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BlackRock, the owner of iShares, the world’s largest provider of exchange-traded funds, has reported third quarter 2013 diluted earnings per share of $4.21, up 15% from a year ago.
Revenue increased 7% from the third quarter 2012, reflecting growth in markets, long-term net inflows and demand for portfolio analytics services. Operating income for the third quarter 2013 was $966 million with an operating margin of 39.1%.
The firm reported assets under management of $4.1 trillion, up 12% year-over-year, which included £857 billion invested in iShares ETFs, and long-term net inflows over the quarter of $25.3 billion, of which $20.3 billion was contributed by iShares.
The ETF business generated $721 million in base fees over the quarter (a figure which includes investment advisory, administration fees and securities lending revenue), representing 35% of the firm’s total base fee revenue.
In terms of flows, iShares’ long-term net inflows included US and European iShares net inflows of $16.4 billion and $5.0 billion, respectively. Renewed appetite for emerging markets and broad market European equity exposure in the latter part of the quarter drove equity net inflows of $21.1 billion, partially offset by fixed income net outflows of $1.5 billion. The low-cost iShares Core Series generated $2.0 billion of net inflows, concentrated in US equity.
Commenting on the results, Laurence D. Fink, Chairman and CEO of BlackRock, said: “Our solid third quarter 2013 results are continued evidence of the benefits of our broad, diversified investment platform and strong investment performance. Long-term net inflows of more than $25 billion reflected positive flows across all major asset classes and geographies, driven by demand for outcome-oriented solutions, unconstrained fixed income and retail alternative strategies”
He added: “Our iShares ETFs also saw strong net inflows as liquidity-oriented investors turned to iShares once again to increase exposure during the quarter, and as buy-and-hold investors continued to access our Core Series product suite, which has attracted $9 billion of inflows year to date.”