BlackRock Bolstered by Strong Bond Flows in Second Quarter

(Bloomberg) -- BlackRock Inc. benefited from blockbuster net inflows in fixed-income in the second quarter, a period in which trade tensions roiled markets and investors sought safe haven assets.

Key Insights

• Fixed-income products brought in net flows of $110.4 billion in the quarter, according to an earnings statement Friday. That compares to $26.4 billion in the same period a year earlier. The strength of the results builds on last quarter.
• “Clients are finding management of fixed income more difficult to do in-house,” Chief Executive Officer Larry Fink said on a call with analysts. “They’re looking for deeper relationships. They’re employing firms like BlackRock to manage a core part of their portfolios for fixed income.”
• Total net inflows hit a record $151 billion.
• Revenue of $3.52 billion fell 2% in part due to lower performance fees, reflecting the competitive pricing environment for asset managers. Investment advisory performance fees fell 30%.
• iShares, BlackRock’s exchange-traded fund division, had net flows of $36 billion. The unit is the world’s largest issuer of ETFs, with more than $2 trillion in assets.

Digging Deeper

• Even with strong inflows, BlackRock’s earnings fell short of analysts’ estimates. The firm reported adjusted earnings of $6.41. Analysts expected $6.50 per share.
• Assets under management rose to $6.8 trillion.

Market Reaction

• BlackRock shares rose 0.6% to $478.08 at 9:45 a.m. in New York. The stock is up about 20% this year after losing almost a quarter of its value last year.

To contact the reporter on this story: Annie Massa in New York at amassa12@bloomberg.net

To contact the editors responsible for this story: Alan Mirabella at amirabella@bloomberg.net, Vincent Bielski

©2019 Bloomberg L.P.