BlackRock, the world’s largest cashier, recorded a 6 percent increase in its fourth quarter on Friday as investors continued to allocate money to funds traded by the company despite a volatile stock market.
Throughout the year, BlackRock’s rapidly growing iShares franchise has absorbed $ 130 billion, consolidating its position as the largest supplier of E.T.F.s. Only in the fourth quarter, the company had net E.T.F. Flows of $ 60 billion.
E.T.F.s are funds traded on a stock exchange and trace a wide range of indexes. Although many investors are pulling money out of their active mutual funds, BlackRock’s E.T.F.s, especially those who invest in bonds, have always made money.
These money continued to come after the market disintegration last August, when stock of some of the company’s biggest E.T.F companies plunged, suggesting that investors did not lose confidence in these investment vehicles.
Regulators and numerous industry experts have warned that some E.T.Fs, particularly those that invest in hard-to-sell assets such as high yield bonds and lending, could pose a greater risk to the market.
Fourth Quarter Results of Wall Street
Investors are eagerly awaiting the direction of the board when higher short-term interest rates will affect banks’ bottom lines.
E.T.F. Suppliers have argued that their funds have kept well, not least in recent months, when many investors were pulling money out of high yield funds.
At the end of December, when Third Avenue Management’s investment company closed the door to investors who wanted to remove money from its low-yielding high yield, similar E.T.F.s credits were able to meet redemption requests without serious disturbances.
“Despite all the worries, the E.T.F market has proven to be the best way to gain exposure to markets,” said Laurence D. Fink, CEO of BlackRock, in an interview on Friday.
Mr. Fink stressed that during the worst turbulence period in the garbage bond market last month, investors bought and sold $ 20 billion of highly traded iShares $ 14 billion, with just $ 1 billion in redemptions effective.
“People were able to buy and sell as much as they wanted without upsetting the market,” said Mr. Fink.
At BlackRock, the total assets under management remained flat for the fourth to $ 4.6 trillion – a result as many investors, scared by the downturn in the market, pulled out their money.
The company earned $ 861 million or $ 5.11 per share, up $ 813 million or $ 4.77 per share over the previous quarter.
Throughout the year, earnings grew by 2 percent to $ 3.2 billion.
Other business areas of the company, funds offered to retail and institutional investors, grew modestly in the quarter.
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With each year, BlackRock is becoming increasingly dependent on its E.T.F. Investor investments move away from managed funds at a higher rate and less liquid. BlackRock runs $ 1.1 trillion in E.T.F.s, most of the industry.
And this year, the bond of the company E.T.F.s, which invests in a number of sectors, including corporate bonds, emerging markets and Treasury bonds, has attracted $ 50 billion in new funds.
However, Mr. Fink was able to point out that BlackRock in 2015 has attracted $ 61 billion in assets for its bond and bond funds that are actively trying to beat the market.