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BlackRock Manages Strong Growth in 1Q17 on New Flows, ETFs

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BlackRock Manages Strong Growth in 1Q17 on New Flows, ETFs PART 2 OF 8

iShares Rakes in Highest Assets for BlackRock in 1Q17

iShares performance

BlackRock’s (BLK) iShares saw continued strength in 1Q17, with the division witnessing strong flows toward asset classes inside and outside of the United States.

The division had AUM (assets under management) of ~$1.4 trillion as of March 31, 2017.

iShares Rakes in Highest Assets for BlackRock in 1Q17

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The company’s iShares AUM accounted for 26% of its total AUM in 1Q17. Its long-term inflows for the quarter stood at $64 billion, driven by inflows of $44.6 billion in equities toward iShares Core, precision exposure, and financial instrument ETFs. These inflows were partially offset by fixed-income inflows of $20.3 billion toward investment-grade corporates, emerging market debt, and Treasury bond funds.

BlackRock posted net income of $3.2 billion in 2016. Its peers posted the following numbers:
  • Bank of New York Mellon (BK): $2.7 billion
  • State Street (STT): $2.0 billion
  • JPMorgan Chase (JPM): $21.8 billion

Together, these companies make up 8.7% of the Vanguard Financials ETF (VFH).

Equity, fixed income rises

The total 1Q17 AUM for iShares rose $125 billion over the previous quarter, mainly due to long-term inflows, the positive impact of foreign exchange, and rises in equities, fixed income, and alternatives holdings. Equities holdings rose $54.8 billion, fixed income holdings rose $2 billion, and alternatives holdings rose $1.3 billion.

BlackRock’s iShares offerings’ total base fees rose $40 million in 1Q17 to $925 million, compared to $885 million in the previous quarter. The base fees of iShares made up 37% of the company’s total fees in 1Q17, higher than in 4Q16. The rise in fees was mainly due to new assets and a rise in the market value of equity holdings.

BlackRock’s base fees for its equities rose $98 million to $721 million in 1Q17, compared to $623 million in 1Q16. Its fixed-income base fees rose $33 million to $185 million during the same period.

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