BlackRock, the owner of the wildly popular iShares family of exchange-traded funds and the world’s largest asset manager, has gotten even bigger during the Covid-19 pandemic. BlackRock said Tuesday that it now has $7.8 trillion in assets under management, a 12% increase from last year.

a man in a cage: A pedestrian wearing a protective mask walks past BlackRock Inc. headquarters in New York, U.S, on on Thursday, July 9, 2020. BlackRock is scheduled to release earnings figures on July 17. Photographer: Jeenah Moon/Bloomberg via Getty Images

© Jeenah Moon/Bloomberg/Getty Images
A pedestrian wearing a protective mask walks past BlackRock Inc. headquarters in New York, U.S, on on Thursday, July 9, 2020. BlackRock is scheduled to release earnings figures on July 17. Photographer: Jeenah Moon/Bloomberg via Getty Images

The continued allure of passively managed index funds is a big reason why BlackRock is thriving during these volatile times for the market. BlackRock said that iShares raked in $2.3 trillion in assets during the third quarter — and nearly 70% of that total was for stock funds.


Load Error

BlackRock disclosed the numbers in its latest earnings report Tuesday. Revenue and profit easily surpassed Wall Street’s forecasts.

“As investors around the world navigate current uncertainty, including the pandemic and uneven economic recovery, BlackRock is serving clients’ needs with global insights, strategic advice and whole-portfolio solutions,” said BlackRock CEO Larry Fink in a press release.

Shares of BlackRock rose more than 4% on the news. BlackRock’s stock has now surged nearly 25% in 2020 thanks to its strong results. The asset management company is thriving at a time when most other Wall Street investment banks are struggling.

JPMorgan Chase, despite posting solid results of it own Tuesday morning, is still down more than 25% this year. Shares of rivals Citigroup, Bank of America and Goldman Sachs are all in the red for 2020 as well.

Continue Reading

Source Article

By Ross Kerber and Matthew Green

BOSTON/LONDON (Reuters) – Five Democratic U.S. senators on Thursday asked BlackRock Inc

to justify why it rarely supported shareholder resolutions tied to climate change issues despite its increased focus on the environment this year.

The proxy voting record of the top asset manager is “troubling and inconsistent,” according to a letter sent to Reuters by the office of U.S. Senator Brian Schatz of Hawaii and signed by four others.

In a statement sent by a spokesman, BlackRock said its work on behalf of clients includes both voting and engagement, or talks with corporate managers. It cited certain negative proxy votes cast this year and noted the company now more often publishes details about votes.

“We are currently reviewing our engagement priorities and voting guidelines,” BlackRock said.

BlackRock CEO Larry Fink in January had vowed to press companies to do more to combat climate change, underscoring the shifting moods of clients and reflecting new money pouring into sustainable investing strategies.

But a pair of recent studies found that BlackRock supported climate-related proxy resolutions only around 10% of the time this year, in line with its past record. Other companies took a more aggressive tack this year, notably the asset-management arm of JPMorgan Chase & Co.

Schatz’s letter cited one of those studies and noted how in several cases BlackRock’s support for management was decisive. He also wrote that BlackRock backed nearly all directors at oil, gas and utility companies.

Earlier on Thursday, speaking at an online news conference about efforts to limit climate change, BlackRock Vice Chairman Philipp Hildebrand said the company had appointed new leaders to its stewardship team.

“As a result of our commitment and these changes that were implemented during this transition year, you should certainly expect that our voting engagement outputs

Text size

Signage is displayed at the entrance to BlackRock Inc. headquarters in New York

Jeenah Moon/Bloomberg

Deutsche Bank

upgraded BlackRock and Eaton Vance shares to a Buy, citing “powerful” demand for sustainable investing that could bring a tide of cash to the asset-management companies,

Asset growth at both firms can average “5% or better,” beating their peers, the bank said. That would allow both stocks to trade at premiums to the asset-management group, according to Deutsche analysts led by Brian Bedell.

Asset managers “have an opportunity to substantially enhance organic growth” by developing products focused on offering a positive impact in terms of ESG, or environmental, social and governance factors, Deutsche Bank wrote. Many asset managers have been embedding ESG into their investment processes, it said, but strategies specifically focused on ESG are doing far better at attracting assets.

That trend is expected to continue “given rising awareness of ESG issues globally and the greater importance younger generations place on investing for ESG impact,” the bank said. This year, growth in sustainable investing jumped as concern over climate change mounted and the Covid-19 pandemic highlighted the importance of social issues, it said.

According to one survey from Federated Hermes Investors, nearly two-thirds of respondents now consider social factors as part of their investment process.

In the past, one hurdle for ESG investing was a perception that such funds underperform relative to others, or that investing with a social purpose would violate fiduciary responsibility. That has been the position of the Labor Department, which is weighing an unpopular proposal to curb ESG options in 401(k) retirement plans.

Those concerns are unfounded, Deutsche Bank suggested, because investors don’t appear to be sacrificing performance by buying ESG funds. Funds not explicitly identified as ESG, but ranked as highly sustainable by Morningstar, also