BlackRock soars as investors invest money in ETFs

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The continued appeal of passively managed index funds is one of the main reasons BlackRock thrives in these volatile times for the market. BlackRock said iShares had a total of $ 2.3 trillion in assets in the third quarter – and nearly 70% of that total was for equity funds.

BlackRock revealed the numbers in its latest earnings report on Tuesday. Both revenues and profits easily exceeded Wall Street forecasts.

“As investors around the world navigate the current uncertainty, including the pandemic and uneven economic recovery, BlackRock is responding to the needs of its clients with global information, strategic advice and global portfolio solutions,” said Larry Fink, CEO of BlackRock in a press release.

Actions of Black rock (BLK) rose 3% on the news. BlackRock stock has now jumped more than 25% in 2020 thanks to its good results.

BlackRock, like most of the big companies on Wall Street, has had to adapt during the coronavirus outbreak.In a conference call with analysts, Gary Shedlin, CFO of BlackRock, said the company was “able to migrate very quickly from 16,000 people in 60 offices to 16,000 people and 16,000 offices.” He added that only around 6-7% of his staff are back in the office.

But Fink said he now works out of BlackRock’s New York City headquarters about three times a week and finds the experience “very productive and incredibly stimulating.”

The asset management company is also thriving at a time when most of Wall Street’s other investment banks are struggling.

JPMorgan Chase (JPM), despite strong results from its own Tuesday morning, is still down more than 25% this year. Rivals actions Citigroup (C), Bank of America (BAC) and Goldman Sachs (GS) are also all in the red for 2020.

Fink said on the conference call with analysts that he was encouraged by an “improving macroeconomic backdrop” that has fueled the broader stock rally – and the surge in major tech stocks in particular – over the past few years. month.

Still, Fink warned that investors “will have to manage growing risk in the months to come.” He highlighted concerns about restarting economies globally, a delay in recovery in the United States, and the potential for next month’s election results in the United States to impact economic policy.

He also said that there continues to be a “silent retirement crisis” in the United States as many older investors lack the financial resources they need for their after-work years.

In that sense, Fink said many older investors will need to be more aggressive with their retirement savings. US Treasury yields are woefully low because the Federal Reserve is keeping interest rates at zero. A 10-year bond pays less than 0.75%.

“There is no doubt that government bonds will play less and less of a role for most retirement portfolios,” said Fink. “You certainly wouldn’t use government bonds for income. “

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