BlackRock Inc. (BLK) , the largest U.S. money manager, just keeps getting bigger, thanks to the ongoing shift by investors from mutual funds into exchange-traded funds.
And the company’s earnings and stock price keeps going up.
On Tuesday, the New York-based firm said third-quarter net income jumped 13% from a year earlier to $969 million, fueled by rising fees as clients poured more money into accounts at the firm while U.S. stock markets climbed to record highs. Clients brought $76 billion of new assets to BlackRock, helping to push total assets to $5.98 trillion.
That’s more than double the balance sheet of JPMorgan Chase & Co. (JPM) , the largest U.S. bank.
BlackRock’s earnings per share were $5.92, beating the average $5.57 estimate in a FactSet survey of 14 analysts. The stock price jumped 1.5% in New York trading Tuesday to a record $472.86 a share.
“Net revenue came in well above our expectations,” analysts at the brokerage firm Jefferies wrote in a report.
About two-thirds of the new assets, or $52.3 billion, went into BlackRock’s juggernaut iShares exchange-traded funds, according to the company.
BlackRock has benefited from the surge in demand for ETFs, which generally track markets rather than trying to beat them and in turn charge lower fees than traditional mutual funds run by active stockpickers.
Over the past decade, actively managed stock funds have seen net outflows of $1.1 trillion, while index funds and ETFs have pulled in a net $1.4 trillion, according to the Investment Company Institute.
“The investments we have made in iShares are showing real-time results,” BlackRock CEO Laurence Fink said on a conference call with analysts and investors. The ETF business is “increasingly driving our flows.”