iShares ETFs drive BlackRock’s quarterly earnings higher

Apr 16th, 2013 | By | Category: ETF and Index News

BlackRock has reported first quarter 2013 earnings of $632 million, or $3.62 a share, up 15% from a year ago. Revenue increased 9% to $2,449 million from the first quarter 2012, reflecting growth in markets, long-dated net new business and higher performance fees.

iShares ETFs drive BlackRock’s quarterly earnings higher

BlackRock’s New York headquarters. (© Americasroof)

iShares, the firm’s exchange-traded funds (ETF) division, continued to contribute strongly to earnings, generating 35% of total base fee revenue – the highest share of any business division – despite representing only 22% of assets under management (AUM).

Laurence D. Fink, Chairman and CEO of BlackRock, commented: “Our strong first quarter financial results, with revenue up 9% and EPS up 16% (adjusted) year-over-year, once again demonstrate the strength of our diversified business model. Our $39.4 billion in long-dated net new business for the quarter is indicative of positive momentum across all client channels and was driven by the strategic themes we continue to focus on: ETFs, retirement, income, multi-asset class products, and alternatives.”

Fink added: “iShares maintained its leadership position in the global ETF market, capturing $26 billion in net new business, as we continued to see adoption of ETFs across both institutional and retail investors globally.

Assets under management within iShares products ended the quarter at $802.8 billion. This included net long-term inflows of $25.6 billion, which were dominated by net long-term inflows of $26.3 billion into equity funds with early net inflows into emerging markets products reverting to broad market and large-cap equities toward the latter part of the quarter as investor sentiment toward the domestic market proved resilient.

Equity net long-term inflows were partially offset by fixed income net long-term outflows of $1.0 billion, with flows demonstrating a shift within fixed income from traditional long-term maturities toward short-term products.

For the US iShares division, net long-term inflows into equity funds totaled $20.4 billion, tilting toward large-cap equities during the latter part of the quarter. There was continued client interest in the firm’s ‘Core Series’ product suite which garnered $3.5 billion of net long-term inflows. For the international iShares division, net long-term inflows similarly were driven by equity net long-term inflows of $5.9 billion, with additional fixed income net long-term inflows of $2.2 billion.

iShares’ AUM is likely to be further boosted over time as a result of the firm’s strategic alliance with Fidelity Investments. Announced during the quarter, the new alliance will deliver Fidelity’s more than 10 million clients increased access to iShares products, tools and support, and help create a powerhouse ETF offering for the self-directed investor in the US market.

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