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Tech and iShares help BlackRock overcome active fund decline

Tech and iShares help BlackRock overcome active fund decline

BlackRock’s strong inflows into passives, multi-asset and illiquid alternatives, have helped it counter the outflows seen in its active equity funds.

Clients pulled $17.2 billion (£13 billion) from the company's active equity mandates in the third quarter. This was more than offset by the $33.6 billion of net inflows attracted by BlackRock’s iShares exchange-traded funds (ETF), however.

BlackRock chair and chief executive Larry Fink said: ‘BlackRock generated $11 billion of long-term net inflows in the third quarter, despite more than $30 billion of institutional non-ETF index equity outflows that resulted from de-risking associated with ongoing divergent monetary policy and geopolitical uncertainty.’

Over twelve months BlackRock's net inflows stood at $177 billion driven by growth in its  iShares, multi-asset solutions, illiquid alternatives and Aladdin businesses.

At end of the quarter, BlackRock’s assets under management (AUM) stood at $6.4 trillion, up 8% year-on-year.

Last week Scottish Widows awarded the contract to manage £30 billion in passive index strategies to BlackRock, under the terms of a wider collaboration agreement on alternative assets and tech.

An 18% gain on revenue from its technology services to $582 million from $481 million in the previous year somewhat offset lower performance fees of $151 million, down from $191 million at the end of Q3 2017.

‘We continue to build and evolve our business in order to stay ahead of clients’ needs and industry disruption, and completed several strategic transactions during the quarter to accelerate future growth,’ Fink added.

 

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