BlackRock, the fund management giant, on Wednesday reported an inflow of money to its main investment funds in the third quarter even as investors reacted to volatile swings in stock and bond markets.
BlackRock is the world’s largest publicly traded money manager and the leading provider of exchange-traded funds — the mutual fund industry’s fastest-growing investment vehicle. As such, its financial performance is closely watched by market participants.
The company said on Wednesday that earnings for the third quarter on an adjusted basis declined 5 percent, to $ 844 million, or $ 5 a share, from $ 890 million, or $ 5.21 a share, in the quarter a year ago.
The muted results reflect today’s highly uncertain investment performance. As stock and bond markets swooned in August and September, many investors withdrew their money in the hope of riding out the storm.
Nevertheless, BlackRock reported net investment flows of $ 50 billion, driven by $ 23 billion moving into its exchange-traded funds called iShares. In the second quarter, the firm had net investment outflows of $ 7.3 billion.
Overall assets under management, the most crucial gauge for investment managers, fell to $ 4.5 trillion at the end of September, from $ 4.7 trillion at the end of June.
Assets in the firm’s main profit driver — exchange-traded funds — were $ 1 trillion at the end of the quarter, mostly flat from the quarter that ended in June and up from $ 975 billion a year ago.
“Despite all the insecurities in the market, we had $ 50 billion in growth,” said Laurence D. Fink, BlackRock’s chief executive. “We can’t control world markets, but because of our diverse range of products, we are in a very good position.”
Mr. Fink also addressed some of the criticisms leveled at the exchange-traded funds industry after the events of Aug. 24, when the prices of a number of the funds fell sharply relative to their underlying assets.
Several industry participants have said the price dislocations should be seen as a warning for the sector, which has absorbed enormous fund inflows in the past four years.
“We didn’t have the problem — this was a market structure problem,” Mr. Fink said. “It was a big event, but 90 minutes later, everything was fine.”
Moreover, he pointed out, inflows into exchange-traded funds have only increased since that day.
Addressing the broader state of the markets, Mr. Fink, who was in Lima, Peru, last week for the fall meetings of the International Monetary Fund, said he sensed an easing of the persistent gloom that has affected global markets recently.
In particular, he cited public comments from senior Chinese officials that there would not be a second, larger devaluation of the renminbi.
“That was the biggest risk — that there would be another Chinese devaluation,” Mr. Fink said. “I think that the markets will rally between now and year-end.”
Compared with other money managers like Pimco and Franklin Templeton, which have had substantial investor outflows because of their heavy exposures to volatile international markets, BlackRock has performed better.
Seeking safety from plunging bond and equity markets, investors piled into the company’s exchange-traded funds that invest in safer securities like United States Treasury bills.
Exchange-traded funds are investment vehicles that track a certain bond or stock index but trade like stocks, allowing investors to buy and sell them on a whim.
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