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How iShares supports growth at BlackRock

Robert Karr

BlackRock: A look into the earnings of the world's largest asset manager (Part 3 of 9)

(Continued from Part 2)

BlackRock leads ETFs

The ETF market has grown a great deal in the last decade. The major reason for growth at BlackRock is the cost-efficient and convenient way investors can put their money in equity, fixed income, currencies, and commodities. BlackRock has the highest market share in the United States and worldwide.

BlackRock expanded in the last year, receiving a record $102.8 billion. The tally is the highest BlackRock has ever received since the company acquired the division from Barclays (BCS) in 2009.

In 2014, a total of $330 billion was infused into ETFs around the globe. BlackRock attracted approximately 31% of that amount. The new funds have further strengthened the company’s positioning in the fast-growing ETF market.

Some of BlackRock’s most successful ETF offerings include iShares MSCI Emerging Markets ETF (EEM), iShares Russell 2000 ETF (IWM), and iShares MSCI Japan ETF (EWJ).

Variety in product offerings

BlackRock (BLK) launched new ETFs in the fourth quarter, both inside and outside US markets. High growth in the segment has contributed significantly to the company’s top line.

For the fourth quarter, iShares generated approximately 30% of the total revenues of $2.8 billion. But the company manages 23% of the total AUM (assets under management). BlackRock is offering 300 ETFs under its iShares brand comprised of equity, debt, and commodity-tracking ETFs. In October 2014, it introduced iShares MSCI Emerging Markets Horizon ETF (EMHZ) to track the performance of emerging markets.

The company’s growth in the ETF segment will also depend on how fast new strategies are deployed by competitors such as State Street (STT), Morgan Stanley (MS) and BNY Mellon Asset Management (BK). Together they make up 4.47% of the Financial Select Sector SPDR Fund (XLF).

Continue to Part 4

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