BlackRock’s iShares ETF Unit Shines in Rough Third Quarter

Soaring inflows unable to offset declining assets under management.

Reviewed by: Shubham Saharan
Edited by: Shubham Saharan

While BlackRock Inc.’s third quarter earnings and revenue slid in a difficult investing environment, the firm’s iShares exchange-traded fund business provided a measure of relief.  

New York-based BlackRock’s revenues fell 15% to $4.31 billion, missing the $4.33 billion expected from analysts surveyed by Bloomberg News. Assets under management dropped 16% to $7.96 trillion in the three months ending Sept. 30.  

However, the stall in revenue growth was partially offset by net inflows from ETFs, with third quarter inflows coming in at $22 billion. While that wasn’t quite half of last year’s $58 billion, the unit collected more fees than expected. 

Inflows were primarily driven by bond ETFs, which generated $37 billion of net inflows—the second best quarter in the firm’s history—as continued market volatility from inflation, rising rates and geopolitical uncertainty forced investors into the asset class. Nearly $1.5 billion was brought in from credit and active fixed income flows.

Inflows into fixed income funds is a lasting trend, BlackRock President Rob Kapito said on an earnings call. 

“Infrastructure and sustainability stimulus in the U.S. is going to create significant opportunities for long-term investors and infrastructure to add returns to portfolios,” he said, according to a transcript. “The combination of bonds and infrastructure is going to present some great fixed income outcomes for our investors.” 

Investment advisory fees for equities from iShares came in at nearly $1.1 billion, beating analyst expectations of $992 million. Fixed income advisory fees remained relatively steady, at $273 million. 

In the last quarter, the iShares 20+ Year Treasury Bond ETF (TLT), the iShares U.S. Treasury Bond ETF (GOVT) and the iShares 7-10 Year Treasury Bond ETF (IEF) pulled in more than $16.2 billion alone, according to data. “We're going to see dramatic and large inflows into fixed income over the next year as interest rates rise,” Kapito said.  

Meanwhile, the New York-based firm, which has $700 billion in AUM across 300 ETFs, saw net outflows for equity-based active and passive products topping $10 billion.  


Contact Shubham Saharanat[email protected]

Shubham Saharan is a markets reporter at Before joining the company, she reported for Bloomberg and the Financial Times. Saharan is a graduate of Barnard College of Columbia University.