Investors jumping into bonds, says BlackRock boss
BlackRock rebounded from a rocky end of last year, as customers jumped into its fixed-income products and showed interest in illiquid alternatives.
The world's largest asset manager saw $65bn (€57bn) in net inflows in the first quarter, the strongest total since 2017.
The results helped lift the New York-based firm's assets under management above $6trn again after a drop amid market turmoil at the end of 2018. BlackRock saw clients put money to work, moving from cash to fixed income, CEO Larry Fink said in an interview on CNBC after the earnings report. "We're seeing huge excitement in fixed income," Mr Fink said.
BlackRock's fixed income products took in $80bn in the first quarter, driving the company's $59bn in long-term net flows. Investors have shown renewed interest in bonds since Federal Reserve officials signalled this year that an increase in rates is on hold.
The pause came after many traders were instead positioning for a stretch of hikes.
The strength in BlackRock's fixed income business and $6.8bn in alternatives flows helped mute the impact of investors pulling $26bn out of its equity products.
Mr Fink said in the interview that investors haven't rushed back into equities even as the stock market bounced back this year. "There are huge pools of money sitting on the sidelines," he said on an earnings call.
BlackRock's iShares division is the largest global issuer of exchange-traded funds and a key piece of its business.
The asset manager often points to fixed-income ETFs as a source of future growth for the industry. Its fixed-income exchange-traded products brought in $32bn in the first quarter, offsetting $1.6bn in outflows from equity ETFs. iShares saw flows of $30.7bn overall in the period, down from a record $81bn.
BlackRock is recovering from 2018, when it saw its share price drop 24pc and confronted three straight quarters of institutional outflows. In the first quarter, it reversed that trend and gathered institutional inflows of $29.1bn.