BlackRock sees record interest in equity funds

Michael Bow
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RECORD demand for equity investments helped BlackRock, the biggest money manager on earth, boost profits by ten per cent and put assets under management within touching distance of the $4 trillion (£2.6 trillion) barrier last quarter.

The New York-based group said a record $33.7bn of cash flowed into equities in the three months ending March, despite some $2.6bn being pulled by investors from bond funds

Total assets under management were up seven per cent from last year to $3.94bn.

Quarterly profits rose to $632m on a nine per cent rise in revenue.

Most of the flows into equities came from the group’s popular iShares exchange traded fund (ETF) products, with $25.6bn being shoveled into them last quarter.

Despite dismissing the so-called great rotation into equities, the base fees from managing equity iShares alone boosted fee revenue $56m, while ETF bond and active bond funds fees fell $10m.

The movements took the total value of base fees to $2.13bn, up two per cent up from last quarter.

Chairman and chief executive of BlackRock Larry Fink said: “iShares has increasingly become a leading indicator of investor sentiment and, during the quarter, investors turned to iShares as a way to quickly and efficiently increase their exposure to equity markets.”

Globally, investments into developed market equity ETFs surged past traditional mutual funds in the first quarter of 2013. Exchange traded products attracted $60bn of flows, while mutuals lured about $56bn.