BlackRock ETFs Pulled in $83B in 2Q as Markets Rose

BlackRock Inc., whose iShares unit is the world's biggest ETF issuer, reported that investors poured $83 billion into the firm's exchange-traded funds in the second quarter, a 24% jump from the first quarter, propelled by rising equity markets.

The company, also the world's biggest asset manager, said total assets climbed to $10.7 trillion, as investors turned to risk-on products toward quarter's end. Exchange-traded funds through the year's first half have pulled in $150 billion, the New York-based firm said in a press release.

The S&P 500 Index gained 4% during the second quarter, and BlackRock’s equity ETF assets increased to $2.8 trillion from $2.7 trillion at the end of March, while fixed-income funds rose 3% from the first quarter to $931 billion. Market drops cut $7 billion from the fixed income funds, offset by nearly $45 billion flowing in.

“The second quarter didn’t start very strong for the markets, but it ended on a high note and that brought investors who might have been on the sidelines back into the risk-on trade,” said Catherine Seifert, an analyst covering BlackRock at CFRA.

SPY vs. IVV

BlackRock runs 443 ETFs, ahead of the 86 managed by No. 2 Vanguard Group.  BlackRock's biggest, the $508.6 billion iShares Core S&P 500 ETF (IVV), pulled in $15.2 billion during the quarter. That fund is the world's second-biggest ETF behind the SPDR S&P 500 ETF Trust (SPY), which had nearly identical outflows—$15.2 billion—during the period.

Globally, the New York-based asset manager’s ETF assets exceeded $3.86 trillion at the end of June, which is up from $3.75 trillion at the end of March. Rising markets were responsible for approximately $32 billion worth of the asset growth.

BlackRock’s alternative asset ETFs increased during the quarter to more than $85 billion, up from $79 billion thanks to a combination of $2 billion worth of market performance and $4 billion worth of net inflows.

BlackRock’s earned an adjusted $10.86, topping the $9.83 Bloomberg estimate. Revenue rose 8% to $4.8 billion, which was at the low end of Seifert’s expectations, but she remains bullish on the stock.

She maintains a “buy” rating on the stock with a 12-month price target of $935 per share, which is about 12% above the current price of $832. BlackRock stock, which is up less than 3% this year, moved up slightly with the broad equity markets in midday trading Monday.