BlackRock has reported a record USD202 billion of full year total net inflows, which the company says reflects the strength of its diversified business model.
During the fourth quarter of 2016, the company saw USD98 billion of total net inflows, including USD18 billion in cash management, led by momentum in iShares and Institutional businesses.
Demand for BlackRock technology solutions drove 13 per cent full year revenue growth in Aladdin, while the company says that an expansion in operating margin from prior year reflects continued expense discipline.
During 2016, BlackRock returned USD2.7 billion to shareholders, while the Board of Directors has approves a 9 per cent increase in the company’s quarterly cash dividend to USD2.50 per share and authorised the repurchase of an additional six million shares under its existing share repurchase program.
“In a year of dramatic change and uncertainty around the world, clients continued to put their trust in BlackRock, allowing us to deliver the strongest annual net inflows in our firm's history," says Laurence D Fink, chairman and CEO of BlackRock. "2016 total net inflows of USD202 billion were positive across product types and included USD181 billion of long-term net inflows. Our full year results reflect our continued commitment to optimise the growth of our diverse investment, technology and risk management capabilities in the most efficient way possible.
"While domestic equities rallied following the US election, the combination of a strengthening dollar, underperforming international equities and negative fixed income markets produced challenging outcomes for global investors. Investors are rethinking their approach to active management, asset allocation and portfolio construction, and we're seeing more clients use active and index strategies together to deliver returns. We have purposefully invested in our platform to provide clients with a full spectrum of offerings including cash, market cap-weighted indexes, smart beta and factor-based investment strategies, and high-conviction active products, whether fundamental, quantitative or illiquid.
"Increasingly diversified groups of institutional and retail clients are using ETFs in their portfolios. This broadening of the ETF ecosystem is creating a deeper secondary market for ETF trading – enhancing liquidity for all investors. iShares generated a record USD140 billion of net inflows for the year, including USD60 billion into iShares fixed income ETFs, capturing the No1 share of flows globally, in the US and in Europe, and in equity and fixed income.
"Institutions looked to BlackRock to help them close funding gaps and meet future liability objectives, and we saw record institutional net inflows of USD51 billion, driven by fixed income and multi-asset solutions.
"Technology is increasingly important in the evolving regulatory and investment landscape, and clients increasingly value BlackRock's technology solutions to help them understand and manage risk, and build portfolios. Aladdin revenue increased 13 per cent in 2016, and is well positioned for continued momentum with a broader set of clients than ever before. Additionally, we launched Aladdin Risk for Wealth Management and continued to deepen our relationships with our distribution partners through FutureAdvisor's digital advice capabilities.
"BlackRock has always focused on repositioning its investment platform and technology capabilities in anticipation of change, and BlackRock employees embrace their responsibility to help clients navigate this evolving, complex landscape. As we head into 2017, we remain committed to investing for the future and developing our talent in order to fulfil our responsibility to both clients and shareholders."
