New York-based BlackRock has reported steep profit falls and robust investor inflows as the world’s largest asset manager’s second quarter results underscore the extreme conditions facing the global investment community.
Faced with what chairman and CEO Larry Fink described as “the most challenging of environments”, BlackRock suffered 30 per cent year-on-year falls in adjusted net income and earnings per share in the three months to the end of June, with overall assets under management falling to just under USD8.5 trillion – down by 11 per cent from the same time last year, and from a high of more than USD 10 trillion at the start of this year.
However, the money management giant generated impressive investor inflows during the quarter of USD90 billion – an increase of over 10 per cent from Q2 2021 – to take total net flows for the first half of this year to USD176 billion, and to a hefty USD460 billion over the past 12 months.
ETFs provided the bulk of the inflows, with more than USD50 billion of net new money flowing into BlackRock’s giant iShares operation in Q2 taking total ETF inflows for the year to date to over USD100 billion – and with over USD30 billion of new investor money coming into fixed income ETFs in the second quarter alone.
BlackRock said the resilience of client inflows through what Fink called “the worst start to the year for both stocks and bonds in half a century” underlined the strength of the group’s broad-based platform – with positive asset flows across all product types and regions.
“I cannot think of a time when BlackRock’s strategic focus has been more aligned with the needs of our clients than it is today,” said Fink. “Over the course of BlackRock’s 34-year history, we have experienced numerous periods of volatility and uncertainty, and BlackRock has always come through stronger.”
He added: “The first half of 2022 brought an investment environment that we have not seen in decades. Investors are simultaneously navigating high inflation, rising rates, and the worst start to the year for both stocks and bonds in half a century, with global equity and fixed income indexes down 20 per cent and 10 per cent, respectively.”
“It is during periods like these that we differentiate ourselves even more with clients and further deepen those relationships. I see more opportunities for BlackRock today than ever before and remain confident in our ability to deliver long-term growth for our clients, shareholders, and employees.”