BlackRock’s iShares Keeps Dominating New Flows in the Industry
BlackRock’s (BLK) iShares continue to garner the highest share of flows among peers deployed in ETFs and index funds. The division attracted a record $74 billion in 2Q17, taking total assets under management to $1.53 trillion and forming 27% of total assets under management. iShares offerings in equity, debt, emerging market debt, blended offerings, and index funds have seen consistent inflows over the past few years.
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BlackRock attracted $51.8 billion toward its equity ETFs, helped by inflows in both US and international offerings. It managed another $21.0 billion toward debt ETFs, driven by emerging market debt, investment-grade corporate debt, and treasury bond funds.
Other major asset managers (VFH)—including State Street (STT), Vanguard, Charles Schwab (SCHW), and JPMorgan Chase (JPM)—have also seen rising asset allocation toward exchange-traded funds and index funds.
Generating stable revenues
BlackRock’s iShares garnered total base fees of $998 million, up by $70 million on a sequential basis and $148 million on a year-over-year basis and forming 37% of the company’s total fees. Growth was strong in equity ETFs due to appreciation as well as fund flows toward these offerings.
In 2Q17, managed assets for iShares rose by $115 billion over 1Q17 on long-term inflows, foreign exchange, and rises in a valuation of holdings. Equity holdings appreciated by $29.0 billion while fixed-income holdings grew by $2.1 billion. Alternative holdings fell $0.8 billion. The division managed a positive foreign exchange impact of $10.7 billion, reflecting a weaker dollar over the past few months.
The Trump administration’s policies have been quite clear since his administration began roll-outs of expected policy changes. However, the implementation has been very slow, which has triggered more questions from investors, resulting in slower buying of equities valued at high multiples.