BlackRock Inc.’s assets under management rose to $9.4 trillion, but flows into the money manager’s long-term products widely missed analysts’ expectations.
(Bloomberg) — BlackRock Inc.’s assets under management rose to $9.4 trillion, but flows into the money manager’s long-term products widely missed analysts’ expectations.
Net flows into all of the firm’s funds totaled $80 billion for the second quarter, BlackRock said Friday in a statement. Long-term investment products, which include mutual funds and ETFs, added $57 billion, missing the $81 billion average estimate of analysts surveyed by Bloomberg.
Shares of BlackRock slid 1.3% to $729.97 at 10 a.m. in New York.
Clients added $48 billion to the firm’s ETFs, including $35 billion to fixed-income investments, and $23 billion to the company’s cash management products. Still, investors yanked $4.3 billion from equity products in total, missing analysts’ estimates of $21 billion of inflows.
“Overall, it was a bit of a mixed quarter from our viewpoint,” Citigroup Inc. analyst Christopher Allen said in a note Friday. Jefferies analyst Daniel Fannon called active fixed income “surprisingly” negative.
BlackRock President Rob Kapito stressed the opportunities that come with higher yields in fixed income.
“There is finally income to be earned in the fixed-income market,” Kapito told analysts Friday, calling the higher yields a “remarkable shift” and a “once-in-a-generation opportunity.”
Adjusted net income rose 25% from a year earlier to $1.4 billion, or $9.28 a share, beating Wall Street’s average estimate of $8.45. Revenue fell 1% to $4.5 billion.
Clients pulled $9.7 billion from active-equity products and $3.7 billion from active fixed-income investments. Investors also withdrew $2.5 billion from liquid alternatives.
‘Opportune Time’
BlackRock’s weak flows into long-term investments have recently weighed on shares, according to a Friday note from analysts Michael Brown and Aidan Hall at Keefe, Bruyette & Woods. But that weakness presents “an opportune time for investors in terms of an entry point, as we see paths to an acceleration of flows beginning later this year,” they wrote.
The S&P 500 climbed 8.3% in the second quarter, entering a technical bull market in early June. BlackRock and other investors bet on gains from companies developing artificial intelligence technologies, such as Nvidia.
Read More: S&P 500 Enters Bull Market as Tech Rally Resumes
Meanwhile, the Bloomberg US Aggregate Bond Index declined 0.8% in a volatile period as investors responded to shifting inflation expectations.
BlackRock, the world’s biggest money manager, increasingly seeks to position itself as a one-stop shop for investors offering equity, bond and money-market funds and strategies for private assets, as well providing tech, data, analytics and financial markets advice to clients.
(Updates share price and adds commentary from BlackRock’s president and analysts)
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