BlackRock Beats Earnings Views Even as Net ETF Inflows Fall

BlackRock, the asset-management behemoth with 424 ETFs totaling $2.3 billion in assets under management, on Friday reported third-quarter earnings that beat analysts' estimates and said it has had $98 billion in inflows to its exchange-traded funds so far this year.  

“For the first time in nearly two decades, clients are earning a real return in cash and can wait for more policy and market certainty before re-risking,” BlackRock CEO Larry Fink said in the company’s earnings statement. “This dynamic weighed on industry and BlackRock third quarter flows."

Investors have navigated a tumultuous market environment this year, marked by high inflation and the Federal Reserve’s interest rate hikes over the past year. As yields have reached peaks, many investors have ditched junk bonds and turned to long-term Treasuries. In addition, they have sought cash and money-market funds instead of stocks.  

BlackRock Tops Views 

The company posted operating earnings per share of $10.91 for the third quarter, blasting past the $8.34 per share expected by Wall Street analysts.  

Yet ETF inflows into the company dropped from the previous quarter. Flows into ETFs fell to $29 billion in the third quarter, down from $48 billion in the second quarter. 

ETF assets under management rose 20% to $3.1 trillion at the end of September from $2.6 trillion at the same point a year ago.

In the third quarter, $34 billion went into BlackRock's equity ETFs, $8 billion were added to strategic ETFs, and precision ETFs had $13 billion in outflows.  

Yet the firm suffered $13 billion in outflows from long-term investment funds, including outflows from both mutual funds and ETFs, missing Bloomberg analysts' projections of $50 billion in inflows. As the economy turned, investors poured more into cash and money-market funds instead of longer-term equity funds.