BlackRock's AUMs Rise on Rush to Fixed Income -- 2nd Update
July 14 2016 - 8:23AM
Dow Jones News
By Austen Hufford
BlackRock Inc. said Thursday that net inflows to fixed-income
products helped boost its assets under management in the latest
quarter, even as profit fell for the world's largest money
manager.
The New York firm reported $1.54 billion in long-term net
inflows during the June quarter. Inflows from the Americas and
Europe, Middle East and Africa regions offset outflows from
Asia-Pacific.
Inflows and positive market performance helped boost assets
under management to $4.89 trillion, up 3.6% from a year earlier and
3.2% from the March quarter.
"Political and macroeconomic uncertainty, historically low
yields and elevated market volatility are leading clients to
pause," Chief Executive Laurence Fink said. "This market
environment is creating greater opportunities for BlackRock to
engage with clients -- leading to more frequent and substantive
conversations than ever before."
BlackRock reported net outflows of equity products and net
inflows of fixed-income assets, leading to higher fee revenue in
net income and lower fee revenue in equity offerings. Performance
fees also decreased due to lower fees from alternative and equity
products.
The firm reported that fixed-income offerings helped grow its
iShares products, leading to $15.7 billion of long term net iShares
inflows. In the iShares division, which makes up about a quarter of
BlackRock's assets under management, the firm offers
exchange-traded funds, or securities that trade on an exchange and
typically track an index or other basket of assets.
BlackRock, like many of its peers, is also seeking ways to marry
its active and passive funds and tout the benefits of both types of
investing.
Retail clients pulled a net $6.29 billion from the firm in the
second quarter, a time when Mr. Fink said the firm's clients faced
"unprecedented challenges." The firm has worked in recent years to
bolster its retail assets under management.
Earlier this week The Wall Street Journal reported that
BlackRock hired longtime Credit Suisse Group AG executive Philip
Vasan as part of its push to attract more individual clients. The
idea behind the new role is to customize ways to combine actively
managed mutual funds and index-tracking products such as iShares
exchange-traded funds.
BlackRock reported a profit of $789 million, down from $819
million a year prior. Per-share earnings fell to $4.73 from $4.84.
Excluding certain items, BlackRock earned $4.78 a share, down from
$4.96 a year earlier.
Revenue fell 3.5% to $2.8 billion.
Analysts had projected $4.78 a share in adjusted earnings on
$2.8 billion in revenue, according to Thomson Reuters.
BlackRock shares, up 0.7% in the last three months, were
inactive in premarket trading.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
July 14, 2016 08:08 ET (12:08 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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