Blackrock has set a record of $10.6 trillion assets under management, mainly due to high ETF flows.
BlackRock stock trended up on Monday after the asset-management giant reported strong second quarter earnings. The stock was boosted by ETF inflows, a rising market and strong earnings.
Asset manager reported $10.65 trillion assets under management by the end of Q2 – a 13% rise from the same quarter last year and a record.
Analysts’ estimates of $9.95 a share. BlackRock’s operating profit margin increased to 37.5% this quarter, up from 36.2% last year.
BlackRock generated $4.8 Billion in revenue for the quarter, an 8% increase year-over-year. Net inflows of $81.6 billion into its funds were up nearly 2% compared to the same quarter last year. The quarter saw a 6.2% increase in expenses.
2. ETFs drive growth
2. ETFs drive growth
BlackRock, through its iShares fund, is the largest provider of exchange-traded funds (ETFs). It had a record-breaking first half, with net inflows of $150 billion into its ETFs.
In the second quarter, iShares ETFs brought in $83 billion, but retail mutual funds had only $6 billion. In addition, its money market and cash products saw inflows of $30.1 billion, but its institutional accounts brought down the total with $37 billion net outflows.
In the earnings release, Laurence Fink said, “Organic Growth was driven by Private Markets, Retail Active Fixed Income, and Surging Flows into our ETFs. They had their best year start on record.”
BlackRock iShares Bitcoin Trust, NASDAQ: IBIT, has been its cash cow. It was the first ETF to reach $10 Billion in assets under management. It reached this plateau in March, after launching in January.
Grayscale Bitcoin Trust (NASDAQ GBTC) is now the largest Bitcoin ETF, with assets of $18 billion, which surpasses the Grayscale Bitcoin Trust.
3. Expanding into the private market
3. Expanding into the private market
BlackRock is putting a lot of effort into developing products, such as ETFs, that will facilitate private market investments, which involve investing in privately-held companies instead of publicly traded stocks.
Preqin, a private equity data firm, was acquired by Aladdin earlier this month to enhance its Aladdin platform. This platform is used by money managers and institutional investors to manage their portfolios. Fink believes enhanced data and transparency will result in advanced analytics and benchmarks, which will transform private markets like they did for public markets.
Fink stated earlier this month that “just as indexes are the language of the public markets, we imagine we can bring indexing principles, including iShares to the private market.” Fink said earlier this month that indexes, data and iShares will be key drivers in the future of democratizing all alternatives. This acquisition is the key.
BlackRock will also close on its acquisition by Global Infrastructure Partners during the third quarter. GIP is the leading infrastructure fund manager with assets under management of $100 billion. Prequin and the $1 trillion infrastructure market are a great match.
Should I buy BlackRock stock?
Should I buy BlackRock stock?
BlackRock is a very cyclical stock, and is currently in a great phase, aided by the 18-month bull market. The stock is only up 2% YTD, and 14% in the last 12 months.
Investors will benefit from this because the P/E ratio is 20 and the valuation is reasonable. There is also some room for growth, especially with the rate cuts that are likely to occur in the next few weeks.
It looks like an excellent buy at the moment.
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