BlackRock chief executive Larry Fink has warned that investors are rethinking active management as ETFs drives the asset manager’s record full year results, which saw net inflows total $202bn.
Published today, the results showed $98bn of inflows in the fourth quarter, which BlackRock said was led by its ETFs business iShares and institutional business. For the full year $140bn of inflows came from iShares with $60bn of that going into fixed income.
On the other hand retail long-term net outflows for the full year totalled $2.4bn.
Fink says the inflows spanned product types, but warns investors are rethinking active management.
“While domestic equities rallied following the US election, the combination of a strengthening dollar, underperforming international equities and negative fixed income markets produced challenging outcomes for global investors.
“Investors are rethinking their approach to active management, asset allocation and portfolio construction, and we’re seeing more clients use active and index strategies together to deliver returns.
“We have purposefully invested in our platform to provide clients with a full spectrum of offerings including cash, market cap-weighted indexes, smart beta and factor-based investment strategies, and high-conviction active products, whether fundamental, quantitative or illiquid.”
Fink says both retail and institutional investors are increasingly using ETFs in their portfolios creating a deeper market for trading.
The retail results showed equity net inflows of $1.7bn, while fixed income and multi asset saw net outflows of $1.8bn and $1.7bn respectively.
The asset manager is increasing its quarterly cash dividend by 9 per cent to $2.50 a share.