BlackRock sees record investor cash flows

BlackRock Inc., the world’s largest asset manager, is hauling in investor cash at a record rate. There is one issue: the money is moving into lowfee products which track indexes, pinching revenue. BlackRock managed to boost profits in the fourth quarter, though revenue barely grew.

The firm was a prime beneficiary of a record year in exchange-traded funds. BlackRock attracted $140 billion (Dh514 billion|) to its iShares business last year, including $60 billion in fixed-income ETFs. Vanguard Group Inc., the second biggest player in the ETF business, gathered $93 billion. But asset managers are also in a race to the bottom on fees to win investors. In December, BlackRock trimmed expenses on six smart beta ETFs, signalling that the price war was moving beyond plain vanilla products.

“In 2016, it is fair to say across all investor types there was a movement more toward passive strategies,” Chief Executive Officer Laurence D. Fink said in an interview Friday after the earnings were released.