ETFs played a major role in the asset management giant’s growth last quarter.
BlackRock, the parent company behind the world’s biggest ETF firm, iShares, posted a third-quarter net income increase of 14 percent year-on-year, driven mostly by the asset growth of its ETF business.
The global asset management giant, which saw its total assets under management break above $4 trillion in the past quarter, said that 80 percent of the quarter’s long-term net asset inflows of $25.3 billion went into its iShares ETF business. In the U.S. alone, iShares offers more than 250 funds boasting more than $628 billion in total assets, according to data compiled by IndexUniverse.
In all, BlackRock reported that iShares has seen more than $80 billion in inflows in the last 12 months in what amounts to an annualized growth rate of about 11 percent.
In particular, BlackRock singled out the growing success of its “Core” ETF series comprising 10 funds, which has so far gathered $9 billion year-to-date. The “Core” ETFs turned one year old this week.
"As we further penetrate the buy-and-hold segment both through the Core series and through our strategic partnership with Fidelity, we expect more stable quarterly flows patterns," BlackRock's head Larry Fink said in a conference call.
Indeed, Core has seen consistent net inflows in every quarter, including $9 billion in inflow year-to-date, and $13 billion since inception, Fink said, while in the Fidelity platform, iShares has seen an annualized growth rate of 13 percent, also led by the increasing adoption of its 10 "Core" ETFs, he said.
BlackRock reported net income of $730 million in the third quarter, or $4.21 per diluted share, from $642 million, or $3.65 a share, in the same year-earlier period. The firm’s third-quarter revenue rose 7 percent year-on-year to $2.47 billion.
“Renewed appetite for emerging markets and broad market European equity exposure in the latter part of the quarter drove equity net inflows of $21.1 billion, partially offset by fixed income net outflows of $1.5 billion,” the company said about its iShares business.
BlackRock’s revenue coming from advisory and administration fees as well as securities lending in the quarter totaled $2.2 billion, up $129 million compared with year-earlier figures.