When it comes to asset inflows, you can look at the glass as half-empty or half-full for BlackRock (BLK), the world’s biggest money manager.
It had net inflow of $86 billion of assets in the first quarter, including $114 billion in long-term inflow. That sounds pretty good, given the volatility in financial markets in the first quarter, especially after Russia invaded Ukraine.
That volatility pushed some investors to the sidelines. But clearly quite a few investors have still entrusted their money to the New York asset manager.
Still, the $86 billion is half the inflow of $172 billion in first-quarter 2021 and a drop of 59% from $212 billion for fourth-quarter 2021. Those were much calmer periods for financial markets.
As for the most recent quarter, the $86 billion reflects seasonal outflows from cash management, BlackRock said.
The Half-Full Glass: Broad and Long-Term Inflow
Turning to the $114 billion in long-term inflow for this year’s first quarter, it encompasses “positive flows across all product types, investment styles and regions, demonstrating the breadth of our asset-management platform,” BlackRock Chief Executive Laurence Fink said in a statement.
“Our [exchange-traded funds] delivered $56 billion of net inflows, as clients increasingly use them to efficiently allocate capital, access liquidity and manage risk.”
Almost half of BlackRock’s revenue comes from passive products, according to Morningstar analyst Greggory Warren.
Active-investment net inflows totaled $20 billion in the latest quarter, “led by LifePath target-date strategies and strong demand for alternatives,” Fink said. Target-date funds are used for retirement investing.
Positive View From Morningstar
Morningstar’s Warren assigns BlackRock a wide moat and put fair value at $960 prior to the earnings report. The stock recently traded at $715.62
“Looking out over the next five years, we believe that an expanding ETF market, improved active fund operations, the adoption of [environmental/social/governance] analytics and investing, increased multiasset and alternatives exposure, and ongoing technology efforts should all help drive growth at the firm,” he wrote on March 31.
Overall for the first quarter, BlackRock reported net income of $1.44 billion, or $9.35 a share, up from $1.2 billion, or $7.77 a share, in the year-earlier quarter. Adjusted profit climbed to $9.52 a share from $8.04 a share. The FactSet analyst consensus called for adjusted profit of $8.70 in the latest quarter.
Revenue gained 7% to $4.7 billion in the latest quarter from $4.4 billion. Analysts predicted $4.67 billion for the latest quarter.
The author of this story owns shares of BlackRock.
