BlackRock’ shares grow ahead of competitors
2023.01.11 01:18
BlackRock’ shares grow ahead of competitors
By Ray Johnson
Budrigannews.com – BlackRock, Inc. According to estimates from industry tracker Morningstar, iShares exchange traded funds (ETFs) gained more net flows last year than Vanguard’s ETFs, putting the world’s largest asset manager in the lead for the first time since 2019.
ETFs, which are typically marketed toward retail investors as a cost-effective means of investing in the world’s largest markets, are offered by BlackRock and Vanguard, the world’s two largest asset managers.
In 2021, when COVID-19 stimulus measures pushed retail investors to pile their growing cash balances into such products, total estimated net flows into ETFs were $1.2 trillion, down from $745 billion in the previous year. Morningstar data show that net flows into U.S.-domiciled ETFs have also decreased year over year, from $911 billion in 2021 to $590 billion in 2018.
Net flows into ETFs last year were the second highest they had ever been, with BlackRock’s iShares regaining the top spot despite the annual declines.
According to Morningstar data, estimated net flows into BlackRock’s global iShares ETFs were approximately $220 billion in comparison to Vanguard’s ETFs’ estimated net flows of nearly $214 billion. In the previous two years, there had been more net flows into Vanguard’s ETFs.
A spokesperson for Vanguard stated, “Vanguard funds experienced strong net cash inflows in 2022 despite significant headwinds across all major asset classes.” ETFs remained the preferred method for low-cost, broadly diversified exposure to the stock and bond markets for many investors.”
Despite one of the worst years in decades for fixed income markets, Salim Ramji, global head of iShares and Index Investments, stated that iShares global bond ETFs received a record $123 billion in flows in 2018, up from $80 billion in 2021.
After the Federal Reserve accelerated the pace of its monetary tightening actions with massive interest rate hikes that weighed heavily on bond prices and raised yields, inflows into iShares’ fixed income ETFs increased in the second half of the year.
Ramji stated that flows into bond ETFs in the fourth quarter had a “much more risk on tone within asset class flows.” Investors increased their exposure to longer-term maturities for U.S. Treasuries as investors anticipated a slowdown in rate hikes by the U.S. central bank. Additionally, investors added to corporate bond funds for the first time all year.
During the company’s third-quarter conference call in October of last year, BlackRock’s president, Robert Kapito, stated that he anticipated “dramatic and large inflows” into fixed income in 2023 as a result of higher interest rates.
On Friday, BlackRock will release earnings for the fourth quarter of 2022.
