BlackRock Benefits From ETF Boom

BlackRock

Exchange-traded funds (ETFs) are a huge success story. More capital is now invested in exchange-traded funds worldwide than in actively managed funds. And the biggest beneficiary is BlackRock (NYSE:BLK). 

The world’s largest asset manager presented compelling quarterly results a few days ago. And there is much to suggest that its upward trend will continue.

BlackRock: World’s Largest Asset Manager

Last week, investors mainly looked at the major US banks, which kicked off earnings season with their quarterly results. BlackRock is usually not a focus, despite the fact that the company is a pretty big deal.

If you’re not familiar with BlackRock, let me first introduce you to the company. The New York-based fund company was founded in 1988 by Larry Fink. Today, the financial giant employs nearly 17,000 people and is the world’s largest asset manager, with about $9.5 trillion in assets under management. 

In addition to actively managed funds, BlackRock is also a major player in the ETF business with its iShares brand. In this area, the firm is number one with a global market share of around one third. 

Blackrock Benefits From Booming ETF Market

The persistent low-interest-rate environment is benefiting BlackRock, as investors look to ETFs for their income investing needs rather than individual bonds. At the end of September, $9.27 trillion were invested in ETFs – almost 20% more than at the end of 2020. Within ten years, the volume has increased almost sevenfold.

BlackRock, the industry leader, is benefiting from this in particular. The company has been growing steadily for years. Over the past five years, profits have risen by an average of 9%. For the next five years, analysts forecast average profit increases of 14%.

Its third-quarter figures were impressive across the board. Compared to the same quarter last year, revenue rose by 32.13% to $4.82 billion. Net income improved 13.51% to $1.38 billion. With earnings of $8.92 per share, analysts’ expectations were clearly exceeded. 

Upward Trend to Continue

BlackRock shares are in a long-term uptrend. During the recent market correction, the share price dipped. However, after a successful test of the 200-day line, which indicates the medium-term trend, the price recently turned dynamically upwards.

From a chart perspective, nothing stands in the way of an imminent attack on the all-time high of around $960. If the breakout to new highs succeeds, further price increases are to be expected. In the medium term, prices in the region of $1,100 are a realistic target. The BlackRock share remains a promising trend investment.

Dr. Gregor Bauer
Dr. Gregor Bauer
Dr. Gregor Bauer credits his trading success to combining fundamental aspects of a trade with expert technical analysis. A Certified Financial Technician from the International Federation of Technical Analysts (IFTA), he’s rated as one of Germany’s top 300 economic experts.
Dr. Gregor Bauer
Dr. Gregor Bauer
Dr. Gregor Bauer credits his trading success to combining fundamental aspects of a trade with expert technical analysis. A Certified Financial Technician from the International Federation of Technical Analysts (IFTA), he’s rated as one of Germany’s top 300 economic experts.

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