. Bancorp

    105,581        4,792,322  

UniCredit SpA

    95,893        1,309,700  

Wells Fargo & Co.

    12,247        587,244  

Westpac Banking Corp.

    315,380        5,121,748  
    

 

 

 
       51,269,224  
Beverages — 1.9%  

Ambev SA

    97,043        297,150  

Arca Continental SAB de CV

    15,516        129,153  

Brown-Forman Corp., Class B, NVS

    32,616        2,381,620  

Budweiser Brewing Co. APAC Ltd.(b)

    306,100        887,960  

China Resources Beer Holdings Co. Ltd.

    28,000        194,019  

Coca-Cola Co.

    150,744        9,588,826  

Coca-Cola Europacific Partners PLC

    26,846        1,425,254  

Coca-Cola Femsa SAB de CV

    42,908        293,244  

Davide Campari-Milano NV

    74,816        788,508  

Fomento Economico Mexicano SAB de CV

    44,089        351,862  

Heineken NV

    4,678        433,248  

PepsiCo, Inc.

    52,211        9,685,663  

Pernod Ricard SA

    13,820        2,741,692  

Remy Cointreau SA

    483        83,593  

Suntory Beverage & Food Ltd.

    11,100        378,263  

Tsingtao Brewery Co. Ltd., Class H

    6,000        56,799  
    

 

 

 
           29,716,854  
Biotechnology — 1.0%  

3SBio, Inc.(b)

    312,000        330,974  

AbbVie, Inc.

    3,003        484,023  
 

 

 

8  

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


Schedule of Investments (unaudited) (continued)

November 30, 2022

  

BlackRock Sustainable Balanced Fund, Inc.

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

Biotechnology (continued)

 

Akeso, Inc., Class B(a)(b)

    7,000     $ 30,639  

Alkermes PLC(a)

    6,343       157,180  

Amgen, Inc.

    9,453       2,707,339  

BeiGene Ltd.(a)

    2,500       37,170  

BeiGene Ltd., ADR(a)

    1,704       326,504  

Biogen, Inc.(a)

    3,581       1,092,814  

BioMarin Pharmaceutical, Inc.(a)

    7,731       780,676  

Celltrion, Inc.

    441       59,784  

CSL Ltd.

    4,850       996,474  

Exelixis, Inc.(a)

    14,340       244,927  

Genmab A/S(a)

    2,036       943,472  

Gilead Sciences, Inc.

    23,799       2,090,266  

Incyte Corp.(a)

    8,355       665,643  

Innovent Biologics, Inc.(a)(b)

    63,000       254,414  

Legend Biotech Corp., ADR(a)

    3,792       195,326  

Moderna, Inc.(a)

    2,505       440,655  

PharmaEngine, Inc.

    13,000       59,035  

PharmaEssentia Corp.(a)

    1,000       17,304  

Regeneron Pharmaceuticals, Inc.(a)

    1,389       1,044,111  

Seagen, Inc.(a)

    328       39,816  

Shanghai Junshi Biosciences Co. Ltd.,
Class H(a)(b)(c)

    21,400       95,466  

United Therapeutics Corp.(a)

    1,598       447,264  

Vertex Pharmaceuticals, Inc.(a)

    5,180       1,638,952  
   

 

 

 
      15,180,228  
Building Products — 0.2%            

Belimo Holding AG, Registered Shares

    750       346,861  

Johnson Controls International PLC

    12,654       840,732  

Lixil Corp.

    8,400       130,426  

Owens Corning

    24,661       2,190,883  

ROCKWOOL A/S, B Shares

    112       24,594  

Trane Technologies PLC

    2,006       357,910  
   

 

 

 
      3,891,406  
Capital Markets — 1.1%            

B3 SA - Brasil Bolsa Balcao

    16,883       41,513  

Bank of New York Mellon Corp.

    110,792       5,085,353  

CME Group, Inc.

    2,732       482,198  

Deutsche Bank AG, Registered Shares

    177,895       1,890,728  

Deutsche Boerse AG

    2,788       512,363  

Haitong Securities Co. Ltd., Class H

    34,400       21,281  

Macquarie Group Ltd.

    29,261       3,598,563  

S&P Global, Inc.

    9,897       3,491,661  

UBS Group AG, Registered Shares

    115,191       2,125,584  
   

 

 

 
      17,249,244  
Chemicals — 0.9%            

CNGR Advanced Material Co. Ltd., Class A

    6,200       66,386  

Croda International PLC

    6,711       554,968  

DuPont de Nemours, Inc.

    21,700       1,530,067  

Evonik Industries AG

    2,245       44,253  

Givaudan SA, Registered Shares

    1,172       3,962,152  

Hanwha Solutions Corp.(a)

    12,172       481,793  

Kolon Industries, Inc.

    826       29,245  

Koninklijke DSM NV

    2,149       278,732  

LANXESS AG

    517       20,772  

LG Chem Ltd.

    1,000       570,832  

Linde PLC

    601       202,224  

Methanex Corp.

    1,407       55,008  

Mitsubishi Gas Chemical Co., Inc.

    1,300       18,726  

Nitto Denko Corp.

    7,100       448,584  

Novozymes A/S, B Shares

    34,208       1,989,129  

Qinghai Salt Lake Industry Co. Ltd., Class A(a)

    9,000       32,209  
Security   Shares     Value  

Chemicals (continued)

 

Shanghai Putailai New Energy Technology Co. Ltd., Class A

    29,800     $ 234,029  

Sherwin-Williams Co.

    133       33,141  

Sika AG, Registered Shares

    7,615       1,946,095  

SK IE Technology Co. Ltd.(a)(b)

    895       45,814  

SKC Co. Ltd.

    344       29,838  

Solvay SA

    614       60,906  

Sumitomo Chemical Co. Ltd.

    175,400       639,480  

Wacker Chemie AG

    2,691       345,619  
   

 

 

 
      13,620,002  
Commercial Services & Supplies — 0.1%            

Cintas Corp.

    81       37,404  

S-1 Corp.

    656       32,086  

Tetra Tech, Inc.

    6,265       968,507  

TOMRA Systems ASA

    1,311       25,168  
   

 

 

 
      1,063,165  
Communications Equipment — 0.5%            

Accton Technology Corp.

    12,000       106,779  

BYD Electronic International Co. Ltd.

    11,500       38,337  

Cisco Systems, Inc.

    118,039       5,868,899  

Juniper Networks, Inc.

    20,391       677,797  

Nokia Oyj

    80,361       395,931  

Sercomm Corp.

    22,000       60,214  

Telefonaktiebolaget LM Ericsson, B Shares

    43,245       272,948  

Wistron NeWeb Corp.

    30,000       84,804  

Yealink Network Technology Corp. Ltd., Class A

    3,600       32,245  

ZTE Corp., Class A

    6,700       23,258  

ZTE Corp., Class H

    86,800       190,160  
   

 

 

 
      7,751,372  
Construction & Engineering — 0.5%            

Ackermans & van Haaren NV

    7,162       1,138,369  

AECOM

    44,948       3,820,580  

Bouygues SA

    9,673       299,149  

COMSYS Holdings Corp

    8,300       149,619  

CTCI Corp.

    67,000       88,514  

Daewoo Engineering & Construction Co. Ltd.(a)

    33,024       129,697  

DL E&C Co. Ltd.

    1,022       33,007  

Eiffage SA

    3,550       349,547  

EXEO Group, Inc.

    20,900       324,413  

GS Engineering & Construction Corp.

    1,578       28,540  

Hyundai Engineering & Construction Co. Ltd.

    2,055       64,957  

JGC Holdings Corp.

    4,500       62,417  

Kajima Corp.

    3,400       38,472  

Obayashi Corp.

    38,100       284,838  

Shimizu Corp.

    38,800       209,191  

Stantec, Inc.

    1,035       51,206  

Vinci SA

    8,048       812,573  
   

 

 

 
      7,885,089  
Construction Materials — 0.1%            

Holcim AG

    15,050       786,209  

POSCO Chemical Co. Ltd.

    179       30,235  

Taiwan Cement Corp.

    22,000       24,252  
   

 

 

 
      840,696  
Consumer Finance — 0.8%            

Ally Financial, Inc.

    70,946       1,916,251  

American Express Co.

    44,228       6,969,891  

Capital One Financial Corp.

    10,857       1,120,877  

Lufax Holding Ltd., ADR

    6,549       12,181  

Synchrony Financial

    49,354       1,854,723  
   

 

 

 
      11,873,923  
 

 

 

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

  9


Schedule of Investments (unaudited) (continued)

November 30, 2022

  

BlackRock Sustainable Balanced Fund, Inc.

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

Containers & Packaging — 0.1%

 

International Paper Co.

    2,607     $ 96,772  

Westrock Co.

    29,228       1,108,326  
   

 

 

 
      1,205,098  
Distributors — 0.0%            

LKQ Corp.

    600       32,598  
   

 

 

 
Diversified Consumer Services — 0.1%            

Benesse Holdings, Inc.

    6,100       88,691  

Cogna Educacao(a)

    164,550       70,394  

H&R Block, Inc.

    39,458       1,724,709  

YDUQS Participacoes SA

    30,184       67,414  
   

 

 

 
      1,951,208  
Diversified Financial Services — 0.5%            

Berkshire Hathaway, Inc., Class B(a)

    13,480       4,294,728  

Chailease Holding Co. Ltd.

    13,000       85,805  

FirstRand Ltd.

    49,744       193,329  

Groupe Bruxelles Lambert NV

    8,385       676,794  

Investor AB, A Shares

    4,636       89,265  

Investor AB, B Shares

    64,035       1,191,747  

Voya Financial, Inc.

    7,137       470,899  
   

 

 

 
      7,002,567  
Diversified Telecommunication Services — 0.5%  

AT&T Inc.

    101,100       1,949,208  

Bezeq The Israeli Telecommunication Corp. Ltd.

    211,967       394,246  

Liberty Global PLC, Class C(a)

    1,890       39,085  

Nippon Telegraph & Telephone Corp.

    183,800       5,096,592  

Telkom Indonesia Persero Tbk PT

    1,332,600       343,777  

Telstra Group Ltd.

    15,812       42,901  

United Internet AG, Registered Shares

    3,425       72,814  

Verizon Communications, Inc.

    7,327       285,607  
   

 

 

 
      8,224,230  
Electric Utilities — 1.0%            

Acciona SA

    3,598       703,788  

Centrais Eletricas Brasileiras SA

    14,425       129,341  

Contact Energy Ltd.

    26,547       125,952  

CPFL Energia SA

    35,121       232,680  

Edison International

    85,950       5,729,427  

Electricite de France SA

    29,596       370,411  

Elia Group SA/NV

    5,997       854,504  

Enel SpA

    434,597       2,344,558  

Energisa SA

    11,257       93,516  

Hydro One Ltd.(b)

    128,268       3,587,289  

Light SA

    108,845       119,346  

NextEra Energy, Inc.

    2,618       221,745  

SSE PLC

    14,603       302,874  

Terna - Rete Elettrica Nazionale

    6,798       52,072  

Transmissora Alianca de Energia Eletrica SA

    15,733       105,900  
   

 

 

 
      14,973,403  
Electrical Equipment — 0.4%            

ABB Ltd., Registered Shares

    40,134       1,261,339  

Bizlink Holding, Inc.

    24,000       197,283  

Chung-Hsin Electric & Machinery Manufacturing Corp.

    16,000       30,834  

Contemporary Amperex Technology Co. Ltd., Class A

    46,200       2,530,987  

Eaton Corp. PLC

    356       58,188  

Ecopro BM Co. Ltd.

    710       62,913  

Eve Energy Co. Ltd., Class A

    36,500       432,562  

Gotion High-tech Co. Ltd., Class A

    3,900       17,714  

Hyundai Electric & Energy System Co. Ltd.(a)

    729       23,607  

Legrand SA

    7,865       640,847  
Security   Shares     Value  

Electrical Equipment (continued)

 

LG Energy Solution Ltd.(a)

    1,082     $ 489,461  

LS Corp.

    495       28,629  

LS Electric Co. Ltd.

    1,569       69,566  

Siemens Energy AG

    3,744       62,884  

Signify NV(b)

    11,016       376,248  

SPG Co. Ltd.

    1,766       23,930  

Sunwoda Electronic Co. Ltd., Class A

    42,200       145,859  

Suzhou Maxwell Technologies Co. Ltd., Class A

    300       18,168  

Voltronic Power Technology Corp.

    1,000       56,754  

WEG SA

    5,701       42,724  

Xinjiang Goldwind Science & Technology Co. Ltd., Class H

    41,200       44,654  
   

 

 

 
      6,615,151  
Electronic Equipment, Instruments & Components — 0.4%  

Azbil Corp.

    1,600       49,238  

Chroma ATE, Inc.

    22,000       143,528  

Compeq Manufacturing Co. Ltd.

    46,000       74,936  

Delta Electronics, Inc.

    98,000       969,094  

E Ink Holdings, Inc.

    7,000       41,973  

Flex Ltd.(a)

    3,077       67,632  

FLEXium Interconnect, Inc.

    18,000       62,877  

Genius Electronic Optical Co. Ltd.

    7,000       90,971  

Horiba Ltd.

    2,000       91,925  

KH Vatec Co. Ltd.

    2,585       29,894  

Largan Precision Co. Ltd.

    3,000       226,037  

LG Innotek Co. Ltd.

    527       127,058  

Lotes Co. Ltd.

    2,000       56,643  

Luxshare Precision Industry Co. Ltd., Class A

    4,300       19,004  

Nan Ya Printed Circuit Board Corp.

    6,000       53,728  

Omron Corp.

    38,800       2,018,036  

Posiflex Technology, Inc.

    5,000       20,152  

Primax Electronics Ltd.

    52,000       98,123  

Samsung SDI Co. Ltd.

    477       269,280  

Shimadzu Corp.

    4,300       132,159  

Simplo Technology Co. Ltd.

    20,000       198,191  

Sinbon Electronics Co. Ltd.

    4,000       35,334  

Spectris PLC

    6,235       241,397  

Sunny Optical Technology Group Co. Ltd.

    2,400       28,572  

TE Connectivity Ltd.

    4,738       597,557  

Tong Hsing Electronic Industries Ltd.

    6,000       38,396  

Tripod Technology Corp.

    6,000       18,942  

Xiamen Faratronic Co. Ltd., Class A

    700       15,620  
   

 

 

 
      5,816,297  
Energy Equipment & Services — 0.0%            

Baker Hughes Co.

    11,655       338,228  

Patterson-UTI Energy, Inc.

    2,218       39,813  

Worley Ltd.

    3,439       34,880  
   

 

 

 
      412,921  
Entertainment — 0.2%            

CJ ENM Co. Ltd.

    257       16,592  

Krafton, Inc.(a)

    478       84,132  

NCSoft Corp.

    348       126,065  

NetEase, Inc.

    1,900       27,471  

Studio Dragon Corp.(a)

    800       44,738  

Walt Disney Co.(a)

    22,427       2,194,931  
   

 

 

 
      2,493,929  
Equity Real Estate Investment Trusts (REITs) — 0.8%  

Brixmor Property Group, Inc.

    43,841       1,016,234  

Crown Castle, Inc.

    910       128,701  

Digital Realty Trust, Inc.

    1,273       143,162  

Equinix, Inc.

    4,475       3,090,659  
 

 

 

10  

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


Schedule of Investments (unaudited) (continued)

November 30, 2022

  

BlackRock Sustainable Balanced Fund, Inc.

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

Equity Real Estate Investment Trusts (REITs) (continued)

 

Equity Residential

    1,418     $ 91,971  

Klepierre SA

    8,294       192,191  

Prologis, Inc.

    31,397       3,698,253  

RLJ Lodging Trust

    17       206  

Segro PLC

    131,233       1,269,985  

Simon Property Group, Inc.

    10,128       1,209,688  

Stockland

    450,337       1,175,774  

Tritax Big Box REIT PLC

    26,791       46,824  

Warehouses De Pauw CVA

    4,345       116,099  
   

 

 

 
      12,179,747  
Food & Staples Retailing — 0.6%  

Cosmos Pharmaceutical Corp.

    2,400       244,655  

Costco Wholesale Corp.

    6,801       3,667,439  

Lawson, Inc.

    36,400       1,303,722  

Marks & Spencer Group PLC(a)

    74,188       108,279  

Raia Drogasil SA

    6,791       30,046  

Sendas Distribuidora SA

    32,701       124,078  

Shoprite Holdings Ltd.

    11,905       175,237  

Tesco PLC

    42,777       117,861  

Tsuruha Holdings, Inc.

    51,400       3,328,448  

Walmart, Inc.

    1,682       256,370  
   

 

 

 
      9,356,135  
Food Products — 0.8%  

Associated British Foods PLC

    61,851       1,186,224  

BRF SA(a)

    7,708       13,977  

Chocoladefabriken Lindt & Spruengli AG

    76       799,468  

Gruma SAB de CV, Class B

    4,042       50,040  

Grupo Bimbo SAB de CV, Series A

    28,229       119,784  

Kellogg Co.

    978       71,345  

Kuala Lumpur Kepong Bhd

    21,200       99,792  

Leroy Seafood Group ASA

    8,542       41,688  

M Dias Branco SA

    2,766       20,926  

Marfrig Global Foods SA

    12,309       20,873  

Minerva SA

    14,766       35,426  

Mondelez International, Inc., Class A

    71,334       4,822,892  

Mowi ASA

    3,092       48,454  

Nestlé SA, Registered Shares

    11,115       1,322,947  

Nissin Foods Holdings Co. Ltd.

    7,900       602,020  

Nomad Foods Ltd.(a)

    25,535       446,607  

Sao Martinho SA

    3,758       20,704  

Tingyi Cayman Islands Holding Corp.

    66,000       107,946  

Tongwei Co. Ltd., Class A

    4,000       24,435  

Tyson Foods, Inc., Class A

    31,430       2,083,180  

Uni-President China Holdings Ltd.

    131,000       114,987  

Want Want China Holdings Ltd.

    47,000       31,904  
   

 

 

 
      12,085,619  
Gas Utilities — 0.0%  

ENN Energy Holdings Ltd.

    1,900       26,925  

Korea Gas Corp.

    710       18,949  

Perusahaan Gas Negara Tbk PT

    1,340,900       161,382  
   

 

 

 
      207,256  
Health Care Equipment & Supplies — 1.4%  

Abbott Laboratories

    26,174       2,815,799  

Align Technology, Inc.(a)

    3,820       751,241  

Becton Dickinson and Co.

    3,258       812,350  

Boston Scientific Corp.(a)

    153,627       6,954,694  

Dentium Co. Ltd.

    565       38,315  

Edwards Lifesciences Corp.(a)

    30,735       2,374,279  

Enovis Corp.(a)

    390       21,111  

IDEXX Laboratories, Inc.(a)

    252       107,319  

Koninklijke Philips NV

    18,205       272,795  
Security   Shares     Value  

Health Care Equipment & Supplies (continued)

 

Medtronic PLC

    91,326     $ 7,218,407  

Osstem Implant Co. Ltd.

    300       25,651  
   

 

 

 
      21,391,961  
Health Care Providers & Services — 1.8%            

Alfresa Holdings Corp.

    1,900       23,134  

AmerisourceBergen Corp.

    3,862       659,205  

Cigna Corp.

    15,784       5,191,200  

CVS Health Corp.

    45,473       4,632,789  

Elevance Health, Inc.

    4,585       2,443,438  

Fleury SA

    28,436       97,319  

Humana, Inc.

    677       372,282  

Jinxin Fertility Group Ltd.(b)

    29,500       23,286  

Qualicorp Consultoria e Corretora de Seguros SA

    26,605       31,376  

Shanghai Pharmaceuticals Holding Co. Ltd., Class H

    55,700       92,879  

Sinopharm Group Co. Ltd., Class H

    64,000       151,835  

UnitedHealth Group, Inc.

    24,636       13,494,616  
   

 

 

 
      27,213,359  
Hotels, Restaurants & Leisure — 1.0%  

Alsea SAB de CV(a)

    184,333       370,691  

Aristocrat Leisure Ltd.

    205,798       4,945,417  

Booking Holdings, Inc.(a)

    1,112       2,312,348  

Boyd Gaming Corp.

    2,018       123,764  

Chipotle Mexican Grill, Inc.(a)

    271       440,906  

Expedia Group, Inc.(a)

    5,734       612,621  

Flight Centre Travel Group Ltd.(a)

    20,614       228,381  

InterContinental Hotels Group PLC

    9,274       539,776  

International Game Technology PLC

    8,722       214,038  

Travel + Leisure Co.

    89,709       3,486,989  

Trip.com Group Ltd.(a)

    750       23,736  

Trip.com Group Ltd., ADR(a)

    14,144       451,901  

Xiabuxiabu Catering Management China Holdings Co. Ltd.(b)

    45,000       44,653  

Yum China Holdings, Inc.

    20,415       1,125,275  

Zamp SA(a)

    10,484       11,900  
   

 

 

 
      14,932,396  
Household Durables — 0.1%  

Barratt Developments PLC

    145,704       704,592  

Bellway PLC

    2,427       58,974  

Garmin Ltd.

    1,748       162,546  

Mohawk Industries, Inc.(a)

    1,393       141,153  

Taylor Wimpey PLC

    20,611       25,979  

Whirlpool Corp.

    4,918       720,634  
   

 

 

 
      1,813,878  
Household Products — 0.7%  

Colgate-Palmolive Co.

    84,360       6,536,213  

Procter & Gamble Co.

    29,313       4,372,327  
   

 

 

 
      10,908,540  
Independent Power and Renewable Electricity Producers — 0.1%  

Atlantica Sustainable Infrastructure PLC

    11,504       320,961  

Auren Energia SA

    31,539       84,297  

China Datang Corp. Renewable Power Co. Ltd., Class H

    58,000       16,800  

Clearway Energy, Inc., Class C

    3,548       125,741  

Drax Group PLC

    50,444       373,189  

Meridian Energy Ltd.

    6,589       20,451  
   

 

 

 
      941,439  
Industrial Conglomerates — 1.1%  

3M Co.

    25,973       3,271,819  

Doosan Co. Ltd.

    717       54,057  
 

 

 

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

  11


Schedule of Investments (unaudited) (continued)

November 30, 2022

  

BlackRock Sustainable Balanced Fund, Inc.

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

Industrial Conglomerates (continued)

 

General Electric Co.

    45,684     $ 3,927,454  

Honeywell International, Inc.

    8,333       1,829,510  

Samsung C&T Corp.

    1,024       96,059  

Siemens AG, Registered Shares

    46,502       6,449,123  

Smiths Group PLC

    41,496       798,645  
   

 

 

 
      16,426,667  
Insurance — 1.9%            

Ageas SA/NV

    4,609       186,627  

AIA Group Ltd.

    681,200       6,917,320  

Aon PLC, Class A

    1,317       406,005  

AXA SA

    20,362       575,605  

Brighthouse Financial, Inc.(a)

    4,894       272,792  

Cathay Financial Holding Co. Ltd.

    37,000       52,653  

Direct Line Insurance Group PLC

    44,537       112,706  

Helvetia Holding AG, Registered Shares

    407       45,771  

Hyundai Marine & Fire Insurance Co. Ltd.

    1,452       33,493  

Lincoln National Corp.

    3,730       145,246  

Manulife Financial Corp.

    230,720       4,155,927  

Marsh & McLennan Cos., Inc.

    27,871       4,826,700  

Medibank Pvt Ltd.

    29,019       57,898  

MetLife, Inc.

    84,522       6,482,837  

Ping An Insurance Group Co. of China Ltd., H Shares

    110,500       682,228  

Sampo Oyj, A Shares

    2,358       119,417  

Swiss Life Holding AG, Registered Shares

    1,627       869,768  

T&D Holdings, Inc.

    2,600       31,609  

Talanx AG

    1,250       55,572  

Travelers Cos., Inc.

    13,903       2,638,928  

Unum Group

    1,353       57,070  
   

 

 

 
      28,726,172  
Interactive Media & Services — 2.1%            

AfreecaTV Co. Ltd.

    2,616       175,034  

Alphabet, Inc., Class A(a)

    111,750       11,285,632  

Alphabet, Inc., Class C, NVS(a)

    82,596       8,379,364  

Auto Trader Group PLC(b)

    156,747       1,082,073  

Baidu, Inc., Class A(a)

    67,050       904,882  

JOYY, Inc., ADR

    3,231       98,416  

Kakao Corp.

    5,126       224,911  

Kuaishou Technology(a)(b)

    46,100       347,331  

Meta Platforms, Inc., Class A(a)

    37,731       4,456,031  

NAVER Corp.

    283       41,138  

REA Group Ltd.

    1,167       99,432  

Rightmove PLC

    9,517       64,580  

Scout24 SE(b)

    8,428       462,597  

Tencent Holdings Ltd.

    114,700       4,337,531  
   

 

 

 
      31,958,952  
Internet & Direct Marketing Retail — 1.1%            

Alibaba Group Holding Ltd.(a)

    285,500       3,107,143  

Amazon.com, Inc.(a)

    104,704       10,108,124  

Coupang, Inc.(a)

    17,342       337,822  

eBay, Inc.

    57,431       2,609,665  

JD.com, Inc., Class A

    20,850       595,221  

Meituan, Class B(a)(b)

    30,900       666,113  

momo.com, Inc.

    2,000       39,457  

Ping An Healthcare and Technology Co. Ltd.(a)(b)

    5,600       14,236  

ZOZO, Inc.

    2,300       58,067  
   

 

 

 
      17,535,848  
IT Services — 2.3%            

Accenture PLC, Class A

    29,084       8,752,248  

Capgemini SE

    796       143,915  

Cielo SA

    233,833       214,937  
Security   Shares     Value  

IT Services (continued)

 

Cognizant Technology Solutions Corp., Class A

    97,338     $ 6,055,397  

DXC Technology Co.(a)

    1,572       46,641  

EPAM Systems, Inc.(a)

    832       306,659  

Gartner, Inc.(a)

    11,596       4,062,891  

Genpact Ltd.

    1,838       84,750  

Mastercard, Inc., Class A

    10,826       3,858,386  

Nomura Research Institute Ltd.

    41,500       919,588  

Otsuka Corp.

    10,800       363,507  

Paychex, Inc.

    6,208       769,978  

Samsung SDS Co. Ltd.

    816       79,733  

StoneCo Ltd., Class A(a)

    14,096       164,641  

Visa, Inc., Class A

    43,006       9,332,302  

Wiwynn Corp.

    4,000       115,432  
   

 

 

 
      35,271,005  
Leisure Products — 0.0%            

Sankyo Co. Ltd.

    1,400       54,779  

Sega Sammy Holdings, Inc.

    35,200       469,412  
   

 

 

 
      524,191  
Life Sciences Tools & Services — 1.1%            

Agilent Technologies, Inc.

    40,161       6,224,152  

Danaher Corp.

    11,063       3,024,735  

Mettler-Toledo International, Inc.(a)

    1,276       1,875,158  

Pharmaron Beijing Co. Ltd., Class H(b)

    2,850       16,489  

Thermo Fisher Scientific, Inc.

    7,896       4,423,497  

West Pharmaceutical Services, Inc.

    183       42,943  

WuXi AppTec Co. Ltd., H Shares(b)

    22,200       223,851  

Wuxi Biologics Cayman, Inc.(a)(b)

    69,500       455,485  
   

 

 

 
      16,286,310  
Machinery — 0.5%            

Amada Co. Ltd.

    203,200       1,638,180  

ANDRITZ AG

    15,820       865,782  

Daifuku Co. Ltd.

    1,300       67,678  

DMG Mori Co. Ltd.

    5,900       79,691  

Doosan Bobcat, Inc.

    831       22,746  

Ebara Corp.

    6,500       252,719  

Epiroc AB, Class A

    7,800       150,197  

Hiwin Technologies Corp.

    7,000       42,723  

Hyundai Construction Equipment Co. Ltd.

    1,451       66,972  

Kinik Co.

    7,000       25,872  

Otis Worldwide Corp.

    1,791       139,859  

PACCAR, Inc.

    6,188       655,371  

Rational AG

    340       213,623  

Snap-on, Inc.

    367       88,300  

Spirax-Sarco Engineering PLC

    1,760       240,366  

Techtronic Industries Co. Ltd.

    9,000       109,711  

Timken Co.

    1,072       81,451  

Toyota Industries Corp.

    800       45,894  

Trelleborg AB, B Shares

    2,017       49,374  

Valmet Oyj

    21,920       566,603  

VAT Group AG(b)

    1,237       346,700  

Wartsila Oyj Abp

    52,006       450,497  

Xylem, Inc.

    8,895       999,353  

Yaskawa Electric Corp.

    9,200       302,776  
   

 

 

 
      7,502,438  
Marine — 0.2%            

AP Moller - Maersk A/S, Class A

    165       350,306  

AP Moller - Maersk A/S, Class B

    836       1,812,412  

Evergreen Marine Corp. Taiwan Ltd.

    26,000       139,588  

Kuehne + Nagel International AG, Registered Shares

    1,577       383,115  

Orient Overseas International Ltd.

    1,500       28,502  
 

 

 

12  

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


Schedule of Investments (unaudited) (continued)

November 30, 2022

  

BlackRock Sustainable Balanced Fund, Inc.

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

Marine (continued)

 

Pan Ocean Co. Ltd.

    7,293     $ 30,339  

Wisdom Marine Lines Co. Ltd.

    18,000       36,485  

ZIM Integrated Shipping Services Ltd.

    2,730       57,385  
   

 

 

 
      2,838,132  
Media — 0.8%            

Cheil Worldwide, Inc.

    1,203       22,313  

Comcast Corp., Class A

    153,629       5,628,966  

Fox Corp., Class A, NVS

    188,924       6,130,584  

Fox Corp., Class B

    12,069       368,346  

Fuji Media Holdings, Inc.

    2,700       21,255  

ProSiebenSat.1 Media SE

    18,162       165,029  
   

 

 

 
      12,336,493  
Metals & Mining — 0.9%            

Aluminum Corp. of China Ltd., Class H

    134,000       57,307  

Anglo American PLC

    46,986       1,953,448  

Anglo American PLC

    41,357       1,679,001  

APERAM SA

    829       26,316  

ArcelorMittal SA

    31,844       873,134  

Aurubis AG

    1,932       155,105  

Boliden AB

    2,699       101,950  

China Hongqiao Group Ltd.

    40,000       37,803  

Cia Brasileira de Aluminio

    7,679       18,024  

CMOC Group Ltd., Class H

    561,000       262,818  

CSN Mineracao SA

    120,209       88,952  

Dongkuk Steel Mill Co. Ltd.

    2,425       25,815  

Dowa Holdings Co. Ltd.

    1,000       33,216  

Endeavour Mining PLC

    3,487       74,009  

Ganfeng Lithium Group Co. Ltd., Class A

    83,700       966,340  

Gloria Material Technology Corp.

    25,000       27,008  

Gold Fields Ltd.

    4,991       55,420  

Henan Shenhuo Coal & Power Co. Ltd., Class A

    25,700       61,367  

Jiangxi Copper Co. Ltd., Class A

    12,800       31,479  

Jiangxi Copper Co. Ltd., Class H

    26,000       38,058  

Korea Zinc Co. Ltd.

    339       163,889  

Mitsui Mining & Smelting Co. Ltd.

    3,400       78,227  

MMG Ltd.(a)

    84,000       22,107  

Outokumpu Oyj

    11,339       57,197  

POSCO Holdings, Inc.

    1,222       279,716  

Reliance Steel & Aluminum Co.

    2,467       521,252  

Sigma Lithium Corp.(a)

    575       19,723  

South32 Ltd.

    28,030       77,854  

Southern Copper Corp.

    1,247       76,092  

thyssenkrupp AG(a)

    68,803       387,826  

Tianshan Aluminum Group Co. Ltd., Class A

    59,500       60,182  

Tibet Summit Resources Co. Ltd., Class A(a)

    54,300       176,772  

Wheaton Precious Metals Corp.

    138,788       5,416,771  

Xiamen Tungsten Co. Ltd., Class A

    38,600       117,347  

Youngy Co. Ltd., Class A(a)

    3,100       54,074  

Zhejiang Huayou Cobalt Co. Ltd., Class A

    26,400       233,590  
   

 

 

 
      14,309,189  
Multiline Retail — 0.0%            

J Front Retailing Co. Ltd.

    2,800       23,707  

Shinsegae, Inc.

    720       116,441  

Woolworths Holdings Ltd.

    7,666       29,191  
   

 

 

 
      169,339  
Multi-Utilities — 0.3%            

A2A SpA

    31,024       41,651  

Centrica PLC

    766,327       884,667  

 

Security   Shares     Value  

Multi-Utilities (continued)

 

E.ON SE

    56,420     $ 540,930  

Engie SA

    200,615       3,049,708  
   

 

 

 
      4,516,956  
Oil, Gas & Consumable Fuels — 3.2%            

Aker BP ASA

    12,054       419,362  

ARC Resources Ltd.

    62,257       924,726  

Birchcliff Energy Ltd.

    7,009       55,962  

BP PLC

    153,958       919,396  

Chevron Corp.

    59,403       10,889,164  

China Petroleum & Chemical Corp., Class H

    2,162,000       1,020,668  

Crescent Point Energy Corp.

    153,893       1,195,541  

Enbridge, Inc.

    41,707       1,722,354  

Enerplus Corp.

    19,052       354,229  

Eni SpA

    2,231       33,264  

EOG Resources, Inc.

    18,838       2,673,677  

EQT Corp.

    8,403       356,371  

Equinor ASA

    107,546       4,141,683  

Exxon Mobil Corp.

    88,571       9,861,495  

Inpex Corp.

    78,400       863,939  

Magnolia Oil & Gas Corp., Class A

    1,485       38,729  

Marathon Oil Corp.

    52,656       1,612,853  

Marathon Petroleum Corp.

    34,328       4,181,494  

Ovintiv, Inc.

    2,076       115,471  

Parex Resources, Inc.

    6,757       96,747  

PetroChina Co. Ltd., Class H

    2,842,000       1,293,202  

Petroleo Brasileiro SA

    6,033       35,168  

Pioneer Natural Resources Co.

    1,689       398,587  

Range Resources Corp.

    8,464       244,356  

Shell PLC

    2,376       69,535  

SK Innovation Co. Ltd.(a)

    329       45,521  

S-Oil Corp.

    391       25,887  

TC Energy Corp.

    40,415       1,790,681  

Tourmaline Oil Corp.

    29,154       1,774,403  

Ultrapar Participacoes SA

    60,201       161,948  

Valero Energy Corp.

    5,999       801,586  

Var Energi ASA

    24,754       91,382  

Vermilion Energy, Inc.

    7,106       140,466  

Williams Cos., Inc.

    36,446       1,264,676  
   

 

 

 
      49,614,523  
Paper & Forest Products — 0.0%            

Dexco SA

    9,578       15,356  

West Fraser Timber Co. Ltd.

    4,362       341,203  
   

 

 

 
      356,559  
Personal Products — 0.4%            

Estee Lauder Cos., Inc., Class A

    3,421       806,638  

L’Oreal SA

    1,587       596,007  

Natura & Co. Holding SA

    41,369       92,394  

Pola Orbis Holdings, Inc.

    7,300       95,875  

Unilever PLC

    83,164       4,158,295  
   

 

 

 
      5,749,209  
Pharmaceuticals — 3.1%            

Astellas Pharma, Inc.

    57,600       893,355  

AstraZeneca PLC

    789       106,784  

Bayer AG, Registered Shares

    1,463       84,908  

Bristol-Myers Squibb Co.

    100,888       8,099,289  

China Medical System Holdings Ltd.

    15,000       21,970  

CSPC Pharmaceutical Group Ltd.

    28,000       36,073  

Dechra Pharmaceuticals PLC

    640       21,137  

Eli Lilly & Co.

    9,482       3,518,581  

GSK PLC

    97,715       1,661,552  

H Lundbeck A/S

    3,188       11,780  
 

 

 

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

  13


Schedule of Investments (unaudited) (continued)

November 30, 2022

  

BlackRock Sustainable Balanced Fund, Inc.

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

Pharmaceuticals (continued)

 

Johnson & Johnson

    68,882     $ 12,260,996  

Lotus Pharmaceutical Co. Ltd.

    8,000       63,994  

Merck & Co., Inc.

    2,965       326,506  

Novartis AG, Registered Shares

    64,352       5,724,403  

Novo Nordisk A/S, Class B

    36,332       4,557,418  

Ono Pharmaceutical Co. Ltd.

    3,600       92,261  

Pfizer, Inc.

    101,911       5,108,798  

Roche Holding AG

    777       312,132  

Santen Pharmaceutical Co. Ltd.

    12,200       99,663  

Sino Biopharmaceutical Ltd.

    93,000       55,055  

Takeda Pharmaceutical Co. Ltd.

    168,500       4,954,445  

Teva Pharmaceutical Industries Ltd., ADR(a)

    41,898       367,445  
   

 

 

 
      48,378,545  
   

 

 

 
Professional Services — 0.7%  

Experian PLC

    95,086       3,364,262  

KBR, Inc.

    652       33,689  

ManpowerGroup, Inc.

    7,105       621,830  

Randstad NV

    2,203       127,605  

Recruit Holdings Co. Ltd.

    26,000       841,237  

RELX PLC

    15,165       425,241  

Robert Half International, Inc.

    16,022       1,262,213  

Teleperformance

    1,474       336,487  

Wolters Kluwer NV

    32,889       3,624,711  
   

 

 

 
      10,637,275  
Real Estate Management & Development — 0.4%  

China Resources Land Ltd.

    40,000       185,797  

City Developments Ltd.

    34,000       208,882  

Country Garden Holdings Co. Ltd.

    243,000       95,038  

Country Garden Services Holdings Co. Ltd.

    81,000       202,538  

Daiwa House Industry Co. Ltd.

    42,200       971,825  

Greentown China Holdings Ltd.

    47,000       80,782  

Jones Lang LaSalle, Inc.(a)

    1,906       320,532  

LEG Immobilien SE

    3,847       246,837  

Longfor Group Holdings Ltd.(b)

    5,000       15,234  

Mitsubishi Estate Co. Ltd.

    73,700       1,040,685  

Mitsui Fudosan Co. Ltd.

    114,100       2,313,159  

Shimao Services Holdings Ltd.(a)(b)

    49,000       17,263  

Sun Hung Kai Properties Ltd.

    8,500       102,538  

Zillow Group, Inc., Class A(a)

    582       21,767  

Zillow Group, Inc., Class C, NVS(a)

    6,214       236,008  
   

 

 

 
      6,058,885  
Road & Rail — 0.0%  

Knight-Swift Transportation Holdings, Inc.

    4,547       252,040  

Localiza Rent a Car SA

    37,363       431,492  

Movida Participacoes SA

    7,152       12,156  
   

 

 

 
      695,688  
Semiconductors & Semiconductor Equipment — 2.6%  

Advantest Corp.

    11,600       789,527  

Analog Devices, Inc.

    39,591       6,806,089  

Applied Materials, Inc.

    6,209       680,506  

ASE Technology Holding Co. Ltd.

    154,000       492,530  

ASML Holding NV

    4,616       2,818,161  

ASPEED Technology, Inc.

    3,000       208,595  

Cirrus Logic, Inc.(a)

    7,174       535,970  

Disco Corp.

    2,300       691,283  

Elan Microelectronics Corp.

    20,000       58,824  

Faraday Technology Corp.

    31,000       173,382  

Formosa Sumco Technology Corp.

    31,000       161,228  

Foxsemicon Integrated Technology, Inc.

    4,000       25,155  

Global Unichip Corp.

    48,000       1,161,502  

Globalwafers Co. Ltd.

    6,000       93,177  
Security   Shares     Value  

Semiconductors & Semiconductor Equipment (continued)

 

Intel Corp.

    174,819     $ 5,256,807  

JA Solar Technology Co. Ltd., Class A

    3,800       31,411  

King Yuan Electronics Co. Ltd.

    59,000       68,586  

Kinsus Interconnect Technology Corp.

    65,000       263,866  

Koh Young Technology, Inc.

    1,933       21,274  

Lam Research Corp.

    2,481       1,171,975  

LONGi Green Energy Technology Co. Ltd., Class A

    187,200       1,214,365  

M31 Technology Corp.

    6,000       100,586  

MediaTek, Inc.

    25,000       604,095  

Monolithic Power Systems, Inc.

    75       28,647  

NVIDIA Corp.

    12,075       2,043,452  

NXP Semiconductors NV

    8,256       1,451,735  

Parade Technologies Ltd.

    2,000       52,488  

QUALCOMM, Inc.

    17,704       2,239,379  

Realtek Semiconductor Corp.

    20,000       207,919  

RichWave Technology Corp.

    15,000       63,573  

Silergy Corp.

    4,000       60,012  

Silicon Laboratories, Inc.(a)

    2,983       433,847  

Sino-American Silicon Products, Inc.

    21,000       110,186  

Taiwan Semiconductor Manufacturing Co. Ltd.

    411,000       6,600,600  

Teradyne, Inc.

    3,612       337,541  

Texas Instruments, Inc.

    14,811       2,672,793  

Tokyo Electron Ltd.

    800       271,497  

United Microelectronics Corp.

    397,000       598,015  

Wafer Works Corp.

    19,000       28,875  

WinWay Technology Co. Ltd.

    2,000       29,051  

WONIK IPS Co. Ltd.

    2,303       50,693  

XinTec, Inc.

    7,000       24,115  

Xinyi Solar Holdings Ltd.

    36,000       42,242  
   

 

 

 
      40,775,554  
Software — 3.6%  

Adobe, Inc.(a)

    20,784       7,169,025  

Cadence Design Systems, Inc.(a)

    6,644       1,143,034  

Check Point Software Technologies Ltd.(a)

    5,276       700,811  

DocuSign, Inc.(a)

    4,279       201,413  

HubSpot, Inc.(a)

    1,831       554,848  

InterDigital, Inc.

    2       100  

Intuit, Inc.

    3,871       1,577,781  

Kingdee International Software Group Co. Ltd.(a)

    66,000       111,376  

Manhattan Associates, Inc.(a)

    924       116,369  

Microsoft Corp.

    129,195       32,962,812  

Nemetschek SE

    2,576       128,742  

Palo Alto Networks, Inc.(a)

    17,550       2,981,745  

RingCentral, Inc., Class A(a)

    5,748       213,021  

Salesforce, Inc.(a)

    19,201       3,076,960  

ServiceNow, Inc.(a)

    4,902       2,040,703  

Workday, Inc., Class A(a)

    14,887       2,499,527  
   

 

 

 
      55,478,267  
Specialty Retail — 1.4%  

Best Buy Co., Inc.

    32,851       2,802,190  

China Yongda Automobiles Services Holdings Ltd.

    79,000       49,534  

Dufry AG, Registered Shares(a)

    691       28,308  

Fast Retailing Co. Ltd.

    1,200       713,568  

Foschini Group Ltd.

    7,466       45,516  

Home Depot, Inc.

    30,289       9,813,333  

Industria de Diseno Textil SA

    12,515       326,689  

Lojas Renner SA

    3,673       16,251  

Lowe’s Cos., Inc.

    20,460       4,348,773  

Penske Automotive Group, Inc.

    156       19,726  

Shinsegae International, Inc.

    1,864       34,722  

Topsports International Holdings Ltd.(b)

    66,000       42,381  

Ulta Beauty, Inc.(a)

    4,878       2,267,490  
 

 

 

14  

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


Schedule of Investments (unaudited) (continued)

November 30, 2022

  

BlackRock Sustainable Balanced Fund, Inc.

(Percentages shown are based on Net Assets)

 

Security   Shares      Value  

Specialty Retail (continued)

    

Via S/A(a)

    275,859      $ 115,354  

Williams-Sonoma, Inc.

    4,195        490,396  
    

 

 

 
       21,114,231  

Technology Hardware, Storage & Peripherals — 3.3%

    

Advantech Co. Ltd.

    5,000        54,427  

Apple Inc.

    261,849        38,761,507  

Chicony Electronics Co. Ltd.

    33,000        89,395  

Dell Technologies, Inc., Class C

    17,375        778,226  

FUJIFILM Holdings Corp.

    5,200        279,719  

Hewlett Packard Enterprise Co.

    219,259        3,679,166  

HP, Inc.

    66,500        1,997,660  

King Slide Works Co. Ltd.

    2,000        26,957  

Lenovo Group Ltd.

    232,000        198,139  

Lite-On Technology Corp.

    25,000        53,354  

Ricoh Co. Ltd.

    7,600        60,370  

Samsung Electronics Co. Ltd.

    84,813        4,075,176  
    

 

 

 
       50,054,096  

Textiles, Apparel & Luxury Goods — 1.1%

    

adidas AG

    5,058        652,017  

ANTA Sports Products Ltd.

    44,200        525,328  

Bosideng International Holdings Ltd.

    50,000        24,913  

Burberry Group PLC

    11,880        313,986  

Capri Holdings Ltd.(a)

    444        25,463  

Carter’s, Inc.

    1,925        140,602  

Fila Holdings Corp.

    677        17,235  

Fulgent Sun International Holding Co. Ltd.

    10,000        49,381  

Hermes International

    2,238        3,637,374  

Kering SA

    9,328        5,604,610  

Li Ning Co. Ltd.

    23,000        184,840  

Lululemon Athletica, Inc.(a)

    8,401        3,194,984  

Makalot Industrial Co. Ltd.

    8,000        60,905  

Moncler SpA

    13,082        681,887  

Ralph Lauren Corp.

    1,335        151,015  

Swatch Group AG

    4,351        1,164,271  

Tapestry, Inc.

    2,381        89,930  

Youngone Corp.

    495        18,036  
    

 

 

 
       16,536,777  

Thrifts & Mortgage Finance — 0.0%

    

Radian Group, Inc.

    26,326        515,200  
    

 

 

 

Trading Companies & Distributors — 0.6%

 

IMCD NV

    3,859        570,763  

ITOCHU Corp.

    47,000        1,476,133  

Marubeni Corp.

    2,100        23,756  

Mitsubishi Corp.

    51,100        1,721,005  

Mitsui & Co. Ltd.

    126,600        3,674,403  

Posco International Corp.

    1,187        21,870  

SiteOne Landscape Supply, Inc.(a)

    3,848        483,039  

Sumitomo Corp.

    30,600        501,665  

Travis Perkins PLC

    4,018        45,113  

Univar Solutions, Inc.(a)

    707        23,423  
    

 

 

 
       8,541,170  

Transportation Infrastructure — 0.0%

    

CCR SA

    77,111        174,747  

EcoRodovias Infraestrutura e Logistica SA(a)

    25,397        21,387  

Fraport AG Frankfurt Airport Services Worldwide(a)

    757        33,130  

Grupo Aeroportuario del Pacifico SAB de CV, Class B

    4,887        79,379  

Kamigumi Co. Ltd.

    14,100        287,935  
Security           Shares      Value  

Transportation Infrastructure (continued)

 

  

Santos Brasil Participacoes SA

       35,199      $ 51,347  

Taiwan High Speed Rail Corp.

       21,000        19,748  
       

 

 

 
          667,673  

Water Utilities — 0.1%

       

Cia de Saneamento de Minas Gerais-COPASA

       23,472        71,375  

United Utilities Group PLC

       77,778        964,752  
       

 

 

 
          1,036,127  

Wireless Telecommunication Services — 0.2%

       

Far EasTone Telecommunications Co. Ltd.

       18,000        39,746  

Freenet AG

       23,084        513,101  

KDDI Corp.

       19,300        574,070  

MTN Group Ltd.

       85,406        699,873  

SK Telecom Co. Ltd.

       4,810        183,385  

Tele2 AB, B Shares

       132,536        1,177,353  
       

 

 

 
          3,187,528  
       

 

 

 

Total Common Stocks — 56.3%

       

(Cost: $738,690,258)

          864,316,941  
       

 

 

 
             Par
(000)
         

Corporate Bonds

       

Air Freight & Logistics — 0.1%

       

United Parcel Service, Inc., 4.45%, 04/01/30

    USD        1,450        1,438,962  
       

 

 

 

Automobiles — 0.2%

       

Honda Motor Co. Ltd., 2.53%, 03/10/27

       1,000        918,349  

Toyota Motor Credit Corp.

       

3.05%, 03/22/27

       1,000        939,344  

1.90%, 04/06/28

       850        743,355  
       

 

 

 
          2,601,048  

Banks — 4.1%

       

Banco Santander SA

       

2.75%, 05/28/25

       600        563,857  

1.85%, 03/25/26

       400        352,522  

4.18%, 03/24/28

       1,000        926,811  

3.23%, 11/22/32

       200        149,014  

Bank of America Corp.

       

3.38%, 04/02/26

       1,450        1,380,725  

1.73%, 07/22/27

       1,050        920,036  

2.55%, 02/04/28

       1,150        1,028,800  

4.38%, 04/27/28

       1,260        1,209,769  

2.09%, 06/14/29

       1,200        1,012,908  

3.19%, 07/23/30

       370        322,936  

2.50%, 02/13/31

       1,400        1,151,783  

5.02%, 07/22/33

       1,320        1,274,353  

Series N, 1.66%, 03/11/27

       1,150        1,019,012  

Bank of Montreal, 1.25%, 09/15/26

       1,890        1,657,749  

Bank of Nova Scotia

       

1.05%, 03/02/26

       1,550        1,373,532  

1.30%, 09/15/26

       1,500        1,318,379  

2.95%, 03/11/27

       1,450        1,336,230  

Barclays PLC

       

2.85%, 05/07/26

       1,100        1,014,216  

2.28%, 11/24/27

       1,000        860,115  

7.44%, 11/02/33

       920        974,549  

Canadian Imperial Bank of Commerce, 3.30%, 04/07/25

       600        578,138  

Citigroup, Inc.

       

2.01%, 01/25/26

       1,590        1,476,230  

1.46%, 06/09/27

       1,075        935,769  
 

 

 

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

  15


Schedule of Investments (unaudited) (continued)

November 30, 2022

  

BlackRock Sustainable Balanced Fund, Inc.

(Percentages shown are based on Net Assets)

 

Security           Par
(000)
     Value  

Banks (continued)

       

Citigroup, Inc.

       

Series VAR, 3.07%, 02/24/28

    USD        1,650      $ 1,499,254  

HSBC Holdings PLC

       

3.00%, 03/10/26

       1,200        1,119,918  

1.59%, 05/24/27

       1,800        1,542,247  

2.25%, 11/22/27

       2,250        1,939,388  

2.21%, 08/17/29

       1,400        1,131,398  

2.80%, 05/24/32

       1,800        1,398,199  

4.76%, 03/29/33

       450        389,323  

ING Groep NV, 4.02%, 03/28/28

       1,710        1,595,605  

JPMorgan Chase & Co.

       

2.01%, 03/13/26

       1,503        1,396,662  

2.08%, 04/22/26

       352        327,013  

2.95%, 10/01/26

       1,092        1,030,341  

1.05%, 11/19/26

       1,150        1,014,456  

1.47%, 09/22/27

       400        347,204  

4.85%, 07/25/28

       1,835        1,796,649  

5.72%, 09/14/33

       2,320        2,295,094  

Lloyds Banking Group PLC

       

4.45%, 05/08/25

       1,000        977,740  

2.44%, 02/05/26

       2,220        2,053,237  

3.75%, 01/11/27

       1,000        929,686  

3.75%, 03/18/28

       600        548,058  

3.57%, 11/07/28

       850        758,589  

Mitsubishi UFJ Financial Group, Inc.

       

1.41%, 07/17/25

       1,000        906,060  

1.54%, 07/20/27

       1,450        1,261,121  

2.34%, 01/19/28

       1,250        1,103,701  

Mizuho Financial Group, Inc.

       

2.65%, 05/22/26

       1,350        1,250,830  

1.55%, 07/09/27

       1,850        1,610,998  

2.17%, 05/22/32

       400        304,803  

NatWest Group PLC

       

1.64%, 06/14/27

       1,560        1,335,568  

5.52%, 09/30/28

       2,310        2,269,285  

4.89%, 05/18/29

       620        583,717  

Royal Bank of Canada

       

3.38%, 04/14/25

       600        580,909  

0.88%, 01/20/26

       1,200        1,066,333  

Santander UK Group Holdings PLC, 1.53%, 08/21/26

       1,000        878,312  

Toronto-Dominion Bank

       

3.20%, 03/10/32

       1,220        1,054,307  

Series FXD, 1.95%, 01/12/27

       1,850        1,652,824  
       

 

 

 
          62,786,262  

Beverages — 1.0%

       

Coca-Cola Co.

       

2.25%, 01/05/32

       1,050        884,708  

3.00%, 03/05/51

       3,310        2,486,456  

Coca-Cola Femsa SAB de CV, 1.85%, 09/01/32

       1,730        1,319,449  

Diageo Capital PLC

       

1.38%, 09/29/25

       1,000        915,600  

2.00%, 04/29/30

       3,300        2,732,473  

5.50%, 01/24/33

       980        1,034,563  

Keurig Dr Pepper, Inc.

       

2.25%, 03/15/31

       1,300        1,048,972  

4.05%, 04/15/32

       1,750        1,609,010  

PepsiCo, Inc.

       

3.60%, 02/18/28

       845        818,062  

4.20%, 07/18/52

       2,450        2,285,971  
       

 

 

 
          15,135,264  
Security           Par
(000)
     Value  

Biotechnology — 0.6%

       

AbbVie, Inc., 2.95%, 11/21/26

    USD        800      $ 749,019  

Amgen, Inc.

       

2.20%, 02/21/27

       650        590,710  

3.00%, 02/22/29

       1,000        904,491  

4.88%, 03/01/53

       95        86,650  

Regeneron Pharmaceuticals, Inc., 1.75%, 09/15/30

 

     8,620        6,772,576  
       

 

 

 
          9,103,446  

Building Products — 0.2%

       

Johnson Controls International plc, 3.90%, 02/14/26.

 

     3,000        2,930,196  

Owens Corning, 3.40%, 08/15/26

       350        327,284  
       

 

 

 
          3,257,480  

Capital Markets — 2.0%

       

Ares Capital Corp., 2.88%, 06/15/27

       1,000        857,081  

Blackstone Private Credit Fund, 2.63%, 12/15/26

       130        110,465  

Credit Suisse AG, 1.25%, 08/07/26

       430        340,871  

Deutsche Bank AG, 1.69%, 03/19/26

       1,200        1,065,748  

FactSet Research Systems, Inc., 2.90%, 03/01/27

 

     3,000        2,741,679  

FS KKR Capital Corp., 2.63%, 01/15/27

       795        669,898  

Goldman Sachs Group, Inc.

       

1.54%, 09/10/27

       4,070        3,516,558  

2.64%, 02/24/28

       2,400        2,141,129  

2.60%, 02/07/30

       1,220        1,021,114  

2.38%, 07/21/32

       430        339,651  

Series VAR, 1.09%, 12/09/26

       1,000        880,938  

Morgan Stanley

       

2.19%, 04/28/26

       1,000        930,191  

4.68%, 07/17/26

       510        504,198  

3.13%, 07/27/26

       1,100        1,031,778  

3.63%, 01/20/27

       900        855,206  

1.51%, 07/20/27

       1,950        1,696,729  

2.48%, 01/21/28

       950        844,045  

1.79%, 02/13/32

       2,060        1,567,742  

4.89%, 07/20/33

       1,085        1,034,980  

2.48%, 09/16/36

       550        408,890  

Nasdaq, Inc., 1.65%, 01/15/31

       1,000        771,815  

Nomura Holdings, Inc., 1.85%, 07/16/25

       1,200        1,095,942  

Prospect Capital Corp., 3.36%, 11/15/26

       800        671,051  

S&P Global, Inc.

       

2.45%, 03/01/27(b)

       1,000        919,584  

2.90%, 03/01/32(b)

       1,135        978,017  

Thomson Reuters Corp., 3.35%, 05/15/26

       3,740        3,556,731  
       

 

 

 
          30,552,031  

Chemicals — 0.1%

       

DuPont de Nemours, Inc., 4.49%, 11/15/25

       700        694,400  
       

 

 

 

Commercial Services & Supplies — 0.0%

 

  

Republic Services, Inc., 1.75%, 02/15/32

       800        621,823  
       

 

 

 

Communications Equipment — 0.2%

       

Motorola Solutions, Inc.

       

2.30%, 11/15/30

       1,400        1,103,966  

2.75%, 05/24/31

       890        718,173  

5.60%, 06/01/32

       810        806,742  
       

 

 

 
          2,628,881  

Construction & Engineering — 0.1%

       

Quanta Services, Inc., 2.90%, 10/01/30

       1,500        1,246,832  
       

 

 

 

Consumer Finance — 0.0%

       

American Express Co., 2.55%, 03/04/27

       700        635,774  
       

 

 

 

Distributors — 0.0%

       

Genuine Parts Co., 1.75%, 02/01/25

       500        466,622  
       

 

 

 
 

 

 

16  

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


Schedule of Investments (unaudited) (continued)

November 30, 2022

  

BlackRock Sustainable Balanced Fund, Inc.

(Percentages shown are based on Net Assets)

 

Security           Par
(000)
     Value  

Diversified Financial Services — 0.1%

       

National Rural Utilities Cooperative Finance Corp.

       

1.00%, 06/15/26

    USD        2,000      $ 1,769,350  

1.65%, 06/15/31

       130        99,905  

2.75%, 04/15/32

       50        41,679  

RELX Capital, Inc., 3.00%, 05/22/30

       185        160,641  
       

 

 

 
          2,071,575  

Diversified Telecommunication Services — 0.3%

 

Deutsche Telekom International Finance BV

       

3.60%, 01/19/27(b)

       1,340        1,278,278  

9.25%, 06/01/32

       750        949,951  

Koninklijke KPN NV, 8.38%, 10/01/30

       450        506,271  

Lumen Technologies, Inc., 5.38%, 06/15/29(b)

       1,235        872,219  

Verizon Communications, Inc., 2.10%, 03/22/28

       1,500        1,312,391  
       

 

 

 
          4,919,110  

Electric Utilities — 0.5%

 

Avangrid, Inc.

       

3.20%, 04/15/25

       2,180        2,082,780  

3.80%, 06/01/29

       500        457,498  

Eversource Energy

       

2.90%, 03/01/27

       1,000        917,562  

3.38%, 03/01/32

       750        657,059  

Series U, 1.40%, 08/15/26

       200        176,193  

Exelon Corp.

       

2.75%, 03/15/27(b)

       550        506,956  

3.35%, 03/15/32(b)

       350        307,506  

NSTAR Electric Co.

       

3.25%, 05/15/29

       1,000        916,178  

3.95%, 04/01/30

       1,000        949,233  
       

 

 

 
          6,970,965  

Electronic Equipment, Instruments & Components — 0.5%

 

Allegion U.S. Holding Co., Inc., 3.55%, 10/01/27

       45        40,832  

Flex Ltd., 3.75%, 02/01/26

       1,000        934,562  

Keysight Technologies, Inc.

       

4.60%, 04/06/27

       1,250        1,215,007  

3.00%, 10/30/29

       3,070        2,672,401  

Teledyne Technologies, Inc.

       

1.60%, 04/01/26

       1,000        890,040  

2.25%, 04/01/28

       1,000        862,203  

2.75%, 04/01/31

       1,000        823,952  
       

 

 

 
          7,438,997  

Energy Equipment & Services — 0.1%

       

CGG SA, 8.75%, 04/01/27(b)

       600        504,633  

Johnson Controls International plc/Tyco Fire &

       

Security Finance SCA

       

1.75%, 09/15/30

       400        321,453  

2.00%, 09/16/31

       360        284,339  
       

 

 

 
          1,110,425  

Entertainment — 0.0%

       

Electronic Arts, Inc., 4.80%, 03/01/26

       500        501,799  
       

 

 

 

Equity Real Estate Investment Trusts (REITs) — 0.5%

 

American Tower Corp.

       

1.30%, 09/15/25

       1,000        899,368  

1.45%, 09/15/26

       490        426,361  

Crown Castle, Inc., 1.05%, 07/15/26

       940        813,442  

Equinix, Inc., 1.45%, 05/15/26

       1,000        881,453  

Iron Mountain, Inc., 5.25%, 07/15/30(b)

       700        630,000  

Life Storage LP, 3.88%, 12/15/27

       450        418,355  

Uniti Group LP/Uniti Group Finance, Inc./CSL

       

Capital LLC, 6.50%, 02/15/29(b)

       1,685        1,234,263  

VICI Properties LP, 5.13%, 05/15/32

       1,110        1,041,191  
Security           Par
(000)
     Value  

Equity Real Estate Investment Trusts (REITs) (continued)

 

Welltower, Inc., 4.00%, 06/01/25

    USD        900      $ 878,425  

Weyerhaeuser Co., 3.38%, 03/09/33

       90        75,678  
       

 

 

 
          7,298,536  

Food & Staples Retailing — 0.2%

       

Bunge Ltd. Finance Corp.

       

1.63%, 08/17/25

       1,150        1,046,962  

3.75%, 09/25/27

       1,200        1,126,731  

2.75%, 05/14/31

       1,800        1,494,466  
       

 

 

 
          3,668,159  

Food Products — 0.6%

       

Campbell Soup Co., 4.15%, 03/15/28

       600        580,092  

General Mills, Inc.

       

4.00%, 04/17/25

       500        491,915  

3.20%, 02/10/27

       1,250        1,188,840  

2.25%, 10/14/31

       3,880        3,162,182  

Kellogg Co.

       

3.40%, 11/15/27

       670        628,894  

4.30%, 05/15/28

       3,000        2,945,780  

2.10%, 06/01/30

       1,000        814,764  
       

 

 

 
          9,812,467  

Gas Utilities — 0.1%

       

AmeriGas Partners LP/AmeriGas Finance Corp.,
5.75%, 05/20/27

       890        849,060  

ONE Gas, Inc., 4.25%, 09/01/32

       155        148,161  

Southwest Gas Corp., 4.05%, 03/15/32

       550        479,136  
       

 

 

 
          1,476,357  

Health Care Equipment & Supplies — 0.1%

 

Abbott Laboratories, 4.90%, 11/30/46

       1,260        1,264,468  
       

 

 

 

Health Care Providers & Services — 1.0%

 

AMN Healthcare, Inc., 4.00%, 04/15/29(b)

       1,010        886,123  

Elevance Health, Inc., 3.65%, 12/01/27

       1,500        1,426,462  

HCA, Inc.

       

5.25%, 06/15/26

       850        843,256  

3.13%, 03/15/27(b)

       440        400,230  

Humana, Inc.

       

4.50%, 04/01/25

       1,050        1,038,309  

1.35%, 02/03/27

       1,200        1,035,241  

3.70%, 03/23/29

       1,500        1,381,308  

Laboratory Corp. of America Holdings, 1.55%, 06/01/26

       2,000        1,771,784  

Quest Diagnostics, Inc., 3.45%, 06/01/26

       400        382,284  

UnitedHealth Group, Inc.

       

5.30%, 02/15/30

       1,560        1,611,011  

4.20%, 05/15/32

       5,000        4,814,670  

5.88%, 02/15/53

       200        221,328  
       

 

 

 
          15,812,006  

Hotels, Restaurants & Leisure — 0.1%

 

McDonald’s Corp., 3.30%, 07/01/25

       900        875,336  

Starbucks Corp., 2.00%, 03/12/27

       850        763,568  
       

 

 

 
          1,638,904  

Household Products — 0.0%

 

Colgate-Palmolive Co., 3.25%, 08/15/32

       50        45,737  
       

 

 

 

Industrial Conglomerates — 0.2%

 

3M Co., 3.05%, 04/15/30

       1,450        1,293,832  

Trane Technologies Luxembourg Finance SA,

       

3.80%, 03/21/29

       1,980        1,835,777  
       

 

 

 
          3,129,609  
 

 

 

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

  17


Schedule of Investments (unaudited) (continued)

November 30, 2022

  

BlackRock Sustainable Balanced Fund, Inc.

(Percentages shown are based on Net Assets)

 

Security

          Par
(000)
     Value  

Insurance — 0.9%

       

Alleghany Corp., 3.63%, 05/15/30

    USD        3,270      $ 3,037,896  

Arthur J Gallagher & Co.

       

2.40%, 11/09/31

       580        457,980  

3.50%, 05/20/51

       1,170        834,502  

Hanover Insurance Group, Inc.

       

4.50%, 04/15/26

       1,810        1,779,100  

2.50%, 09/01/30

       380        294,975  

Manulife Financial Corp., 4.15%, 03/04/26

       1,220        1,200,072  

Marsh & McLennan Cos., Inc.

       

4.38%, 03/15/29

       1,820        1,771,365  

2.25%, 11/15/30

       2,000        1,645,253  

2.38%, 12/15/31

       790        641,458  

Progressive Corp.

       

2.50%, 03/15/27

       200        183,889  

3.00%, 03/15/32

       400        353,208  

Unum Group, 4.13%, 06/15/51

       950        661,773  

Willis North America, Inc., 2.95%, 09/15/29

       850        717,640  
       

 

 

 
          13,579,111  

Internet & Direct Marketing Retail — 0.1%

 

Cogent Communications Group, Inc., 7.00%, 06/15/27(b)

       900        877,500  
       

 

 

 

IT Services — 0.9%

       

Automatic Data Processing, Inc., 1.70%, 05/15/28

       5,380        4,724,007  

Block Financial LLC, 3.88%, 08/15/30

       1,490        1,312,747  

CGI, Inc., 2.30%, 09/14/31

       1,850        1,422,389  

Gartner, Inc., 4.50%, 07/01/28(b)

       975        917,884  

International Business Machines Corp.

       

2.20%, 02/09/27

       750        679,438  

2.72%, 02/09/32

       750        634,646  

4.40%, 07/27/32

       2,350        2,260,215  

Mastercard, Inc., 2.00%, 11/18/31

       1,450        1,192,487  

VeriSign, Inc., 2.70%, 06/15/31

       620        508,170  
       

 

 

 
          13,651,983  

Life Sciences Tools & Services — 0.3%

 

Agilent Technologies, Inc.

       

3.05%, 09/22/26

       2,000        1,875,254  

2.30%, 03/12/31

       3,210        2,616,487  
       

 

 

 
          4,491,741  

Machinery — 0.4%

       

Cummins, Inc.

       

0.75%, 09/01/25

       680        613,896  

1.50%, 09/01/30

       1,470        1,174,913  

IDEX Corp., 2.63%, 06/15/31

       3,500        2,919,699  

Wabash National Corp., 4.50%, 10/15/28(b)

       750        634,184  
       

 

 

 
          5,342,692  

Media — 0.1%

       

Interpublic Group of Cos., Inc., 4.65%, 10/01/28

       500        479,119  

Sirius XM Radio, Inc., 5.50%, 07/01/29(b)

       900        837,990  
       

 

 

 
          1,317,109  

Metals & Mining — 0.3%

       

Mineral Resources Ltd., 8.50%, 05/01/30(b)

       850        866,966  

Reliance Steel & Aluminum Co.

       

1.30%, 08/15/25

       680        612,460  

2.15%, 08/15/30

       1,910        1,503,779  

Steel Dynamics, Inc.

       

2.40%, 06/15/25

       750        702,462  

3.25%, 01/15/31

       400        341,883  
       

 

 

 
          4,027,550  
Security           Par
(000)
     Value  

Multi-Utilities — 0.2%

       

Consolidated Edison Co. of New York, Inc.

       

3.80%, 05/15/28

    USD        350      $ 333,608  

2.40%, 06/15/31

       1,000        827,724  

Series 20A, 3.35%, 04/01/30

       1,500        1,354,873  
       

 

 

 
          2,516,205  

Oil, Gas & Consumable Fuels — 0.8%

       

Baker Hughes Holdings LLC/Baker Hughes Co-
Obligor, Inc., 4.49%, 05/01/30

       500        481,042  

Cheniere Corpus Christi Holdings LLC, 3.70%, 11/15/29

       4,170        3,803,959  

EQT Corp., 7.00%, 02/01/30

       1,520        1,599,129  

Kinder Morgan, Inc., 2.00%, 02/15/31

       850        671,364  

MPLX LP, 2.65%, 08/15/30

       2,030        1,665,872  

ONEOK, Inc.

       

2.20%, 09/15/25

       370        339,454  

5.85%, 01/15/26

       1,000        1,013,965  

6.35%, 01/15/31

       2,000        2,057,378  

Vermilion Energy, Inc., 6.88%, 05/01/30(b)

       1,290        1,191,013  
       

 

 

 
          12,823,176  

Paper & Forest Products — 0.0%

       

Louisiana-Pacific Corp., 3.63%, 03/15/29(b)

       725        603,591  
       

 

 

 

Pharmaceuticals — 0.8%

       

Astrazeneca Finance LLC

       

1.20%, 05/28/26

       1,150        1,027,107  

1.75%, 05/28/28

       800        695,606  

2.25%, 05/28/31

       990        830,698  

Bristol-Myers Squibb Co., 2.95%, 03/15/32

       710        626,591  

Jazz Securities DAC, 4.38%, 01/15/29(b)

       700        635,264  

Merck & Co., Inc., 2.15%, 12/10/31

       1,550        1,288,115  

Novartis Capital Corp., 2.20%, 08/14/30

       3,030        2,600,035  

Zoetis, Inc.

       

4.50%, 11/13/25

       290        287,578  

5.40%, 11/14/25

       740        751,179  

3.00%, 09/12/27

       640        591,070  

2.00%, 05/15/30

       3,770        3,106,009  
       

 

 

 
          12,439,252  

Professional Services — 0.1%

       

ASGN, Inc., 4.63%, 05/15/28(b)

       1,595        1,423,537  
       

 

 

 

Real Estate Management & Development — 0.0%

 

CBRE Services, Inc., 4.88%, 03/01/26

       500        500,150  
       

 

 

 

Road & Rail — 0.0%

       

Canadian National Railway Co., 3.85%, 08/05/32

       575        540,006  
       

 

 

 

Semiconductors & Semiconductor Equipment — 0.9%

 

Applied Materials, Inc., 1.75%, 06/01/30

       900        743,405  

Broadcom, Inc.

       

4.15%, 04/15/32(b)

       1,240        1,093,235  

4.30%, 11/15/32

       900        800,279  

NVIDIA Corp.

       

3.20%, 09/16/26

       1,810        1,739,028  

1.55%, 06/15/28

       600        515,323  

2.00%, 06/15/31

       3,490        2,837,404  

3.70%, 04/01/60

       500        378,713  

NXP BV/NXP Funding LLC, 5.55%, 12/01/28

       850        852,809  

NXP BV/NXP Funding LLC/NXP U.S.A., Inc., 2.70%, 05/01/25

       800        746,650  

Texas Instruments, Inc.

       

1.90%, 09/15/31

       459        374,861  

3.65%, 08/16/32

       3,545        3,309,161  
       

 

 

 
          13,390,868  
 

 

 

18  

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


Schedule of Investments (unaudited) (continued)

November 30, 2022

  

BlackRock Sustainable Balanced Fund, Inc.

(Percentages shown are based on Net Assets)

 

Security         

Par

(000)

    Value  

Software — 1.0%

     

Adobe, Inc., 2.30%, 02/01/30

    USD       3,570     $ 3,069,718  

Electronic Arts, Inc., 1.85%, 02/15/31

      1,000       802,070  

Intuit, Inc.

     

1.35%, 07/15/27

      1,000       870,298  

1.65%, 07/15/30

      4,690       3,756,472  

ServiceNow, Inc., 1.40%, 09/01/30

      3,000       2,336,964  

VMware, Inc.

     

1.80%, 08/15/28

      3,950       3,260,787  

2.20%, 08/15/31

      960       732,706  
     

 

 

 
        14,829,015  

Home Depot, Inc.

     

2.88%, 04/15/27

      350       328,400  

1.50%, 09/15/28

      1,050       900,064  

1.88%, 09/15/31

      1,420       1,151,081  

Lowe’s Cos., Inc.

     

4.00%, 04/15/25

      350       344,951  

3.35%, 04/01/27

      1,500       1,423,450  

1.70%, 09/15/28

      1,150       978,310  
     

 

 

 
        5,126,256  

Technology Hardware, Storage & Peripherals — 0.2%

 

Apple Inc.

     

3.35%, 08/08/32

      2,000       1,845,542  

3.95%, 08/08/52

      1,740       1,521,633  

4.10%, 08/08/62

      140       121,257  

CDW LLC/CDW Finance Corp., 3.57%, 12/01/31

      226       186,466  
     

 

 

 
        3,674,898  

Trading Companies & Distributors — 0.0%

 

GATX Corp., 3.50%, 06/01/32

      350       294,017  
     

 

 

 

Wireless Telecommunication Services — 0.2%

 

Rogers Communications, Inc., 3.20%, 03/15/27(b)

      350       326,596  

T-Mobile U.S.A., Inc.

     

2.70%, 03/15/32

      2,940       2,412,745  

5.65%, 01/15/53

      315       315,883  

5.80%, 09/15/62

      260       259,253  
     

 

 

 
        3,314,477  
     

 

 

 

Total Corporate Bonds — 20.4%
(Cost: $331,269,106)

        313,091,073  
     

 

 

 
            Shares/
Investment
Value
        

Investment Companies

     

Equity Funds — 0.8%

     

iShares MSCI India ETF(c)(d)

      263,848       11,672,636  
     

 

 

 

Total Investment Companies — 0.8%
(Cost: $12,122,760)

        11,672,636  
     

 

 

 
            Shares         

Preferred Securities

     

Preferred Stocks — 0.2%

     

Airlines — 0.0%

     

Azul SA(a)

      59,150       139,744  
     

 

 

 

Automobiles — 0.0%

     

Bayerische Motoren Werke AG

      1,541       133,719  
     

 

 

 
Security          Shares     Value  

Banks — 0.0%

     

Banco Bradesco SA

      100     $ 299  

Bancolombia SA

      24,294       160,970  
     

 

 

 
        161,269  

Biotechnology — 0.0%

     

Grifols SA, Class B(a)

      1,625       13,034  
     

 

 

 

Chemicals — 0.1%

     

FUCHS PETROLUB SE

      782       27,392  

Sociedad Quimica y Minera de Chile SA, Class B

      16,651       1,660,523  
     

 

 

 
        1,687,915  

Electric Utilities — 0.1%

     

Centrais Eletricas Brasileiras SA, Class B

      27,729       261,401  

Cia Energetica de Minas Gerais

      122,518       270,565  

Cia Paranaense de Energia, Class B

      92,895       143,567  
     

 

 

 
        675,533  

Machinery — 0.0%

     

Randon SA Implementos e Participacoes

      14,162       25,489  
     

 

 

 

Metals & Mining — 0.0%

     

Gerdau SA

      43,361       263,123  

Usinas Siderurgicas de Minas Gerais SA Usiminas,

     

Class A

      38,822       57,979  
     

 

 

 
        321,102  

Oil, Gas & Consumable Fuels — 0.0%

 

Petroleo Brasileiro SA

      98,216       499,658  
     

 

 

 

Total Preferred Securities — 0.2%
(Cost: $3,460,328)

        3,657,463  
     

 

 

 

Rights

     

Banks — 0.0%

     

Shanghai Commercial & Savings Bank Ltd., Expires
12/08/22, Strike Price TWD 37

      1,100       491  
     

 

 

 

Total Rights — 0.0%
(Cost: $ —)

        491  
     

 

 

 
            Par
(000)
        

U.S. Government Sponsored Agency Securities

 

Mortgage-Backed Securities — 7.5%

 

Fannie Mae Mortgage-Backed Securities

     

1.50%, 02/01/37 - 08/01/37

    USD       455       398,876  

2.00%, 04/01/37 - 01/01/52

      34,414       28,842,028  

2.50%, 04/01/51 - 07/01/51

      7,417       6,385,332  

3.00%, 09/01/34 - 04/01/52

      2,237       2,041,062  

4.00%, 03/01/51 - 08/01/52

      1,200       1,144,231  

Freddie Mac Mortgage-Backed Securities

     

1.50%, 03/01/37

      186       163,087  

2.00%, 04/01/37

      964       870,082  

2.50%, 07/01/51

      4,165       3,577,818  

4.00%, 06/01/52 - 08/01/52

      657       621,201  

Ginnie Mae Mortgage-Backed Securities

     

1.50%, 12/01/52(e)

      100       81,488  

2.00%, 10/20/51 - 12/01/52(e)

      6,608       5,631,672  

2.50%, 07/20/51 - 12/01/52(e)

      16,010       14,087,249  

3.00%, 12/20/51 - 12/01/52(e)

      15,428       13,944,083  

3.50%, 01/20/52 - 12/01/52(e)

      11,635       10,815,393  

4.00%, 07/20/52 - 12/01/52(e)

      8,996       8,591,068  

4.50%, 12/01/52(e)

      1,400       1,371,180  

5.00%, 12/01/52(e)

      500       499,531  
 

 

 

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

  19


Schedule of Investments (unaudited) (continued)

November 30, 2022

  

BlackRock Sustainable Balanced Fund, Inc.

(Percentages shown are based on Net Assets)

 

Security          Par
(000)
    Value  

Mortgage-Backed Securities (continued)

     

Uniform Mortgage-Backed Securities

     

1.50%, 12/01/37 - 12/01/52(e)

    USD       5,589     $ 4,549,553  

2.00%, 12/01/37(e)

      2,186       1,966,558  

2.50%, 12/01/37(e)

      3,975       3,672,510  

3.00%, 12/01/37 - 12/01/52(e)

      3,100       2,884,996  

3.50%, 12/01/52(e)

      1,025       938,195  

4.00%, 12/01/37 - 12/01/52(e)

      1,400       1,330,203  

5.00%, 12/01/52(e)

      500       497,500  

5.50%, 12/01/52(e)

      750       758,514  
     

 

 

 
        115,663,410  
     

 

 

 

Total U.S. Government Sponsored Agency Securities — 7.5%

 

(Cost: $120,271,196)

        115,663,410  
     

 

 

 

U.S. Treasury Obligations

     

U.S. Treasury Bonds

     

1.13%, 05/15/40

      23,000       14,718,203  

2.25%, 05/15/41 - 02/15/52

      46,000       33,958,828  

2.38%, 02/15/42

      10,000       7,779,297  

3.00%, 02/15/47

      5,000       4,200,195  

U.S. Treasury Notes

     

2.50%, 03/31/27

      35,000       33,051,758  

1.88%, 02/28/29 - 02/15/32

      33,000       28,955,469  

2.38%, 05/15/29

      16,000       14,720,625  

0.63%, 08/15/30

      5,000       3,994,141  
     

 

 

 

Total U.S. Treasury Obligations — 9.2%
(Cost: $163,616,610)

        141,378,516  
     

 

 

 

Total Long-Term Investments — 94.4%
(Cost: $1,369,430,258)

        1,449,780,530  
     

 

 

 

 

Security         

Shares

    Value  

Short-Term Securities

     

Money Market Funds — 5.0%

     

BlackRock Liquidity Funds, T-Fund, Institutional
Class, 3.57%(d)(f)

      67,099,892     $ 67,099,892  

SL Liquidity Series, LLC, Money Market Series,
4.05%(d)(f)(g)

      9,329,268       9,325,536  
     

 

 

 
        76,425,428  
     

 

 

 
           

Par

(000)

        

U.S. Treasury Obligations(h) — 2.6%

 

 

U.S. Treasury Bills, 3.26%, 12/29/22

    USD       40,000       39,881,813  
     

 

 

 

Total Short-Term Securities — 7.6%
(Cost: $116,323,918)

        116,307,241  
     

 

 

 

Total Investments — 102.0%
(Cost: $1,485,754,176
)

        1,566,087,771  

Liabilities in Excess of Other Assets — (2.0)%

 

    (29,957,582
     

 

 

 

Net Assets — 100.0%

      $ 1,536,130,189  
     

 

 

 

 

(a) 

Non-income producing security.

(b) 

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

(c) 

All or a portion of this security is on loan.

(d)

Affiliate of the Fund.

(e) 

Represents or includes a TBA transaction.

(f)

Annualized 7-day yield as of period end.

(g) 

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

(h) 

Rates are discount rates or a range of discount rates as of period end.

 

 

Affiliates

Investments in issuers considered to be affiliate(s) of the Fund during the six months ended November 30, 2022 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

                   
Affiliated Issuer   Value at
05/31/22
     Purchases
at Cost
    Proceeds
from Sale
    Net Realized
Gain (Loss)
    Change in
Unrealized
Appreciation
(Depreciation)
     Value at
11/30/22
     Shares/
Investment
Value Held
at 11/30/22
     Income
(Expense)
   

Capital

Gain
Distributions
from
Underlying
Funds

 

BlackRock Liquidity Funds, T-Fund, Institutional Class

  $ 147,853,903      $     $ (80,754,011 )(a)    $     $      $ 67,099,892        67,099,892      $ 1,106,214     $  

iShares MSCI Brazil ETF(b)

    5,319,190        692,824       (5,506,860     (845,978     340,824                      226,216        

iShares MSCI China A ETF(b)

    4,428,395              (3,780,160     (923,261     275,026                      8,416        

iShares MSCI India ETF

    10,931,223                          741,413        11,672,636        263,848               

iShares MSCI South

                     

Korea ETF(b)

    10,737,392        1,001,161       (9,352,817     (2,619,010     233,274                             

iShares MSCI Taiwan ETF(b)

    15,453,788        4,305,928       (15,418,528     (5,114,053     772,865                             

SL Liquidity Series, LLC, Money Market Series

           9,328,855 (a)            (4,184     865        9,325,536        9,329,268        20,742 (c)       
        

 

 

   

 

 

    

 

 

       

 

 

   

 

 

 
         $     (9,506,486   $     2,364,267      $     88,098,064         $     1,361,588     $     —  
        

 

 

   

 

 

    

 

 

       

 

 

   

 

 

 

 

  (a) 

Represents net amount purchased (sold).

 
  (b) 

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

 
  (c) 

Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

 

 

 

20  

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


Schedule of Investments (unaudited) (continued)

November 30, 2022

  

BlackRock Sustainable Balanced Fund, Inc.

 

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

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

 

         
Description   Number of
Contracts
     Expiration
Date
    

Notional
Amount

(000)

     Value/
Unrealized
Appreciation
(Depreciation)
 

Long Contracts

          

S&P 500 E-Mini Index

    182        12/16/22      $ 37,139      $ 2,461,860  

U.S. Treasury Notes (10 Year)

    179        03/22/23        20,367        183,955  
          

 

 

 
             2,645,815  
          

 

 

 

Short Contracts

          

S&P/Toronto Stock Exchange 60 Index

    6        12/15/22        1,107        (55,278

E-Mini S&P 500 Index

    205        12/16/22        36,597        (1,267,352

Mini MSCI EAFE Index

    60        12/16/22        5,940        (774,988

Mini MSCI Emerging Markets Index

    99        12/16/22        4,863        (649,544

U.S. Treasury Long-Term Bonds

    80        03/22/23        10,210        (116,008

U.S. Ultra Treasury Bonds

    70        03/22/23        9,601        (134,612

U.S. Ultra Treasury Bonds (10 Year)

    56        03/22/23        6,731        (68,743

U.S. Treasury Notes (2 Year)

    187        03/31/23        38,434        (125,894

U.S. Treasury Notes (5 Year)

    237        03/31/23        25,781        (204,043
          

 

 

 
             (3,396,462
          

 

 

 
           $ (750,647
          

 

 

 

Forward Foreign Currency Exchange Contracts

 

             
Currency Purchased              Currency Sold           Counterparty    Settlement
Date
     Unrealized
Appreciation
(Depreciation)
 

USD

    426,782                        EUR        419,200                     BNP Paribas S.A.      12/21/22      $ (10,275

USD

    413,977           GBP        353,700        Bank of America N.A.      12/21/22        (12,685

USD

    4,399,610           JPY        621,541,400        Citibank N.A.      12/21/22        (114,873
                     

 

 

 
                        (137,833
                     

 

 

 

Centrally Cleared Credit Default Swaps — Buy Protection

 

               
Reference Obligation/Index   Financing
Rate
Paid by
the Fund
    Payment
Frequency
     Termination
Date
     Notional
Amount
(000)
     Value     Upfront
Premium
Paid
(Received)
     Unrealized
Appreciation
(Depreciation)
 

CDX.NA.HY.39.V1

    5.00     Quarterly        12/20/27        USD 15,460      $ (444,613   $ 709,362      $ (1,153,975
            

 

 

   

 

 

    

 

 

 

OTC Total Return Swaps

 

 

Paid by the Fund

  

        Received by the Fund             

        Termination
Date
     Notional
Amount
(000)
     Value      Upfront
Premium
Paid
(Received)
     Unrealized
Appreciation
(Depreciation)
 
Reference   Frequency    Rate    Frequency    Counterparty

SOFR plus 0.09%, 3.82%

  Quarterly        MSCI ACWI ESG
Universal Index
   Quarterly    BNP Paribas S.A.      04/11/23        USD 98,646      $ 12,711,192      $      $ 12,711,192  

 

 

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

  21


Schedule of Investments (unaudited) (continued)

November 30, 2022

  

BlackRock Sustainable Balanced Fund, Inc.

 

Balances Reported in the Statement of Assets and Liabilities for Centrally Cleared Swaps and OTC Swaps

 

         
     Swap
Premiums
Paid
     Swap
Premiums
Received
     Unrealized
Appreciation
     Unrealized
Depreciation
 

Centrally Cleared Swaps(a)

  $ 709,362      $      $      $ (1,153,975

OTC Swaps

                  12,711,192         

 

  (a)

Includes cumulative appreciation (depreciation) on centrally cleared swaps, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statement of Assets and Liabilities and is net of any previously paid (received) swap premium amounts.

 

Derivative Financial Instruments Categorized by Risk Exposure

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

 

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

Assets — Derivative Financial Instruments

                   

Futures contracts

                   

Unrealized appreciation on futures contracts(a)

  $      $      $ 2,461,860      $      $ 183,955      $      $ 2,645,815  

Swaps — OTC

                   

Unrealized appreciation on OTC swaps;

                   

Swap premiums paid

                  12,711,192                             12,711,192  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
  $      $      $ 15,173,052      $      $ 183,955      $      $ 15,357,007  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities — Derivative Financial Instruments

                   

Futures contracts

                   

Unrealized depreciation on futures contracts(a)

  $      $      $ 2,747,162      $      $ 649,300      $      $ 3,396,462  

Forward foreign currency exchange contracts

                   

Unrealized depreciation on forward foreign currency exchange contracts

                         137,833                      137,833  

Swaps — centrally cleared

                   

Unrealized depreciation on centrally cleared swaps(a)

           1,153,975                                    1,153,975  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
  $      $ 1,153,975      $ 2,747,162      $ 137,833      $ 649,300      $      $ 4,688,270  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(a)  

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

For the period ended November 30, 2022, the effect of derivative financial instruments in the Statement of Operations was as follows:

 

               
     Commodity
Contracts
     Credit
Contracts
   

Equity

Contracts

    Foreign
Currency
Exchange
Contracts
   

Interest

Rate
Contracts

    Other
Contracts
     Total  

Net Realized Gain (Loss) from

               

Futures contracts

  $      $     $ 2,086,571     $     $ 7,091,917     $      $ 9,178,488  

Forward foreign currency exchange contracts

                       227,557                    227,557  

Swaps

           (34,510     (23,477,133                        (23,511,643
 

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 
  $      $ (34,510   $ (21,390,562   $ 227,557     $ 7,091,917     $      $ (14,105,598
 

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Net Change in Unrealized Appreciation (Depreciation) on

               

Futures contracts

  $      $     $ (2,062,573   $     $ (1,125,997   $      $ (3,188,570

Forward foreign currency exchange contracts

                       (113,642                  (113,642

Swaps

           (233,441     19,726,879                          19,493,438  
 

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 
  $      $ (233,441   $ 17,664,306     $ (113,642   $ (1,125,997   $      $ 16,191,226  
 

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

 

 

22  

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


Schedule of Investments (unaudited) (continued)

November 30, 2022

  

BlackRock Sustainable Balanced Fund, Inc.

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Futures contracts

       

Average notional value of contracts — long

  $ 73,679,805  

Average notional value of contracts — short

  $ 160,036,748  

Forward foreign currency exchange contracts

 

Average amounts purchased — in USD

  $ 5,337,960  

Credit default swaps

 

Average notional value — buy protection

  $ 12,383,050  

Total return swaps

 

Average notional amount

  $ 96,925,685  

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

Derivative Financial Instruments – Offsetting as of Period End

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

 

      Assets      Liabilities  

Derivative Financial Instruments

     

Futures contracts

   $ 1,300,390      $ 1,481,607  

Forward foreign currency exchange contracts

            137,833  

Swaps — centrally cleared

            156,011  

Swaps — OTC(a)

     12,711,192         
  

 

 

    

 

 

 

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

   $ 14,011,582      $ 1,775,451  
  

 

 

    

 

 

 

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

     (1,300,390      (1,637,618
  

 

 

    

 

 

 

Total derivative assets and liabilities subject to an MNA

   $ 12,711,192      $ 137,833  
  

 

 

    

 

 

 

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

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

 

           
Counterparty    Derivative
Assets
Subject to
an MNA by
Counterparty
     Derivatives
Available
for Offset(a)
    

Non-

Cash
Collateral
Received(b)

     Cash
Collateral
Received(b)
     Net
Amount of
Derivative
Assets(c)
 

BNP Paribas S.A.

   $ 12,711,192      $ (10,275    $      $ (10,680,268    $ 2,020,649  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Counterparty    Derivative
Liabilities
Subject to
an MNA by
Counterparty
     Derivatives
Available
for Offset(a)
     Non-
Cash
Collateral
Pledged(b)
     Cash
Collateral
Pledged(b)
     Net Amount
of Derivative
Liabilities(d)(e)
 

Bank of America N.A.

   $ 12,685      $      $      $      $ 12,685  

BNP Paribas S.A.

     10,275        (10,275                     

Citibank N.A.

     114,873                             114,873  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $ 137,833      $ (10,275    $      $      $ 127,558  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

The amount of derivatives available for offset is limited to the amount of derivative assets and/or liabilities that are subject to an MNA.

 
  (b) 

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

 
  (c) 

Net amount represents the net amount receivable from the counterparty in the event of default.

 
  (d) 

Net amount may also include forward foreign currency exchange contracts that are not required to be collateralized.

 
  (e) 

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

 

 

 

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

  23


Schedule of Investments (unaudited) (continued)

November 30, 2022

  

BlackRock Sustainable Balanced Fund, Inc.

 

Fair Value Hierarchy as of Period End

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

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

 

         
     Level 1      Level 2      Level 3      Total  

Assets

          

Investments

          

Long-Term Investments

          

Common Stocks

          

Aerospace & Defense

  $ 4,848,984      $ 2,879,795      $      $ 7,728,779  

Air Freight & Logistics

    2,282,800        2,143,022               4,425,822  

Airlines

    285,636        457,995               743,631  

Auto Components

    794,037        347,427               1,141,464  

Automobiles

    7,966,349        14,412,962               22,379,311  

Banks

    32,920,569        18,348,655               51,269,224  

Beverages

    24,152,772        5,564,082               29,716,854  

Biotechnology

    12,355,496        2,824,732               15,180,228  

Building Products

    3,389,525        501,881               3,891,406  

Capital Markets

    9,100,725        8,148,519               17,249,244  

Chemicals

    1,820,440        11,799,562               13,620,002  

Commercial Services & Supplies

    1,005,911        57,254               1,063,165  

Communications Equipment

    6,546,696        1,204,676               7,751,372  

Construction & Engineering

    3,871,786        4,013,303               7,885,089  

Construction Materials

           840,696               840,696  

Consumer Finance

    11,873,923                      11,873,923  

Containers & Packaging

    1,205,098                      1,205,098  

Distributors

    32,598                      32,598  

Diversified Consumer Services

    1,862,517        88,691               1,951,208  

Diversified Financial Services

    4,765,627        2,236,940               7,002,567  

Diversified Telecommunication Services

    2,273,900        5,950,330               8,224,230  

Electric Utilities

    10,219,244        4,754,159               14,973,403  

Electrical Equipment

    100,912        6,514,239               6,615,151  

Electronic Equipment, Instruments & Components

    665,189        5,151,108               5,816,297  

Energy Equipment & Services

    378,041        34,880               412,921  

Entertainment

    2,194,931        298,998               2,493,929  

Equity Real Estate Investment Trusts (REITs)

    9,378,874        2,800,873               12,179,747  

Food & Staples Retailing

    4,077,933        5,278,202               9,356,135  

Food Products

    7,705,754        4,379,865               12,085,619  

Gas Utilities

           207,256               207,256  

Health Care Equipment & Supplies

    21,055,200        336,761               21,391,961  

Health Care Providers & Services

    26,922,225        291,134               27,213,359  

Hotels, Restaurants & Leisure

    9,150,433        5,781,963               14,932,396  

Household Durables

    1,024,333        789,545               1,813,878  

Household Products

    10,908,540                      10,908,540  

Independent Power and Renewable Electricity Producers

    530,999        410,440               941,439  

Industrial Conglomerates

    9,028,783        7,397,884               16,426,667  

Insurance

    18,985,505        9,740,667               28,726,172  

Interactive Media & Services

    24,219,443        7,739,509               31,958,952  

Internet & Direct Marketing Retail

    13,055,611        4,480,237               17,535,848  

IT Services

    33,648,830        1,622,175               35,271,005  

Leisure Products

           524,191               524,191  

Life Sciences Tools & Services

    15,590,485        695,825               16,286,310  

Machinery

    1,964,334        5,538,104               7,502,438  

Marine

    57,385        2,780,747               2,838,132  

Media

    12,127,896        208,597               12,336,493  

Metals & Mining

    6,214,823        8,094,366               14,309,189  

Multiline Retail

           169,339               169,339  

Multi-Utilities

           4,516,956               4,516,956  

Oil, Gas & Consumable Fuels

    40,690,684        8,923,839               49,614,523  

Paper & Forest Products

    356,559                      356,559  

Personal Products

    899,032        4,850,177               5,749,209  

Pharmaceuticals

    29,693,395        18,685,150               48,378,545  

 

 

24  

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Schedule of Investments (unaudited) (continued)

November 30, 2022

  

BlackRock Sustainable Balanced Fund, Inc.

 

         
      Level 1        Level 2        Level
3
       Total  

Common Stocks (continued)

                 

Professional Services

   $ 1,917,732        $ 8,719,543        $        $ 10,637,275  

Real Estate Management & Development

     578,307          5,480,578                   6,058,885  

Road & Rail

     695,688                            695,688  

Semiconductors & Semiconductor Equipment

     23,658,741          17,116,813                   40,775,554  

Software

     55,238,149          240,118                   55,478,267  

Specialty Retail

     19,873,513          1,240,718                   21,114,231  

Technology Hardware, Storage & Peripherals

     45,216,559          4,837,537                   50,054,096  

Textiles, Apparel & Luxury Goods

     3,601,994          12,934,783                   16,536,777  

Thrifts & Mortgage Finance

     515,200                            515,200  

Trading Companies & Distributors

     506,462          8,034,708                   8,541,170  

Transportation Infrastructure

     326,860          340,813                   667,673  

Water Utilities

     71,375          964,752                   1,036,127  

Wireless Telecommunication Services

              3,187,528                   3,187,528  

Corporate Bonds

              313,091,073                   313,091,073  

Investment Companies

     11,672,636                            11,672,636  

Preferred Securities

                 

Preferred Stocks

     1,822,795          1,834,668                   3,657,463  

Rights

              491                   491  

U.S. Government Sponsored Agency Securities

              115,663,410                   115,663,410  

U.S. Treasury Obligations

              141,378,516                   141,378,516  

Short-Term Securities

                 

Money Market Funds

     67,099,892                            67,099,892  

U.S. Treasury Obligations

              39,881,813                   39,881,813  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ 676,996,665        $ 879,765,570        $          1,556,762,235  
  

 

 

      

 

 

      

 

 

      

 

 

 

Investments valued at NAV(a)

                    9,325,536  
                 

 

 

 
                  $ 1,566,087,771  
                 

 

 

 

Derivative Financial Instruments(b)

                 

Assets

                 

Equity Contracts

   $ 2,461,860        $ 12,711,192        $        $ 15,173,052  

Interest Rate Contracts

     183,955                            183,955  

Liabilities

                 

Credit Contracts

              (1,153,975                 (1,153,975

Equity Contracts

     (2,747,162                          (2,747,162

Foreign Currency Exchange Contracts

              (137,833                 (137,833

Interest Rate Contracts

     (649,300                          (649,300
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ (750,647      $ 11,419,384        $        $ 10,668,737  
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

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

 

 

  (b) 

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

 

See notes to financial statements.

 

 

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

  25


Statement of Assets and Liabilities (unaudited)

November 30, 2022

 

   

BlackRock

Sustainable Balanced
Fund, Inc.

 

 

 

ASSETS

 

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

  $ 1,477,989,707  

Investments, at value — affiliated(c)

    88,098,064  

Cash

    283,249  

Cash pledged:

 

Collateral — TBA commitments

    650,932  

Futures contracts

    3,017,991  

Centrally cleared swaps

    1,015,000  

Foreign currency, at value(d)

    2,097,468  

Receivables:

 

Securities lending income — affiliated

    7,665  

Capital shares sold

    1,324,141  

Dividends — unaffiliated

    2,292,483  

Dividends — affiliated

    215,792  

Interest — unaffiliated

    3,324,865  

Variation margin on futures contracts

    1,300,390  

Unrealized appreciation on OTC swaps

    12,711,192  

Prepaid expenses

    88,599  
 

 

 

 

Total assets

    1,594,417,538  
 

 

 

 

LIABILITIES

 

Foreign bank overdraft(e)

    79,163  

Cash received as collateral for OTC derivatives

    10,680,268  

Collateral on securities loaned

    9,328,855  

Payables:

 

Investments purchased

    32,730,894  

Capital shares redeemed

    2,724,623  

Investment advisory fees

    505,478  

Directors’ and Officer’s fees

    311  

Other accrued expenses

    165,380  

Other affiliate fees

    45,253  

Service and distribution fees

    251,673  

Variation margin on futures contracts

    1,481,607  

Variation margin on centrally cleared swaps

    156,011  

Unrealized depreciation on forward foreign currency exchange contracts

    137,833  
 

 

 

 

Total liabilities

    58,287,349  
 

 

 

 

NET ASSETS

  $ 1,536,130,189  
 

 

 

 

NET ASSETS CONSIST OF:

 

Paid-in capital

  $ 1,528,794,128  

Accumulated earnings

    7,336,061  
 

 

 

 

NET ASSETS

  $ 1,536,130,189  
 

 

 

 

(a) Investments, at cost — unaffiliated

  $ 1,397,206,853  

(b) Securities loaned, at value

  $ 9,207,564  

(c)  Investments, at cost — affiliated

  $ 88,547,323  

(d) Foreign currency, at cost

  $ 2,008,859  

(e) Foreign bank overdraft, at cost

  $ 75,575  

 

 

26  

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Statement of Assets and Liabilities (unaudited) (continued)

November 30, 2022

 

    BlackRock
Sustainable Balanced
Fund, Inc.
 

 

 

NET ASSET VALUE

 
Institutional      

Net assets

  $ 495,315,964  
 

 

 

 

Shares outstanding

    21,954,500  
 

 

 

 

Net asset value

  $ 22.56  
 

 

 

 

Shares authorized

    400 million  
 

 

 

 

Par value

  $ 0.10  
 

 

 

 
Investor A      

Net assets

  $ 864,925,028  
 

 

 

 

Shares outstanding

    38,582,254  
 

 

 

 

Net asset value

  $ 22.42  
 

 

 

 

Shares authorized

    200 million  
 

 

 

 

Par value

  $ 0.10  
 

 

 

 
Investor C      

Net assets

  $ 94,933,864  
 

 

 

 

Shares outstanding

    5,166,646  
 

 

 

 

Net asset value

  $ 18.37  
 

 

 

 

Shares authorized

    200 million  
 

 

 

 

Par value

  $ 0.10  
 

 

 

 
Class K      

Net assets

  $ 70,310,466  
 

 

 

 

Shares outstanding

    3,116,027  
 

 

 

 

Net asset value

  $ 22.56  
 

 

 

 

Shares authorized

    2 billion  
 

 

 

 

Par value

  $ 0.10  
 

 

 

 
Class R      

Net assets

  $ 10,644,867  
 

 

 

 

Shares outstanding

    532,344  
 

 

 

 

Net asset value

  $ 20.00  
 

 

 

 

Shares authorized

    500 million  
 

 

 

 

Par value

  $ 0.10  
 

 

 

 

See notes to financial statements.

 

 

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

  27


Statement of Operations (unaudited)

Six Months Ended November 30, 2022

 

    BlackRock
Sustainable Balanced
Fund, Inc.
 

 

 

INVESTMENT INCOME

 

Dividends — unaffiliated

  $ 9,262,723  

Dividends — affiliated

    1,340,846  

Interest — unaffiliated

    10,173,306  

Securities lending income — affiliated — net

    20,742  

Foreign taxes withheld

    (378,556
 

 

 

 

Total investment income

    20,419,061  
 

 

 

 

EXPENSES

 

Investment advisory

    3,224,291  

Service and distribution — class specific

    1,589,283  

Transfer agent — class specific

    546,938  

Registration

    79,433  

Professional

    61,783  

Accounting services

    59,810  

Printing and postage

    21,547  

Directors and Officer

    7,659  

Custodian

    6,033  

Miscellaneous

    18,235  
 

 

 

 

Total expenses

    5,615,012  

Less:

 

Fees waived and/or reimbursed by the Manager

    (131,254
 

 

 

 

Total expenses after fees waived and/or reimbursed

    5,483,758  
 

 

 

 

Net investment income

    14,935,303  
 

 

 

 

REALIZED AND UNREALIZED GAIN (LOSS)

 

Net realized gain (loss) from:

 

Investments — unaffiliated

    (39,888,217

Investments — affiliated

    (9,506,486

Futures contracts

    9,178,488  

Forward foreign currency exchange contracts

    227,557  

Foreign currency transactions

    (305,515

Swaps

    (23,511,643
 

 

 

 
    (63,805,816
 

 

 

 

Net change in unrealized appreciation (depreciation) on:

 

Investments — unaffiliated

    (9,540,217

Investments — affiliated

    2,364,267  

Futures contracts

    (3,188,570

Forward foreign currency exchange contracts

    (113,642

Foreign currency translations

    129,990  

Swaps

    19,493,438  
 

 

 

 
    9,145,266  
 

 

 

 

Net realized and unrealized loss

    (54,660,550
 

 

 

 

NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS

  $ (39,725,247
 

 

 

 

See notes to financial statements.

 

 

28  

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Statements of Changes in Net Assets

Six Months Ended November 30, 2022

 

    BlackRock Sustainable Balanced Fund, Inc.  
    Six Months
Ended
11/30/22
(unaudited)
    Period from
10/01/21
to 05/31/22
    Year Ended
09/30/21
 

INCREASE (DECREASE) IN NET ASSETS

     

OPERATIONS

     

Net investment income

  $ 14,935,303     $ 10,762,244     $ 10,908,009  

Net realized gain (loss)

    (63,805,816     5,857,740       217,515,757  

Net change in unrealized appreciation (depreciation)

    9,145,266       (106,551,322     46,066,694  
 

 

 

   

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

    (39,725,247     (89,931,338     274,490,460  
 

 

 

   

 

 

   

 

 

 

DISTRIBUTIONS TO SHAREHOLDERS(a)

     

Institutional

    (19,293,205     (77,221,254     (24,269,626

Investor A

    (31,746,349     (111,883,846     (30,500,926

Investor C

    (4,159,590     (17,181,797     (4,954,528

Class K

    (2,592,592     (8,479,663     (2,474,683

Class R

    (411,460     (1,542,874     (501,960
 

 

 

   

 

 

   

 

 

 

Decrease in net assets resulting from distributions to shareholders

    (58,203,196     (216,309,434     (62,701,723
 

 

 

   

 

 

   

 

 

 

CAPITAL SHARE TRANSACTIONS

     

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

    (34,768,905     135,227,933       146,398,629  
 

 

 

   

 

 

   

 

 

 

NET ASSETS

     

Total increase (decrease) in net assets

    (132,697,348     (171,012,839     358,187,366  

Beginning of period

    1,668,827,537       1,839,840,376       1,481,653,010  
 

 

 

   

 

 

   

 

 

 

End of period

  $ 1,536,130,189     $ 1,668,827,537     $ 1,839,840,376  
 

 

 

   

 

 

   

 

 

 

 

(a) 

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

See notes to financial statements.

 

 

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

  29


Financial Highlights

(For a share outstanding throughout each period)

 

 

             BlackRock Sustainable Balanced Fund, Inc.  
             Institutional  
            Six Months
Ended
11/30/22
        Period
from
10/01/21
          Year
Ended
    Year
Ended
    Year
Ended
    Year
Ended
    Year
Ended
 
            (unaudited)     to 05/31/22           09/30/21     09/30/20     09/30/19     09/30/18     09/30/17  
                     

Net asset value, beginning of period

 

    

  $ 23.94         $ 28.28             $ 24.89     $ 23.32     $ 23.95     $ 26.09     $ 23.86  
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income(a)

      0.24         0.19         0.23       0.33       0.48       0.47       0.41  

Net realized and unrealized gain (loss)

      (0.77       (1.27       4.22       2.47       0.52       1.89       3.01  
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from investment operations

      (0.53       (1.08       4.45       2.80       1.00       2.36       3.42  
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions(b)

 

     

From net investment income

      (0.13       (0.11       (0.24     (0.37     (0.41     (0.47     (0.40

From net realized gain

      (0.72       (3.15       (0.82     (0.86     (1.22     (4.03     (0.79
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

      (0.85       (3.26       (1.06     (1.23     (1.63     (4.50     (1.19
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of period

    $ 22.56       $ 23.94       $ 28.28     $ 24.89     $ 23.32     $ 23.95     $ 26.09  
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Return(c)

 

     

Based on net asset value

      (2.03 )%(d)        (4.88 )%(d)        18.30     12.35     5.16     10.14     14.83 %(e) 
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets(f)

 

     

Total expenses

      0.52 %(g)        0.71 %(g)(h)        0.75 %(i)      0.78 %(j)      0.80     0.91     0.93
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

      0.51 %(g)        0.50 %(g)(h)        0.50 %(i)      0.52 %(j)      0.53     0.62     0.62
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

      2.15 %(g)        1.08 %(g)(h)        0.85 %(i)      1.42 %(j)      2.11     1.97     1.67
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Data

 

     

Net assets, end of period (000)

    $ 495,316       $ 554,201       $ 666,819     $ 568,977     $ 488,105     $ 427,511     $ 395,850  
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate of the Fund(k)

      86       296               4     140     109
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate of the Master Total Return Portfolio(l)

      N/A         N/A         459     556     574     734     806
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate of the Master Advantage Large Cap Core Portfolio

      N/A         N/A         111     99     151     148     130
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(a)

Based on average shares outstanding.

(b) 

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

(c) 

Where applicable, assumes the reinvestment of distributions.

(d) 

Not annualized.

(e) 

Includes proceeds received from a settlement of litigation, which had no impact on the Fund’s total return.

(f) 

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

(g) 

Annualized.

(h) 

From October 1, 2021 through April 1, 2022, the Fund invested in the Master Advantage Large Cap Core Portfolio and the Master Total Return Portfolio (the “Master Portfolios”) as part of a master-feeder structure and received its corresponding allocated fees waived and expenses and/or net investment income from the Master Portfolios. Includes the Fund’s share of the Master Portfolios’ allocated fees waived of less than 0.01%.

(i) 

Includes the Fund’s share of the Master Portfolios’ allocated expenses and/or net investment income. Includes the Fund’s share of the Master Portfolios’ allocated fees waived of less than 0.01%.

(j) 

Includes the Fund’s share of the Master Portfolios’ allocated expenses and/or net investment income. Includes the Fund’s share of the Master Portfolios’ allocated fees waived of 0.01%.

(k) 

Excludes transactions in the Master Portfolios.

(l) 

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

 

               Six Months
Ended
11/30/22
(unaudited)
    Period from
10/01/21 to
05/31/22
     Year Ended
09/30/21
    Year Ended
09/30/20
    Year Ended
09/30/19
    Year Ended
09/30/18
    Year Ended
09/30/17
 
  Portfolio turnover rate (excluding MDRs)      65     N/A        161     274     241     350     540
    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See notes to financial statements.

 

 

30  

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


Financial Highlights (continued)

(For a share outstanding throughout each period)

 

             BlackRock Sustainable Balanced Fund, Inc. (continued)  
             Investor A  
            Six Months
Ended
11/30/22
        Period from
10/01/21
        Year Ended     Year Ended     Year Ended     Year Ended     Year Ended  
            (unaudited)         to 05/31/22         09/30/21     09/30/20     09/30/19     09/30/18     09/30/17  
                     

Net asset value, beginning of period

 

      

  $ 23.79         $ 28.14         $ 24.78     $ 23.22     $ 23.86     $ 26.00     $ 23.78  
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income(a)

      0.21         0.15         0.16       0.27       0.41       0.40       0.34  

Net realized and unrealized gain (loss)

      (0.75       (1.27       4.20       2.46       0.52       1.89       3.01  
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from investment operations

      (0.54       (1.12       4.36       2.73       0.93       2.29       3.35  
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions(b)

 

     

From net investment income

      (0.11       (0.08       (0.18     (0.31     (0.35     (0.40     (0.34

From net realized gain

      (0.72       (3.15       (0.82     (0.86     (1.22     (4.03     (0.79
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

      (0.83       (3.23       (1.00     (1.17     (1.57     (4.43     (1.13
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of period

    $ 22.42       $ 23.79       $ 28.14     $ 24.78     $ 23.22     $ 23.86     $ 26.00  
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Return(c)

 

     

Based on net asset value

      (2.12 )%(d)        (5.06 )%(d)        17.98     12.08     4.84     9.86     14.52 %(e) 
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets(f)

 

     

Total expenses

      0.78 %(g)        0.95 %(g)(h)        1.01 %(i)      1.04 %(j)      1.07 %(j)      1.20 %(i)      1.21 %(i) 
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

      0.76 %(g)        0.75 %(g)(h)        0.76 %(i)      0.79 %(j)      0.80 %(j)      0.91 %(i)      0.90 %(i) 
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

      1.90 %(g)        0.84 %(g)(h)        0.59 %(i)      1.15 %(j)      1.83 %(j)      1.68 %(i)      1.38 %(i) 
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Data

 

     

Net assets, end of period (000)

    $ 864,925       $ 922,198       $ 952,967     $ 737,708     $ 594,909     $ 528,701     $ 535,542  
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate of the Fund(k)

      86       296               4     140     109
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate of the Master Total Return Portfolio(l)

      N/A         N/A         459     556     574     734     806
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate of the Master Advantage Large Cap Core Portfolio

      N/A         N/A         111     99     151     148     130
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) Based on average shares outstanding.

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

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

(d) Not annualized.

(e) Includes proceeds received from a settlement of litigation, which had no impact on the Fund’s total return.

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

(g) Annualized.

(h) From October 1, 2021 through April 1, 2022, the Fund invested in the Master Portfolios as part of a master-feeder structure and received its corresponding allocated fees waived and expenses and/or net investment income from the Master Portfolios. Includes the Fund’s share of the Master Portfolios’ allocated fees waived of less than 0.01%.

(i)  Includes the Fund’s share of the Master Portfolios’ allocated expenses and/or net investment income. Includes the Fund’s share of the Master Portfolios’ allocated fees waived of less than 0.01%.

(j)  Includes the Fund’s share of the Master Portfolios’ allocated expenses and/or net investment income. Includes the Fund’s share of the Master Portfolios’ allocated fees waived of 0.01%.

(k)  Excludes transactions in the Master Portfolios.

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

 

               Six Months
Ended
11/30/22
(unaudited)
    Period from
10/01/21 to
05/31/22
     Year Ended
09/30/21
    Year Ended
09/30/20
    Year Ended
09/30/19
    Year Ended
09/30/18
    Year Ended
09/30/17
 
  Portfolio turnover rate (excluding MDRs)      65     N/A        161     274     241     350     540
    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See notes to financial statements.

 

 

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

  31


Financial Highlights (continued)

(For a share outstanding throughout each period)

 

            

BlackRock Sustainable Balanced Fund, Inc. (continued)

 
            

Investor C

 
            Six Months
Ended
11/30/22
        Period from
10/01/21
          Year Ended     Year Ended     Year Ended     Year Ended     Year Ended  
            (unaudited)         to 05/31/22           09/30/21     09/30/20     09/30/19     09/30/18     09/30/17  
                     

Net asset value, beginning of period

 

    

  $ 19.67         $ 23.81             $ 21.15     $ 20.00     $ 20.79     $ 23.21     $ 21.34  
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)(a)

      0.10         0.01         (0.04     0.08       0.21       0.19       0.14  

Net realized and unrealized gain (loss)

      (0.64       (1.01       3.57       2.10       0.43       1.67       2.68  
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from investment operations

      (0.54       (1.00       3.53       2.18       0.64       1.86       2.82  
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions(b)

 

     

From net investment income

      (0.04               (0.05     (0.17     (0.21     (0.25     (0.16

From net realized gain

      (0.72       (3.14       (0.82     (0.86     (1.22     (4.03     (0.79
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

      (0.76       (3.14       (0.87     (1.03     (1.43     (4.28     (0.95
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of period

    $ 18.37       $ 19.67       $ 23.81     $ 21.15     $ 20.00     $ 20.79     $ 23.21  
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Return(c)

 

     

Based on net asset value

      (2.56 )%(d)        (5.49 )%(d)        17.07     11.20     4.09     9.03     13.62 %(e) 
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets(f)

 

     

Total expenses

      1.54 %(g)        1.72 %(g)(h)        1.78 %(i)      1.80 %(j)      1.83     1.95     1.97
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

      1.52 %(g)        1.52 %(g)(h)        1.52 %(i)      1.55 %(j)      1.56     1.66     1.66
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)

      1.14 %(g)        0.07 %(g)(h)        (0.17 )%(i)      0.41 %(j)      1.07     0.93     0.63
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Data

 

     

Net assets, end of period (000)

    $ 94,934       $ 110,628       $ 134,700     $ 126,159     $ 125,584     $ 103,756     $ 104,113  
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate of the Fund(k)

      86       296               4     140     109
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate of the Master Total Return Portfolio(l)

      N/A         N/A         459     556     574     734     806
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate of the Master Advantage Large Cap Core

Portfolio

      N/A         N/A         111     99     151     148     130
     

 

 

     

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
(a) 

Based on average shares outstanding.

(b) 

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

(c) 

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

(d) 

Not annualized.

(e) 

Includes proceeds received from a settlement of litigation, which had no impact on the Fund’s total return.

(f) 

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

(g) 

Annualized.

(h) 

From October 1, 2021 through April 1, 2022, the Fund invested in the Master Portfolios as part of a master-feeder structure and received its corresponding allocated fees waived and expenses and/or net investment income from the Master Portfolios. Includes the Fund’s share of the Master Portfolios’ allocated fees waived of less than 0.01%.

(i) 

Includes the Fund’s share of the Master Portfolios’ allocated expenses and/or net investment income. Includes the Fund’s share of the Master Portfolios’ allocated fees waived of less than 0.01%.

(j) 

Includes the Fund’s share of the Master Portfolios’ allocated expenses and/or net investment income. Includes the Fund’s share of the Master Portfolios’ allocated fees waived of 0.01%.

(k) 

Excludes transactions in the Master Portfolios.

(l)

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

 

              Six Months
Ended
11/30/22
(unaudited)
    Period from
10/01/21 to
05/31/22
     Year Ended
09/30/21
    Year Ended
09/30/20
    Year Ended
09/30/19
    Year Ended
09/30/18
    Year Ended
09/30/17
 
 

Portfolio turnover rate (excluding MDRs)

    65     N/A        161     274     241     350     540
   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See notes to financial statements.

 

 

32  

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


Financial Highlights (continued)

(For a share outstanding throughout each period)

 

    BlackRock Sustainable Balanced Fund, Inc. (continued)  
    Class K  
    Six Months
Ended
11/30/22
(unaudited)
    Period from
10/01/21
to 05/31/22
    Year Ended
09/30/21
    Year Ended
09/30/20
    Year Ended
09/30/19
    Period from
01/25/18(a)
to 09/30/18
 
             

Net asset value, beginning of period

  $ 23.94     $ 28.28     $ 24.89     $ 23.32     $ 23.95     $ 23.61  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income(b)

    0.24       0.20       0.25       0.34       0.49       0.33  

Net realized and unrealized gain (loss)

    (0.76     (1.27     4.22       2.47       0.52       0.25  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from investment operations

    (0.52     (1.07     4.47       2.81       1.01       0.58  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions(c)

           

From net investment income

    (0.14     (0.12     (0.26     (0.38     (0.42     (0.24

From net realized gain

    (0.72     (3.15     (0.82     (0.86     (1.22      
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

    (0.86     (3.27     (1.08     (1.24     (1.64     (0.24
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of period

  $ 22.56     $ 23.94     $ 28.28     $ 24.89     $ 23.32     $ 23.95  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Return(d)

           

Based on net asset value

    (2.00 )%(e)      (4.84 )%(e)      18.36     12.42     5.23     2.46 %(e) 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets(f)

           

Total expenses

    0.46 %(g)      0.64 %(g)(h)      0.69 %(i)      0.72 %(j)      0.73     0.81 %(g) 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

    0.44 %(g)      0.44 %(g)(h)      0.44 %(i)      0.46 %(j)      0.46     0.51 %(g) 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

    2.22 %(g)      1.15 %(g)(h)      0.90 %(i)      1.47 %(j)      2.15     2.07 %(g) 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Data

           

Net assets, end of period (000)

  $ 70,310     $ 70,740     $ 72,222     $ 36,970     $ 21,901     $ 8,283  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate of the Fund(k)

    86     296             4     140 %(l) 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate of the Master Total Return Portfolio(m)

    N/A       N/A       459     556     574     734 %(l) 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate of the Master Advantage Large Cap Core Portfolio

    N/A       N/A       111     99     151     148 %(l) 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) 

Commencement of operations.

(b) 

Based on average shares outstanding.

(c) 

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

(d) 

Where applicable, assumes the reinvestment of distributions.

(e)

Not annualized.

(f) 

Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. (g) Annualized.

(h) 

From October 1, 2021 through April 1, 2022, the Fund invested in the Master Portfolios as part of a master-feeder structure and received its corresponding allocated fees waived and expenses and/or net investment income from the Master Portfolios. Includes the Fund’s share of the Master Portfolios’ allocated fees waived of less than 0.01%.

(i) 

Includes the Fund’s share of the Master Portfolios’ allocated expenses and/or net investment income. Includes the Fund’s share of the Master Portfolios’ allocated fees waived of less than 0.01%.

(j) 

Includes the Fund’s share of the Master Portfolios’ allocated expenses and/or net investment income. Includes the Fund’s share of the Master Portfolios’ allocated fees waived of 0.01%.

(k)

Excludes transactions in the Master Portfolios.

(l) 

Portfolio turnover is representative of the Fund for the entire year.

(m)

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

 

               Six Months
Ended
11/30/22
(unaudited)
    Period from
10/01/21 to
05/31/22
     Year Ended
09/30/21
    Year Ended
09/30/20
    Year Ended
09/30/19
    Period from
01/25/18(a)
to 09/30/18  
 
  Portfolio turnover rate      65     N/A        161     274     241     350
    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

See notes to financial statements.

 

 

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

  33


Financial Highlights (continued)

(For a share outstanding throughout each period)

 

    BlackRock Sustainable Balanced Fund, Inc. (continued)  
    Class R  
    Six Months
Ended
11/30/22
(unaudited)
   

Period from
10/01/21

to 05/31/22

    Year Ended
09/30/21
    Year Ended
09/30/20
    Year Ended
09/30/19
    Year Ended
09/30/18
    Year Ended
09/30/17
 

Net asset value, beginning of period

  $ 21.32     $ 25.55     $ 22.59     $ 21.27     $ 22.00     $ 24.30     $ 22.31  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income(a)

    0.15       0.07       0.05       0.17       0.31       0.29       0.24  

Net realized and unrealized gain (loss)

    (0.68     (1.12     3.83       2.24       0.46       1.77       2.81  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from investment operations

    (0.53     (1.05     3.88       2.41       0.77       2.06       3.05  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions(b)

             

From net investment income

    (0.07     (0.03     (0.10     (0.23     (0.28     (0.33     (0.27

From net realized gain

    (0.72     (3.15     (0.82     (0.86     (1.22     (4.03     (0.79
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

    (0.79     (3.18     (0.92     (1.09     (1.50     (4.36     (1.06
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of period

  $ 20.00     $ 21.32     $ 25.55     $ 22.59     $ 21.27     $ 22.00     $ 24.30  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Return(c)

             

Based on net asset value

    (2.30 )%(d)      (5.32 )%(d)      17.56     11.67     4.47     9.51     14.11 %(e) 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets(f)

             

Total expenses

    1.17 %(g)      1.35 %(g)(h)      1.39 %(i)      1.40 %(j)      1.41 %(j)      1.55 %(i)      1.56 %(i) 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

    1.15 %(g)      1.14 %(g)(h)      1.13 %(i)      1.15 %(j)      1.14 %(j)      1.26 %(i)      1.25 %(i) 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

    1.51 %(g)      0.44 %(g)(h)      0.21 %(i)      0.82 %(j)      1.50 %(j)      1.33 %(i)      1.04 %(i) 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Data

             

Net assets, end of period (000)

  $ 10,645     $ 11,061     $ 13,132     $ 11,840     $ 11,833     $ 14,363     $ 16,257  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate of the Fund(k)

    86     296             4     140     109
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate of the Master Total Return Portfolio(l)

    N/A       N/A       459     556     574     734     806
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate of the Master Advantage Large Cap Core Portfolio

    N/A       N/A       111     99     151     148     130
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(a)

Based on average shares outstanding.

(b) 

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

(c)

Where applicable, assumes the reinvestment of distributions.

(d) 

Not annualized.

(e) 

Includes proceeds received from a settlement of litigation, which had no impact on the Fund’s total return.

(f) 

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

(g) 

Annualized.

(h) 

From October 1, 2021 through April 1, 2022, the Fund invested in the Master Portfolios as part of a master-feeder structure and received its corresponding allocated fees waived and expenses and/or net investment income from the Master Portfolios. Includes the Fund’s share of the Master Portfolios’ allocated fees waived of less than 0.01%.

(i) 

Includes the Fund’s share of the Master Portfolios’ allocated expenses and/or net investment income. Includes the Fund’s share of the Master Portfolios’ allocated fees waived of less than 0.01%.

(j) 

Includes the Fund’s share of the Master Portfolios’ allocated expenses and/or net investment income. Includes the Fund’s share of the Master Portfolios’ allocated fees waived of 0.01%.

(k) 

Excludes transactions in the Master Portfolios.

(l) 

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

 

              Six Months
Ended
11/30/22
(unaudited)
    Period from
10/01/21 to
05/31/22
     Year Ended
09/30/21
    Year Ended
09/30/20
    Year Ended
09/30/19
    Year Ended
09/30/18
    Year Ended
09/30/17
 
 

Portfolio turnover rate (excluding MDRs)

    65     N/A        161     274     241     350     540
   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See notes to financial statements.

 

 

34  

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Notes to Financial Statements (unaudited)

 

1.

ORGANIZATION

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

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

The Board of Directors of the Fund is referred to throughout this report as the “Board” and the members are referred to as “Directors.”

 

 

 
Share Class   Initial Sales Charge      CDSC     Conversion Privilege  

 

 

Institutional, Class K and Class R Shares

    No        No       None  

Investor A Shares

    Yes        No (a)      None  

Investor C Shares

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

 

 

 

  (a)

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

 
  (b)

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

 

On November 9, 2021, the Board of Directors of the Fund (the “Board”) approved the repurpose of BlackRock Balanced Capital Fund, Inc. to BlackRock Sustainable Balanced Fund, Inc., including certain changes to the Fund’s investment strategy and investment process. As part of the repurpose, the Fund redeemed its investments in Master Advantage Large Cap Core Portfolio and Master Total Return Portfolio (the “Master Portfolios”) and began to operate as a stand-alone fund holding individual securities. The Fund’s name change and certain changes to the Fund’s investment strategy and investment process were effective April 8, 2022. The change into a stand-alone structure did not result in a change in net assets of the Fund and did not create a taxable event for the Fund or its shareholders.

The Fund, together with certain other registered investment companies advised by the Manager or its affiliates, is included in a complex of funds referred to as the BlackRock Multi-Asset Complex.

 

2.

SIGNIFICANT ACCOUNTING POLICIES

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

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

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

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

Foreign Taxes: The Fund may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Fund invests. These foreign taxes, if any, are paid by the Fund and are reflected in its Statement of Operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on stock dividends are presented as “Foreign taxes withheld”, and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable or deferred as of November 30, 2022, if any, are disclosed in the Statement of Assets and Liabilities.

 

 

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

  35


Notes to Financial Statements (unaudited) (continued)

 

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

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

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

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

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

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

 

3.

INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

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

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

 

   

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

 

   

Fixed-income investments for which market quotations are readily available are generally valued using the last available bid price or current market quotations provided by independent dealers or third-party pricing services. Floating rate loan interests are valued at the mean of the bid prices from one or more independent brokers or dealers as obtained from a third-party pricing service. Pricing services generally value fixed-income securities assuming orderly transactions of an institutional round lot size, but a fund may hold or transact in such securities in smaller, odd lot sizes. Odd lots may trade at lower prices than institutional round lots. The pricing services may use matrix pricing or valuation models that utilize certain inputs and assumptions to derive values, including transaction data (e.g., recent representative bids and offers), market data, credit quality information, perceived market movements, news, and other relevant information. Certain fixed-income securities, including asset-backed and mortgage related securities may be valued based on valuation models that consider the estimated cash flows of each tranche of the entity, establish a benchmark yield and develop an estimated tranche specific spread to the benchmark yield based on the unique attributes of the tranche. The amortized cost method of valuation may be used with respect to debt obligations with sixty days or less remaining to maturity unless the Manager determines such method does not represent fair value.

 

   

Exchange-traded funds (“ETFs”) and closed-end funds traded on a recognized securities exchange are valued at that day’s official closing price, as applicable, on the exchange where the stock is primarily traded. ETFs and closed-end funds traded on a recognized exchange for which there were no sales on that day may be valued at the last available bid (long positions) or ask (short positions) price.

 

   

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

 

   

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

 

   

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

 

   

Forward foreign currency exchange contracts are valued at the mean between the bid and ask prices and are determined as of the close of trading on the NYSE based on that day’s prevailing forward exchange rate for the underlying currencies.

 

   

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

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

 

 

36  

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Notes to Financial Statements (unaudited) (continued)

 

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

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

 

   

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

 

   

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

 

   

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

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

 

4.

SECURITIES AND OTHER INVESTMENTS

Mortgage-Backed Securities: For mortgage pass-through securities (the “Mortgage Assets”) 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.

Zero-Coupon Bonds: Zero-coupon bonds are normally issued at a significant discount from face value and do not provide for periodic interest payments. These bonds may experience greater volatility in market value than other debt obligations of similar maturity which provide for regular interest payments.

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

TBA Commitments: TBA commitments are forward agreements for the purchase or sale of securities, including 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, a fund 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, if there are expenses or delays in connection with the TBA transactions, or if the counterparty fails to complete the transaction.

In order to better define contractual rights and to secure rights that will help a fund mitigate its counterparty risk, TBA commitments may be entered into by a fund 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 a fund and the counterparty. Cash collateral that has been pledged to cover the obligations of a fund and cash collateral received from the counterparty, if any, is reported separately in 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 a fund, if any, is noted in the Schedule of Investments. Typically, a fund is permitted to sell, re-pledge or use the collateral it receives; however, the counterparty is not permitted to do so. To the extent amounts due to a fund are not fully collateralized, contractually or otherwise, a fund bears the risk of loss from counterparty non-performance.

Mortgage Dollar Roll Transactions: The Fund 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, a fund is not entitled to receive interest

 

 

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

  37


Notes to Financial Statements (unaudited) (continued)

 

and principal payments on the securities sold. Mortgage dollar roll transactions are treated as purchases and sales and a fund realizes gains and losses on these transactions. Mortgage dollar rolls involve the risk that the market value of the securities that a fund is required to purchase may decline below the agreed upon repurchase price of those securities.

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

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

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

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

 

         
Counterparty   Securities
Loaned at Value
     Cash
Collateral Received(a)
    Non-Cash
Collateral Received(a)
     Net
Amount(b)
 

Barclays Capital, Inc.

  $ 2,212,000      $ (2,212,000   $      $  

J.P. Morgan Securities LLC

    44,321        (30,750            13,571  

Jefferies LLC

    6,951,243        (6,951,243             
 

 

 

    

 

 

   

 

 

    

 

 

 
  $ 9,207,564      $ (9,193,993   $      $ 13,571  
 

 

 

    

 

 

   

 

 

    

 

 

 

 

  (a)

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

 
  (b)

The market value of the loaned securities is determined as of November 30, 2022. Additional collateral is delivered to the Fund on the next business day in accordance with the MSLA. The net amount would be subject to the borrower default indemnity in the event of default by the counterparty.

 

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

 

5.

DERIVATIVE FINANCIAL INSTRUMENTS

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

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

Futures contracts are exchange-traded agreements between the Fund and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and on a specified date. Depending on the terms of a contract, it is settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash amount on the settlement date. Upon entering into a futures contract, the Fund 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. Amounts pledged, which are considered restricted, are included in cash pledged for futures contracts in the Statement of Assets and Liabilities.

 

 

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Notes to Financial Statements (unaudited) (continued)

 

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

Forward Foreign Currency Exchange Contracts: Forward foreign currency exchange contracts are entered into to gain or reduce exposure to 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 specified date. These contracts help to manage the overall exposure to the currencies in which some of the investments held by the Fund are denominated and in some cases, may be used to obtain exposure to a particular market. The contracts are traded OTC and not on an organized exchange.

The contract is marked-to-market daily and the change in market value is recorded as unrealized appreciation (depreciation) in the Statement of Assets and Liabilities. When a contract is closed, a realized gain or loss is recorded in the Statement of Operations equal to the difference between the value at the time it was opened and the value at the time it was closed. Non-deliverable forward foreign currency exchange contracts are settled with the counterparty in cash without the delivery of foreign currency. 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, and such value may exceed the amount(s) reflected in the Statement of Assets and Liabilities. Cash amounts pledged for forward foreign currency exchange contracts are considered restricted and are included in cash pledged as collateral for OTC derivatives in the Statement of Assets and Liabilities. A Fund’s risk of loss from counterparty credit risk on OTC derivatives is generally limited to the aggregate unrealized gain netted against any collateral held by the Fund.

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

For OTC swaps, any upfront premiums paid and any upfront fees received are shown as swap premiums paid and swap premiums received, respectively, in the Statement of Assets and Liabilities and amortized over the term of the contract. The daily fluctuation in market value is recorded as unrealized appreciation (depreciation) on OTC Swaps in the Statement of Assets and Liabilities. Payments received or paid are recorded in the Statement of Operations as realized gains or losses, respectively. When an OTC swap is terminated, a realized gain or loss is recorded in the Statement of Operations equal to the difference between the proceeds from (or cost of) the closing transaction and the Fund’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 contract, the swap contract is novated to a central counterparty (the “CCP”) and the CCP becomes the Fund’s counterparty on the swap. The Fund is required to interface with the CCP through the broker. Upon entering into a centrally cleared swap, the Fund is required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on the size and risk profile of the particular swap. Securities deposited as initial margin are designated in the Schedule of Investments and cash deposited is shown as cash pledged for centrally cleared swaps in the Statement of Assets and Liabilities. Amounts pledged, which are considered restricted cash, are included in cash pledged for centrally cleared swaps in the Statement of Assets and Liabilities. Pursuant to the contract, the Fund agrees to receive from or pay to the broker variation margin. Variation margin is recorded as unrealized appreciation (depreciation) and shown as variation margin receivable (or payable) on centrally cleared swaps in the Statement of Assets and Liabilities. Payments received from (paid to) the counterparty are amortized over the term of the contract and recorded as realized gains (losses) in the Statement of Operations, including those at termination.

 

   

Credit default swaps — Credit default swaps are entered into to manage exposure to the market or certain sectors of the market, to reduce risk exposure to defaults of corporate and/or sovereign issuers or to create exposure to corporate and/or sovereign issuers to which a fund is not otherwise exposed (credit risk).

The Fund 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 are agreements in which the protection buyer pays fixed periodic payments to the seller in consideration for a promise 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 acceleration, repudiation, moratorium or restructuring). As a buyer, if an underlying credit event occurs, the Fund 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 Fund 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 — Total return swaps are entered into to obtain exposure to a security or market without owning such security or investing directly in such market or to exchange the risk/return of one security or market (e.g., fixed-income) with another security or market (e.g., equity or commodity prices) (equity risk, commodity price risk and/or interest rate risk).

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

 

 

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Notes to Financial Statements (unaudited) (continued)

 

Swap transactions involve, to varying degrees, elements of interest rate, credit and market risks 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.

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

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 Fund and the counterparty.

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

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

 

6.

INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

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

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

 

   
Average Daily Net Assets   Investment Advisory Fees  

First $250 million

    0.500

$250 million — $300 million

    0.450  

$300 million — $400 million

    0.425  

Greater than $400 million

    0.400  

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

 

     
Share Class   Service Fees     Distribution Fees  

Investor A

    0.25     N/A  

Investor C

    0.25       0.75

Class R

    0.25       0.25  

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

For the six months ended November 30, 2022, the following table shows the class specific service and distribution fees borne directly by each share class of the Fund:

 

         
     Investor A        Investor C        Class R        Total  

Service and distribution — class specific

  $ 1,071,084        $ 492,139        $ 26,060        $ 1,589,283  

 

 

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Notes to Financial Statements (unaudited) (continued)

 

Transfer Agent: Pursuant to written agreements, certain financial intermediaries, some of which may be affiliates, provide the Fund with sub-accounting, recordkeeping, sub-transfer agency and other administrative services with respect to servicing of underlying investor accounts. For these services, these entities receive an asset-based fee or an annual fee per shareholder account, which will vary depending on share class and/or net assets. For the six months ended November 30, 2022, the Fund did not pay any amounts to affiliates in return for these services.

The Manager maintains a call center that is responsible for providing certain shareholder services to the Fund. Shareholder services include responding to inquiries and processing purchases and sales based upon instructions from shareholders. For the six months ended November 30, 2022, the Fund reimbursed the Manager the following amounts for costs incurred in running the call center, which are included in transfer agent — class specific in the Statement of Operations:

 

             
     Institutional      Investor A      Investor C      Class K      Class R      Total  

Reimbursed amounts

  $ 5,719      $ 10,638      $ 2,963      $ 59      $ 55      $ 19,434  

For the six months ended November 30, 2022, the following table shows the class specific transfer agent fees borne directly by each share class of the Fund:

 

             
     Institutional      Investor A      Investor C      Class K      Class R      Total  

Transfer agent — class specific

  $ 181,098      $ 310,748      $ 41,388      $ 2,438      $ 11,266      $ 546,938  

Other Fees: For the six months ended November 30, 2022, affiliates earned underwriting discounts, direct commissions and dealer concessions on sales of the Fund’s Investor A Shares of $8,415.

For the six months ended November 30, 2022, affiliates received CDSCs as follows:

 

 

 
Share Class   Amounts  

 

 

Investor A

  $ 28,741  

Investor C

    5,120  

 

 

Expense Limitations, Waivers and Reimbursements: The Manager contractually agreed to waive its investment advisory fees by the amount of investment advisory fees the Fund pays to the Manager indirectly through its investment in affiliated money market funds (the “affiliated money market fund waiver”) through June 30, 2024. The contractual agreement may be terminated upon 90 days’ notice by a majority of the directors who are not “interested persons” of the Fund, as defined in the 1940 Act (“Independent Directors”), or by a vote of a majority of the outstanding voting securities of the Fund. This amount is included in fees waived and/or reimbursed by the Manager in the Statement of Operations. For the six months ended November 30, 2022, the amount waived was $36,500.

The Manager has contractually agreed to waive its investment advisory fee with respect to any portion of the Fund’s assets invested in affiliated equity and fixed-income mutual funds and affiliated exchange-traded funds that have a contractual management fee through June 30, 2024. The contractual agreement may be terminated upon 90 days’ notice by a majority of the Independent Directors, or by a vote of a majority of the outstanding voting securities of the Fund. For the six months ended November 30, 2022, the Manager waived $94,754 in investment advisory fees pursuant to this arrangement.

Securities Lending: The U.S. Securities and Exchange Commission (“SEC”) has issued an exemptive order which permits BIM, an affiliate of the Manager, to serve as securities lending agent for the Fund, subject to applicable conditions. As securities lending agent, BIM bears all operational costs directly related to securities lending. The Fund is responsible for expenses in connection with the investment of cash collateral received for securities on loan (the “collateral investment expenses”). The cash collateral is invested in a private investment company, Money Market Series, managed by the Manager or its affiliates. However, BIM has agreed to cap the collateral investment expenses of the Money Market Series to an annual rate of 0.04%. The investment adviser to the Money Market Series will not charge any advisory fees with respect to shares purchased by the Fund. The Money Market Series may, under certain circumstances, impose a liquidity fee of up to 2% of the value withdrawn or temporarily restrict withdrawals for up to 10 business days during a 90 day period, in the event that the private investment company’s weekly liquid assets fall below certain thresholds. The Money Market Series seeks current income consistent with maintaining liquidity and preserving capital. Although the Money Market Series is not registered under the 1940 Act, its investments may follow the parameters of investments by a money market fund that is subject to Rule 2a-7 under the 1940 Act.

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

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

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

The share of securities lending income earned by the Fund is shown as securities lending income — affiliated — net in the Statement of Operations. For the six months ended November 30, 2022, the Fund paid BIM $4,865 for securities lending agent services.

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

 

 

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Notes to Financial Statements (unaudited) (continued)

 

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

During the six months ended November 30, 2022, the Fund did not participate in the Interfund Lending Program.

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

Other Transactions: The Fund may purchase securities from, or sell securities to, an affiliated fund provided the affiliation is due solely to having a common investment adviser, common officers, or common directors. For the six months ended November 30, 2022, the purchase and sale transactions and any net realized gains (losses) with an affiliated fund in compliance with Rule 17a-7 under the 1940 Act were as follows:

 

     
Purchases   Sales   Net Realized Loss

$ 72,931,370

  $38,555,906   $(2,220,562)

 

 

7.

PURCHASES AND SALES

For the six months ended November 30, 2022, 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

  $ 631,787,594      $ 606,213,270  

U.S. Government Securities

    606,881,054        605,782,404  

 

 

For the six months ended November 30, 2022, purchases and sales related to mortgage dollar rolls were as follows:

 

     
     Purchases      Sales  

Mortgage Dollar Rolls

  $ 296,825,354      $ 297,144,550  

 

 

 

8.

INCOME TAX INFORMATION

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

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

Management has analyzed tax laws and regulations and their application to the Fund as of November 30, 2022, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Fund’s financial statements.

As of November 30, 2022, gross unrealized appreciation and depreciation based on cost of investments (including short positions and derivatives, if any) for U.S. federal income tax purposes were as follows:

 

 

 
Fund Name   Tax Cost      Gross Unrealized
Appreciation
     Gross Unrealized
Depreciation
    Net Unrealized
Appreciation
(Depreciation)
 

 

 

BlackRock Sustainable Balanced Fund, Inc.

  $ 1,503,445,131      $ 155,945,598      $ (82,634,221   $ 73,311,377  

 

 

 

9.

BANK BORROWINGS

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

 

 

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Notes to Financial Statements (unaudited) (continued)

 

renewed. These fees were allocated among such funds based upon portions of the aggregate commitment available to them and relative net assets of Participating Funds. During the six months ended November 30, 2022, the Fund did not borrow under the credit agreement.

 

10.

PRINCIPAL RISKS

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

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

Market Risk: The Fund may be exposed to prepayment risk, which is the risk that borrowers may exercise their option to prepay principal earlier than scheduled during periods of declining interest rates, which would force the Fund to reinvest in lower yielding securities. The Fund may also be exposed to reinvestment risk, which is the risk that income from the Fund’s portfolio will decline if the Fund invests the proceeds from matured, traded or called fixed-income securities at market interest rates that are below the Fund portfolio’s current earnings rate.

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

Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. The Fund may invest in illiquid investments. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. The Fund may experience difficulty in selling illiquid investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause the Fund’s NAV to experience significant increases or decreases over short periods of time. If there is a general decline in the securities and other markets, the NAV of the Fund may lose value, regardless of the individual results of the securities and other instruments in which the Fund invests.

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

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

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 Fund 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 Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures 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 Fund.

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

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

 

 

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

  43


Notes to Financial Statements (unaudited) (continued)

 

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

LIBOR Transition Risk: The United Kingdom’s Financial Conduct Authority announced a phase out of the London Interbank Offered Rate (“LIBOR”). Although many LIBOR rates ceased to be published or no longer are representative of the underlying market they seek to measure after December 31, 2021, a selection of widely used USD LIBOR rates will continue to be published through June 2023 in order to assist with the transition. The Fund may be exposed to financial instruments tied to LIBOR to determine payment obligations, financing terms, hedging strategies or investment value. The transition process away from LIBOR might lead to increased volatility and illiquidity in markets for, and reduce the effectiveness of new hedges placed against instruments whose terms currently include LIBOR. The ultimate effect of the LIBOR transition process on the Fund is uncertain.

 

11.

CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for each class were as follows:

 

     Six Months Ended 11/30/22     Period from
10/01/21 to 05/31/22
    Year Ended 09/30/21  
Share Class   Shares     Amount     Shares     Amount     Shares     Amount  

Institutional

           

Shares sold

    1,562,775     $ 34,037,107       2,860,491     $ 76,240,573       5,009,623     $ 135,303,668  

Shares issued in reinvestment of distributions

    772,297       16,650,714       2,582,741       68,225,321       800,169       20,675,199  

Shares redeemed

    (3,531,906     (77,453,516     (5,872,168     (150,937,457     (5,087,561     (138,660,334
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    (1,196,834   $ (26,765,695     (428,936   $ (6,471,563     722,231     $ 17,318,533  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investor A

           

Shares sold

    2,935,075     $ 64,188,373       6,008,063     $ 159,907,496       8,487,976     $ 229,471,691  

Shares issued in reinvestment of distributions

    1,386,573       29,742,001       3,979,236       104,571,973       1,096,073       28,118,598  

Shares redeemed

    (4,495,941     (97,670,498     (5,100,234     (133,138,638     (5,489,051     (147,513,575
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    (174,293   $ (3,740,124     4,887,065     $ 131,340,831       4,094,998     $ 110,076,714  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investor C

           

Shares sold

    290,550     $ 5,255,142       668,472     $ 14,768,020       1,535,210     $ 34,781,850  

Shares issued in reinvestment of distributions

    228,653       4,031,154       763,219       16,622,911       222,547       4,827,089  

Shares redeemed

    (977,885     (17,519,366     (1,463,201     (31,781,202     (2,066,194     (47,084,772
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    (458,682   $ (8,233,070     (31,510   $ (390,271     (308,437   $ (7,475,833
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Class K

           

Shares sold

    502,333     $ 11,137,344       484,536     $ 12,692,480       1,390,844     $ 35,813,103  

Shares issued in reinvestment of distributions

    119,912       2,585,299       320,270       8,451,918       95,328       2,465,567  

Shares redeemed

    (460,864     (10,022,623     (403,961     (10,452,779     (417,600     (11,318,795
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    161,381     $ 3,700,020       400,845     $ 10,691,619       1,068,572     $ 26,959,875  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Class R

           

Shares sold

    39,025     $ 764,034       60,860     $ 1,461,492       221,456     $ 5,282,315  

Shares issued in reinvestment of distributions

    21,475       411,459       65,432       1,542,895       21,621       501,903  

Shares redeemed

    (46,877     (905,529     (121,622     (2,947,070     (253,111     (6,264,878
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    13,623     $ 269,964       4,670     $ 57,317       (10,034   $ (480,660
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    (1,654,805   $ (34,768,905     4,832,134     $ 135,227,933       5,567,330     $ 146,398,629  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

As of November 30, 2022, BlackRock Financial Management, Inc., an affiliate of the Fund, owned 8,471 Class K Shares of the Fund.

 

12.

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.

 

 

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Statement Regarding Liquidity Risk Management Program

 

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

The Board of Directors (the “Board”) of the Fund, met on November 8-9, 2022 (the “Meeting”) to review the Program. The Board previously appointed BlackRock Advisors, LLC or BlackRock Fund Advisors (“BlackRock”), each an investment adviser to certain BlackRock funds, as the program administrator for the Fund’s Program, as applicable. BlackRock also previously delegated oversight of the Program to the 40 Act Liquidity Risk Management Committee (the “Committee”). At the Meeting, the Committee, on behalf of BlackRock, provided the Board with a report that addressed the operation of the Program and assessed its adequacy and effectiveness of implementation, including the management of the Fund’s Highly Liquid Investment Minimum (“HLIM”) where applicable, and any material changes to the Program (the “Report”). The Report covered the period from October 1, 2021 through September 30, 2022 (the “Program Reporting Period”).

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

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

 

  a)

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

 

  b)

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

 

  c)

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

There were no material changes to the Program during the Program Reporting Period other than the enhancement of certain model components in the Program’s classification methodology. The Report provided to the Board stated that the Committee concluded that based on the operation of the functions, as described in the Report, the Program is operating as intended and is effective in implementing the requirements of the Liquidity Rule.

 

 

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

  45


Additional Information

 

General Information

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

Householding

The Fund will mail only one copy of shareholder documents, including prospectuses, annual and semi-annual reports, Rule 30e-3 notices and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please call the Fund at (800) 441-7762.

Availability of Quarterly Schedule of Investments

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

Availability of Proxy Voting Policies, Procedures and Voting Records

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

BlackRock’s Mutual Fund Family

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

Shareholder Privileges

Account Information

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

Automatic Investment Plans

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

Systematic Withdrawal Plans

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

Retirement Plans

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

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.

 

 

46  

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Additional Information   (continued)

 

BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.

We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.

Fund and Service Providers

Investment Adviser and Administrator

BlackRock Advisors, LLC

Wilmington, DE 19809

Accounting Agent and Transfer Agent

BNY Mellon Investment Servicing (US) Inc.

Wilmington, DE 19809

Custodian

The Bank of New York Mellon

New York, NY 10286

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

Boston, MA 02116

Distributor

BlackRock Investments, LLC

New York, NY 10022

Legal Counsel

Sidley Austin LLP

New York, NY 10019

Address of the Corporation

100 Bellevue Parkway

Wilmington, DE 19809

 

 

 

 

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

  47


Glossary of Terms Used in this Report

 

Currency Abbreviation

EUR    Euro
GBP    British Pound
JPY    Japanese Yen
USD    United States Dollar

Portfolio Abbreviation

ADR    American Depositary Receipt
DAC    Designated Activity Co.
ETF    Exchange-Traded Fund
LP    Limited Partnership
MTN    Medium-Term Note
NVS    Non-Voting Shares
OTC    Over-the-Counter
REIT    Real Estate Investment Trust
S&P    Standard & Poor’s
SOFR    Secured Overnight Financing Rate

 

 

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Want to know more?

blackrock.com | 800-441-7762

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

BC-11/22-SAR

 

 

LOGO

  

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(b) Not Applicable

 

Item 2 –

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

 

Item 3 –

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

 

Item 4 –

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

 

Item 5 –

Audit Committee of Listed Registrant – Not Applicable

 

Item 6 –

Investments

(a) The registrants’ Schedules of Investments are included as part of the Report to Stockholders filed under Item 1(a) of this Form.

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

 

Item 7 –

Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not Applicable

 

Item 8 –

Portfolio Managers of Closed-End Management Investment Companies – Not Applicable

 

Item 9 –

Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable

 

Item 10 –

Submission of Matters to a Vote of Security Holders – There have been no material changes to these procedures.

 

Item 11 –

Controls and Procedures

(a) The 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 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 –

Disclosure of Securities Lending Activities for Closed-End Management Investment

Companies – Not Applicable

 

Item 13 –

Exhibits attached hereto

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

(a)(2) Section 302 Certifications are attached

(a)(3) Any written solicitation to purchase securities under Rule 23c-1 – Not Applicable

 

2


(a)(4) Change in Registrant’s independent public accountant – Not Applicable

(b) Section 906 Certifications are attached

 

 

3


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 Sustainable Balanced Fund, Inc.

 

  By:     

/s/ John M. Perlowski                            

       John M. Perlowski
       Chief Executive Officer (principal executive officer) of
       BlackRock Sustainable Balanced Fund, Inc.

Date: January 20, 2023

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of 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 Sustainable Balanced Fund, Inc.

Date: January 20, 2023

 

  By:     

/s/ Trent Walker                            

       Trent Walker
       Chief Financial Officer (principal financial officer) of
       BlackRock Sustainable Balanced Fund, Inc.

Date: January 20, 2023

 

4

ATTACHMENTS / EXHIBITS

CERTIFICATION PURSUANT TO SECTION 302

CERTIFICATION PURSUANT TO SECTION 906



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