BlackRock beat second-quarter earnings estimates, as the world’s largest fund manager attracted $ 100 billion in new client funds during an excellent Wall Street rally.
Assets managed by the New York group rose 13 percent over the period to $ 7.3 trillion, reversing a large drop in early 2020 and reaching a record level at the end of last year.
Strong entries increased the fees BlackRock earns by servicing customer portfolios by 2 percent. Its net profit increased a fifth compared to the previous year to $ 1.2 billion, while revenue increased 3 percent to $ 3.6 billion.
Chief Executive Larry Fink said the sharp run in US stocks, which have returned to the levels they started the year at, was evidence that the stimulus from central banks had calmed investors. “I remain cautiously optimistic about our path to recovery,” he said Friday.
The group delivered $ 7.85 in diluted earnings per share on an adjusted basis for the quarter, 13 percent above analyst estimates.
US stocks posted the best rebound since 1998 in the second quarter, a sharp rebound from a 20% drop in the first three months of 2020. Wall Street’s largest banks also benefited from the hectic market activity in the second Quarter with JPMorgan Chase, Bank of the United States, Goldman Sachs and Morgan Stanley reported sharp increases in bond trading revenue.
Entries for the quarter were smaller than for the same period last year, but were three times the amount seen in the first quarter, when the pandemic occurred.
The company’s exchange-traded funds business, iShares, generated $ 51 billion of revenue, driven by a record flow of $ 57 billion in bond ETFs.
“There used to be a lot of fixed income investors who were concerned about ETFs because of liquidity concerns,” said Kyle Sanders, analyst at Edward Jones. “Now we see more and more institutional investors adopting the fixed income platform, which will be a good growth engine for BlackRock in the coming years.”
BlackRock was still following Vanguard, the world’s second largest fund manager, in ETF inflows in the first half of the year, according to ETFGI data.
BlackRock has taken a leading role during the pandemic after being chosen to manage the Federal Reserve’s bond purchase program, although this drew criticism given that the central bank’s scheme includes the purchase of ETFs, including the equity manager’s own funds. assets. BlackRock does not charge the Fed fees related to any ETF purchase.
The group’s financial markets advisory unit, which manages the Fed program and works with central banks around the world, generated $ 39 million in revenue, down from the same quarter last year.
Technology revenue hit a record $ 278 million, nearly a fifth above the same period last year. The large increase was fueled by BlackRock’s Aladdin platform, which links investors to markets, ensures portfolios have the right assets, and measures risk across a wide range of assets.
BlackRock stocks were near the year’s high point reached in February and just 5 percent from the record reached two years ago on New York morning trading. Shares were up 13 percent this year compared to an 8 percent decline for fund managers on the U.S. S&P 500 blue chip index.
Fink added that the New York-based asset manager’s staff would return to work in “split operations” on Monday.
