BlackRock reaches record $6tn assets, helped by Trump tax law MARKETS

BlackRock charged past a record US$6 trillion in assets, its profit beating Wall Street forecasts, as investors flooded into the relatively low-cost funds of the world’s largest asset manager.

A new US tax law, which sliced corporate and individual income rates, also helped the company’s results in the fourth quarter ended December 31. BlackRock said on Friday it had a $1.2 billion tax benefit related to the law and raised its quarterly cash dividend by 15 per cent.

“We’ve been winning more share of wallet,” chief executive Larry Fink told Reuters. “Fees are really important and are becoming more important.”

Mr Fink said the tax reform was putting more money in his clients’ pockets, which they would need to invest, and that the increased cash could allow him to invest more in the company’s future. The New York company’s shares rose 3.3 per cent on Friday.

“Just when we thought, after the third-quarter report, things couldn’t get better, it seems that they did,” said Edward Woods, portfolio manager at Bahl & Gaynor, which owns BlackRock shares.

Strong economic growth, tame inflation and supportive government policies propped up assets in 2017, with most countries’ equity markets recording gains, often at double-digit per centages.

BlackRock has the largest lineup of exchange-traded funds, many of which “passively” track segments of the market at a relatively low fee. Investors’ embrace of those funds caught many of BlackRock’s once-larger competitors flat-footed.

BlackRock said its iShares ETF business took in $54.8bn in new money in the quarter, up from $49.3bn a year earlier. The $367bn the company took in from investors last year overall was a record, while assets under management expanded to $6.29tn.

“Our view is this acceleration – we saw 18 per cent growth rate last year – we think something like that is going to continue for the next couple of years,” said Jennifer Grancio, a managing director at BlackRock focused on the iShares business.

Portfolio managers at BlackRock who try to beat the market also posted a strong year, with 76 per cent of the fund’s actively managed assets in funds ranked in the top half of their Thomson Reuters Lipper category over three years as of November, according to Credit Suisse Group.