Supportive equity markets and net inflows into many products have helped assets under management (AuM) at some of the world's largest fund companies rise to new heights.
State Street Global Advisors saw its AuM increase nearly 10% in the year ending March 31, and now looks after $2.18 trillion (€1.7 trillion). Though the rise was largely the result of stock market gains, the firm said it took in a net inflow of $5 billion in the first quarter.
BlackRock, the world's largest asset manager, saw its AuM rise 7% in the same period to $3.94 trillion (€3 trillion). Again, market movements accounted for much of the gain, though the firm said it took in net inflows of $39.4 billion into its long-term products in the first quarter.
BlackRock's gain was partly offset by net outflows from fixed income and alternatives, currency and commodities products. The firm also had net outflows from customers in the Asia Pacific region in the first quarter.
A number of other managers have yet to release earnings data for the first quarter. At the end of 2012, Allianz Group had €1.8 trillion under management, Vanguard Group had approximately $2 trillion (€1.5 trillion) and Fidelity Investments had $1.7 trillion (€1.3 trillion).
State Street's earnings, which include the company's custody business as well as asset management, fell slightly in the first quarter to $0.98 per common share, down from $1 in the preceding quarter. This was an improvement from the first quarter of 2012, when earnings per common share were $0.85.
“The strength in the equity markets, combined with higher volumes and increased volatility in foreign-exchange trading, supported our fee revenue,” says Joseph L Hooley, State Street's chairman and chief executive.
BlackRock's earnings showed more volatility. Diluted earnings per share were $3.62 in the first quarter of this year, 8% less than in the preceding three months, but 15% more than in the first quarter of 2012.
Larry Fink, chairman and chief executive of BlackRock, comments that low interest rates were affecting investor behaviour.
“Long-dated fixed income instruments traditionally used to fund retirement obligations carry asymmetric risk for investors looking to match retirement assets and liabilities,” he says. “This is having a significant impact on where we're seeing asset flows as investors seek other sources of yield, including from equities, where we witnessed a record $34 billion in net new flows.”
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