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The rise of stock markets and the popularity of a new Bitcoin exchange-traded spot fund has enabled BlackRock to record $10.5 trillion in assets under management and net income that rose by more than a third.
The world's largest financial manager reported a 36 percent year-on-year jump in net income to $1.57 billion in the fiscal first quarter, with an 11 percent increase in revenue to $4.7 billion. Those numbers, along with adjusted net income of $1.47 billion, all beat the expectations of analysts surveyed by Bloomberg.
However, net inflows of $57 billion were disappointing, dragged down by outflows of $19 billion from cash management products.
In a statement on Friday, CEO Larry Fink pointed to a “strong pipeline” of opportunities. “We see significant growth potential in infrastructure, technology, retirement and entire portfolio solutions,” he said.
BlackRock was one of dozens of providers to launch a Bitcoin spot exchange-traded fund in the first quarter, but its product has been a runaway success story: It reached $10 billion in assets in record time and now has $18.7 billion. This helped push total inflows into ETFs this quarter to $67 billion.
Most of the $1.4 trillion annual increase in assets under management is due to rising stock markets. In the US, the S&P 500 had its best first quarter since 2019. Fixed income funds reported inflows of $42 billion, and equity funds received $18 billion.
“What people will focus on is their ability to accumulate assets. It's a mixed bag,” said Kyle Saunders, an analyst at Edward Jones.
BlackRock and other asset managers had been anticipating a big shift toward fixed income, but the US Federal Reserve's decision to keep interest rates at their highest level in 23 years has so far dampened demand.
Technology revenues, favored by investors because they are somewhat less tied to market volatility, rose $37 billion year over year to $377 billion.
BlackRock's operating margin improved to 35.8 percent, slightly better than analysts expected. The money manager announced small job cuts in January as part of a broader effort to control costs.
BlackRock shares rose about 2.6 percent in pre-market trading on Friday. The company's stock price falls slightly in 2024, after a strong fourth quarter during which it rose more than 25 percent.
