‘Idiosyncratic’ Withdrawals
Investors pulled $1.5 billion from BlackRock’s fixed-income ETFs, and removed $5.1 billion from actively managed stock funds.
Fink said today during a conference call with investors that he is pleased with the performance of BlackRock’s active equity products, and that the “idiosyncratic” withdrawals were a result of international uncertainty in the markets. Deposits into active fixed-income products were fueled by BlackRock’s performance and the fact that institutional clients had more cash on hand to invest, Fink said.
As BlackRock has sought to improve deposits into active stock funds, Chris Leavy, chief investment officer of BlackRock’s fundamental equity unit in the Americas, replaced portfolio managers at strategies that represented about 40% of the division’s $115 billion. Leavy is currently on medical leave.
In March, BlackRock enhanced its partnership with Boston- based Fidelity Investments to sell more ETFs directly to individual investors. Fink said today that the relationship will help stabilize quarterly investor deposits.
Averting Default
Fink said during a telephone interview today he thinks the U.S. will avert a default by the end of the month, yet the debate is dissuading foreign investors from buying U.S. securities.
“Do I believe there will be some resolution and that we don’t default? The answer is still yes,” Fink said.
ETFs have been the fastest-growing segment of the asset- management business, benefiting firms such as BlackRock, Vanguard Group Inc. and State Street Corp. In the 12 months ended Aug. 31, ETF assets in the U.S. increased 21% to $1.47 trillion, according to data from the Washington-based Investment Company Institute, the fund industry trade group.
Investors pulled about $60 billion from U.S. bond funds during the third quarter, according to estimates from the ICI amid concern that the Federal Reserve may reduce its bond purchases. BlackRock had about one-third of its assets in fixed income as of Sept. 30.
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