BlackRock profit beats on demand for low-risk funds
Rick Rieder, BlackRock’s CIO of global fixed income, on the market selloff and why some investors are turning to government bonds.
Oct 16 (Reuters) - BlackRock Inc reported a better-than-expected quarterly profit on Tuesday, as more people poured money in its low-risk funds amid heightened trade tensions between Beijing and Washington.
More investors, however, pulled out money from the asset manager's institutional index funds, while putting in more money into its low-risk iShares exchange-traded funds.
The inflow and outflow of funds also show an ongoing shift in investor preference for low-cost funds that make it easier for them to move in and out of market compared with passive stock investing. The company makes money on every transaction in the form of advisory or distribution fees.
Uncertainty in global markets due to an escalating U.S.-China tariff war and a rout in the Turkish lira kept market volatility elevated through most of the third quarter.
The company's iShares ETFs took in $33.67 billion in new money, down from $52.31 billion, a year earlier, while investors pulled out $24.76 billion from its portfolio managed index funds.
BlackRock's total long-term net flows were down $3.1 billion.
Net income attributable to the world's biggest asset manager rose to $1.22 billion in the third quarter ended Sept.30 from $944 million a year earlier.
On a per share basis, BlackRock earned $7.54, compared with $5.76 a year earlier.
Excluding items, the company earned $7.52 per share, while analysts had expected $6.84 , according to I/B/E/S data from Refinitiv.
(Reporting by Diptendu Lahiri in Bengaluru; Editing by Arun Koyyur and Anil D'Silva)