iShares Pumps Up BlackRock Q3 Net

By
October 18, 2012
Share:

BlackRock’s iShares was on center stage this week with strong flows that helped its parent’s bottom line.

iShares helped pump up its corporate parent BlackRock Inc.’s third-quarter bottom line by 8 percent, as the world’s biggest  exchange-traded fund sponsor raked in more than a third of the nearly $60 billion in total U.S. ETF inflows in the quarter ended Sept. 30.

In its earnings report released Wednesday, BlackRock boasted that iShares had $25.2 billion in “net flows” in the third quarter—the highest since 2009—and leads the U.S. ETF industry in year-to-date inflows. BlackRock’s iShares ended the quarter with total assets under management of almost $526 billion, according to data compiled by IndexUniverse.

BlackRock, the biggest asset-management company in the world, posted third-quarter net income of $642 million, or $3.65 a diluted share, compared with $595 million, or $3.23 a share in the same year earlier quarter. Revenue jumped 4 percent to $2.32 billion compared with almost $2.23 billion in the 2011 third quarter.

“We achieved a milestone in our iShares business, with the highest net new business production since our merger with Barclays Global Investors in December 2009,” BlackRock Chairman and Chief Executive Officer Laurence Fink said in the press release.

Apart from its earnings on Wednesday, iShares’ fortunes were front and center this week, as BlackRock cut fees on six of its existing funds ETFs and launched four new ETFs—all with the purpose of offering long-term, buy-and-hold, investors broad pure beta funds that are among the cheapest in the entire ETF industry.

The launch of this “iShares Core” series also coincided with the beginning of the integration of BlackRock’s and iShares’ sales forces. Both initiatives aimed at expanding the iShares franchise which, in recent years, has been losing market share to low-cost providers such as Vanguard Group.

SSgA Helps State Street Too

Like iShares, State Street Global Advisors, the fund sponsor behind the SPDR family of ETFs, also helped its parent’s bottom line in third quarter.

A total of $78 billion of net new assets were added to SSgA’s total assets under management. SSgA, which also manages money for institutional clients, is the No. 2 U.S. ETF company by assets. It ended the quarter with ETF assets of $327 billion, according to data compiled by IndexUniverse.

State Street Corp (NYSE: STT) posted third quarter net income on this week of $654 million, or $1.36 a share compared with $543 million, or $1.10 share in the same year-earlier quarter. The third quarter of 2012 included a net after-tax benefit of $0.35 per share, the majority of which pertains to claims associated with the 2008 Lehman Brothers bankruptcy.

Revenue dipped 3 percent to $2.36 billion from $2.43 billion, the company said.

 

ETF.COM CHANNELS

Want to learn more about smart-beta ETFs? Check out our smart-beta guide, essentials library and ETF screener!

ETF DAILY DATA

'VTI,' Vanguard's U.S. total market fund, led inflows on Wednesday, July 1, as total U.S.-listed ETF assets climbed to $2.123 trillion.

A slew of iShares funds paced the firm's issuer-leading inflows on Wednesday, July 1, as total U.S.-listed ETF assets rose to $2.123 trillion.

ETF.COM ANALYST BLOGS

By Drew Voros

Why is putting a client’s interest first not the industry standard?

By Matt Hougan

Contrarian plays, bad investing and authenticity in social media dominated the day.

By Dave Nadig

While they bring added risk, they can bring added returns.

By Olly Ludwig

The ETF world is a hotbed of interesting new ideas, as this week’s launches make clear.

ETF INDUSTRY PERSPECTIVE

By Invesco PowerShares

Smart beta appears to be poised for further growth.

By Dorsey Wright & Associates LLC

So many sectors, how do you choose? A quick guide from Dorsey Wright.

By Nasdaq Global Indexes

Bond exposure or bond performance? Only defined maturity indexes provide the latter.