18 Jan

BlackRock’s Retail Is Adding Assets at a Fast Pace toward Debt

WRITTEN BY Robert Karr

Retail clientele

BlackRock’s (BLK) Retail division has deployed funds in the markets over the past few quarters. The company’s product offerings and macro fundamentals have helped it garner fresh investments in the last few quarters. The division attracted $11.0 billion in new flows in 4Q17, compared to outflows of $2.0 billion in 4Q16.

On December 31, 2017, BlackRock managed $628.0 billion (or 10%) of its total assets under management for its Retail division. For the last four quarters, the division has attracted positive flows in the range of $5.0 billion–$11.0 billion.

BlackRock’s Retail Is Adding Assets at a Fast Pace toward Debt

Fixed income adds funds

In 4Q17, BlackRock’s Retail division added long-term inflows of $11.4 billion, with international accounting for $4.0 billion and domestic forming $7.4 billion. Fixed income offerings attracted $8.0 billion invested in active platforms including unconstrained strategies, municipal offerings, and short durations.

Equities added $1.1 billion in international equities. The remaining $2.0 billion was brought in for the multi-asset income fund family. Other alternatives like Goldman Sachs (GS), J.P. Morgan (JPM), and T. Rowe Price (TROW) are also targeting retail assets.

Relatively higher fees

Asset managers (VFH) garner higher fees on retail offerings compared to ETFs, index funds, or institutional offerings. BlackRock grew its retail assets by $20.0 billion in 4Q17 compared to 3Q17. This trend was helped by inflows, $1.0 billion appreciation in its debt portfolio, $5.7 billion in equities, $1.0 billion in the multi-asset category, and a $1.4 billion benefit from a weaker dollar.

The division’s managed total base fees rose $858.0 million in 3Q17 compared with $843.0 million in the previous quarter. The fees formed 29% of the company’s total base fees. Retail clients continued their shift toward debt in 4Q17, which was in line with institutional investors.

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