Blackrock set a record with $10.6 trillion in assets under management within the second quarter, led by high ETF flows.
BlackRock (NYSE:BLK) stock was trending up Monday after the asset management giant posted record-breaking second-quarter earnings, buoyed by robust ETF inflows and a rising stock market.
The asset manager reported $10.65 trillion in assets under management at the top of Q2 — a 13% increase from the identical quarter a 12 months ago and a record for the firm.
Listed below are three major takeaways from BlackRock’s Q2 earnings.
1. Profits jump 10%
The asset manager saw net income rise 10% within the quarter to $1.5 billion, or $9.99 per share. That topped analysts’ estimates of $9.95 per share. Also, BlackRock’s operating margin rose to 37.5%, from 36.2% a 12 months ago this quarter.
BlackRock generated $4.8 billion in revenue within the quarter, up 8% year-over-year. It had $81.6 billion in net inflows into its funds, up nearly 2% from the identical quarter a 12 months ago. Expenses rose 6.2% within the quarter.
2. ETFs drive growth
BlackRock, the biggest provider of ETFs through its iShares funds, had a record first half with $150 billion in net inflows into is ETFs.
Within the second quarter alone, its iShares ETFs generated $83 billion in net inflows, while its retail mutual funds only had $6 billion in net inflows. Further, its money market funds and money products saw $30.1 billion in inflows, but Its institutional accounts brought the entire down with $37 billion in net outflows.
“Organic growth was driven by private markets, retail energetic fixed income, and surging flows into our ETFs, which had their best begin to a 12 months on record,” Laurence Fink, chairman and CEO, said within the earnings release.
Its money cow has been the BlackRock iShares Bitcoin Trust (NASDAQ: IBIT), which became the fastest ETF to succeed in $10 billion in assets under management. It reached that plateau in March after launching in January.
It’s now the biggest Bitcoin ETF with $18 billion in assets, surpassing the Grayscale Bitcoin Trust (NASDAQ:GBTC), which has roughly $15.6 billion in managed assets.
3. Branching out into private markets
BlackRock is making a giant push to develop products, including ETFs, to facilitate private market investing, which involves investing in privately held corporations, versus publicly traded stocks.
Earlier this month, it acquired a personal equity data company called Preqin to bolster it Aladdin platform, which money managers and institutional investors use to administer their portfolios. Fink believes that enhanced data and transparency will result in advanced analytics and benchmarks that may ultimately transform private markets, like they’ve for public markets.
“Just as indexes have change into the language of public markets, we envision that we will bring the principles of indexing, even iShares, to the private markets,” Fink said earlier this month. “We consider that indexes and data can be essential future drivers of the democratization of all alternatives, and this acquisition is the unlock.”
Also, BlackRock is closing on its acquisition of Global Infrastructure Partners within the third quarter. GIP is a number one infrastructure fund manager, with $100 billion in assets under management in infrastructure investments. The $1 trillion infrastructure market is taken into account one in all the fastest-growing segments of personal markets, making it an excellent fit with Prequin.
Is BlackRock stock a buy?
BlackRock stock may be very cyclical, and it’s in a fantastic cycle at once, helped by the 18-month and counting bull market. That said, shares are only up about 2% YTD and 14% over the past 12 months, so it has not been flying as high as one might expect.
But that is sweet for investors since the valuation is comparatively good with a P/E ratio of 20 and it must have some room to run, particularly with rates cuts more likely to occur in the following few months.
It looks like a solid buy at once.