BlackRock, the firm behind the iShares exchange-traded funds (ETFs) business, has reported second quarter 2013 net income of $729 million, up 32% from a year ago.
Laurence D. Fink, Chairman and CEO of BlackRock.
Revenue increased 11% from the second quarter 2012 to $2,482 million, reflecting growth in markets, long-dated net new business and higher performance fees.
Across the entire firm assets under management finished the quarter at $3.857 trillion, up 8% year over year.
The iShares business saw moderate net outflows of $963 million, with assets under management ending the quarter at $774.5 billion.
This part of the business generated $723 million in base fees over the quarter, representing 35% of the firm’s total base fee revenue, the largest share of any business division.
iShares’ outflows were driven by clients stepping back from emerging market equities, long-duration fixed income and commodities, including outflows of $7.2 billion, $2.0 billion and $2.1 billion from the firm’s flagship emerging markets equity, fixed income and commodities ETFs, respectively.
However, much of the outflows in these products were offset by inflows into other iShares ETFs, including into its low-cost ‘Core’ series and its minimum volatility suite. These product suites enjoyed positive flows of $3.6 billion and $2.0 billion respectively. Also of note were inflows of $2.2 billion into the European iShares business.
Commenting on the results, Laurence D. Fink, Chairman and CEO of BlackRock, said: “While markets were volatile this quarter, not all investor behaviour was uniform. Our largest institutional investors remain committed to their long-term investment strategies, while trading-oriented clients once again turned to iShares as a highly effective tool to quickly and efficiently adjust their market exposures.”
He added: “We see a number of exciting growth opportunities across the firm and are continuing our commitment to finding innovative solutions to serve our clients’ needs in changing market conditions. This commitment to innovation is illustrated by the launch of our new iSharesBonds series in April combining the advantages of traditional bonds and ETFs and providing our clients a tool to simplify their fixed income portfolio while managing duration risk.”