iShares makes up for BlackRock’s index outflows

ETFsBlackRock’s exchange-traded fund (ETF) business iShares was the strongest performer in the third quarter of the year as the world’s largest asset manager saw net inflows of $10.612 billion into long-term funds.

Institutional investors drew a net $24.758 billion out from BlackRock, the overwhelming part of that from index-tracking products which saw $23.554 billion of net redemptions. However, countering this was the popularity of iShares’ ETFs, which gained $33.673 billion of net inflows.

Retail business was also positive with just over $1.6 billion of subscriptions.

Larry Fink, BlackRock chairman and chief executive, said institutions redeemed $30 billion from non-ETF equity products that track indices as a result of de-risking associated with divergent monetary policy and geographical uncertainty.

He also highlighted that the firm – whose assets under management (AUM) were 8% higher at $6.4 trillion compared to the same time last year – had generated long-term net inflows from multi-asset and illiquid alternative strategies, as well as from iShares, during the third quarter.

$28 billion of AUM was from strategic transactions.

Net flows for the firm overall, including outflows from cash management, were negative at -$3.105 billion.

Revenues grew 2% year-over-year, driven by 4% growth in base fees and 18% growth in revenues from technology services. They were partially offset by lower performance fees.

Fink said BlackRock’s third quarter results “highlight the resilience of our differentiated platform and our ability to generate organic growth, even in the face of significant industry headwinds”.

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