BlackRock’s Assets Under Management Reach $ 9.5 Billion

BlackRock’s assets under management hit a record $ 9.5 billion in the second quarter, driven by robust financial markets that boosted inflows into actively managed and exchange traded fund products.

The world’s largest fund manager announced a 32% year-on-year increase in revenue in the three months to June to $ 4.8 billion, beating a forecast of $ 4.6 billion, boosted by a strong organic growth and higher performance fees. The group’s operating margin increased to 40.1 percent from 38.5 percent a year ago.

“The strong annualized organic base expense growth of 10% in the second quarter is driven by our best performing active platform and industry leading iShares ETF franchise,” said Managing Director Larry Fink.

Net income climbed 14% to $ 1.38 billion and the group reported adjusted earnings per share of $ 10.03. Analysts polled by Bloomberg were expecting EPS of $ 9.48.

Net inflows stood at $ 81 billion in the three-month period, ending a streak of more than $ 100 billion in the previous four quarters. Long-term investment flow, a measure that excludes cash management, was $ 60 billion and was below analysts’ expectations of $ 94 billion, according to Bloomberg.

“We attribute most of the decline from the previous quarter to the loss of a $ 58 billion stock index mandate from a client of a US pension fund,” said Kyle Sanders, analyst at Edward Jones. “While the loss of retired clients weighed on the overall flow number, the underlying trends were strong. “

BlackRock shares hit a new all-time high this week at $ 920.31 and analysts have increased their EPS estimates in recent days. This change reflects both the stock markets which have reached new highs and the net inflows into global ETFs so far this year, on the verge of surpassing those of the whole of 2020. At the end of June , global ETF flows totaled $ 659 billion, compared to $ 767 billion overall. last year, according to consultancy firm ETFGI.

Analysts are optimistic about BlackRock’s long-term growth prospects as it holds a substantial lead over its competitors in ETFs and technology services through its Aladdin platform, as well as its products focused on environmental investing, social and governance.

BlackRock’s iShares franchise assets exceeded $ 3 billion for the first time in May, and net inflows for the quarter reached $ 75 billion, up from $ 51 billion a year ago. The asset manager told investors in June that he expects the current global $ 9 billion ETF market to reach $ 15 billion by 2025.

S&P Asset Management and Custody Bank Index bar chart showing BlackRock stock's performance recently outperformed most of its rivals

Another important area of ​​long-term growth targeted by BlackRock is China, as the country opens doors for foreign fund managers.

During the second quarter, BlackRock obtained approval to operate as an asset manager, in a joint venture with China Construction Bank and Singapore state fund Temasek, while last month it became the first foreign asset manager to gain approval to start a wholly owned mutual fund business. in China.

“BlackRock has invested in the region and has spent time building relationships that will help it become a major asset manager in China,” said Craig Siegenthaler, analyst at Credit Suisse.

BlackRock shares have gained 26% so far this year, helping its stock outperform the S&P Asset Management index and most of its rivals since early April, extending a long period of gains.

BlackRock shares were down 1.5% to $ 895 in pre-market trading.

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