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© Reuters. FILE PHOTO: The Company Logo and BlackRock Business Information are displayed on a NYSE ground floor screen
By Saqib Iqbal Ahmed and Trevor Hunnicutt
NEW YORK (Reuters) – BlackRock Inc. (NYSE: NY), the world's largest asset manager, has announced better-than-expected earnings in the first quarter and generated more than $ 65 billion in cash for investors. global financial markets rebounded after a volatile fourth quarter.
Total assets under management increased 3% to $ 6.52 billion in the quarter from March 31 to March 31 compared with the previous year, amid a general recovery in global equity markets. Assets fell below $ 6 trillion in the turmoil at the end of last year.
Total quarterly net inflows for all types of products jumped 13.6% to $ 64.67 billion from the previous year.
Overall, the company sold $ 59 billion of equity, bond and other "long-term" funds, up from $ 43.6 billion in the quarter ended December 31.
BlackRock shares rose 2.2% to $ 461.56 early in the session.
The US economy is accelerating again after a slowdown and the market is preparing for massive stock inflows, BlackRock Inc. Chief Executive Officer Larry Fink told Reuters on Tuesday.
"I think people are still under risk, despite the big rebound," said Fink.
The benchmark, which fell 14% in the last three months of 2018, rebounded 13% in the first quarter, its best performance since the third quarter of 2009.
BlackRock lost more than $ 26 billion of its equity portfolio in the first quarter, but this was more than offset by a $ 80 billion increase in fixed income. Long-term investments increased by $ 59 billion.
"Investment flows seem stronger than expected," said Kyle Sanders, an analyst at St. Louis-based financial services firm Edward Jones.
"BlackRock has a very strong reputation in fixed income management and it seems that this asset class has regained favor with interest rates." It has led to a drop in interest rates. I think this has generated better than expected asset flows, "said Sanders.
Net inflows of institutional funds increased ninefold to $ 29.12 billion from the previous year.
Net profit attributable to BlackRock fell to $ 1.05 billion, or $ 6.61 per share, in the first quarter from $ 1.09 billion, or $ 6.68 per share, a year ago. This far exceeded analyst expectations of earnings of $ 6.13 per share, according to Refinitiv's IBES data.
BlackRock said its iShares brand ETFs generated $ 30.69 billion in new funds, up from $ 81.40 billion in the fourth quarter.
Revenues from technology services, a key area of BlackRock, increased 11% to $ 204 million.
Despite this, the Company continued to feel the effects of interest rate pressures as a result of the ongoing shift across the industry from actively managed, high-fee mutual funds to passive investment products. at reduced costs.
Base fees fell 5% year-over-year, mainly due to negative markets in the fourth quarter and the strong US dollar, which eroded fees, BlackRock said.
"I think we knew quite well that fees would be falling, not just for BlackRock, but for any asset manager simply because they're based on an average of market values throughout the quarter." and that we started the quarter at such a low point, "said Edward Jones Sanders.
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