Oct. 6, 2014, 12:29 PM
- Thanks to its iShares franchise, BlackRock (BLK -0.4%) has been a massive beneficiary of the trend of shunning actively managed mutual funds for low-cost ETFs. Still, active funds remain an enticing source of business for BlackRock, and it's busy recruiting fund managers, rolling out new offerings, and changing the way it sells the products.
- BlackRock's more than 100 open-end active funds have just $220B of the $15T U.S. fund market, meaning there's plenty of room for growth compared to its core ETF business which already holds a 40% market share.
- Some of the new fund hires have struggled, others have done well, but in the area of capturing more of the "retail" market, BlackRock remains encouraged.
Oct. 3, 2014, 3:00 PM
- Bill Gross' move to Janus (JNS -2.1%) was enough to get Citi's William Katz to pull his Sell/Underweight rating, but he's not upgrading any higher than Neutral for now. Katz says Gross has requested just one trader to assist him, and notes no one from Pimco has joined him, suggesting one of Gross' edges - his ability to get more and better information than anyone else in fixed-income - is no longer there.
- Katz says the market has priced into Janus a $25B-$50B migration of assets, thus setting up for disappointment should AUM growth not reach those lofty levels.
- Bigger winners might be shops like DoubleLine, MetWest, and BlackRock (BLK +1%) - whose Aggregate Bond ETF (AGG -0.1%) broke its inflow record in the days following Gross' departure.
Sep. 30, 2014, 10:35 AM
- The Total Return ETF (NYSEARCA:BOND) - far smaller, but following a similar strategy to the Total Return Fund - saw $446.5M pulled on Friday following the announcement of Bill Gross' departure from Pimco. The redemption accounted for 12.5% of the fund's shares. Withdrawals slowed to $98M yesterday.
- It seems a good portion of those funds were placed for at least safekeeping BlackRock's (NYSE:BLK) iShares Core U.S. Aggregate Bond ETF (NYSEARCA:AGG), which saw more than $400M of inflows.
- What's Pimco selling? Traders say Pimco was seeking bids on more than $170M of agency-backed CMBS.
Sep. 24, 2014, 12:37 PM
- While the probe into whether Pimco juiced the returns of its Total Return ETF highlights the boosted regulatory scrutiny the entire asset management industry faces, it nevertheless offers an opportunity for Pimco's rivals to pick up market share, says Citi's William Katz.
- "First order beneficiaries," says Katz, are BlackRock (BLK +0.6%), AllianceBernstein (AB -0.3%), and Legg Mason (LM -0.1%), followed by Franklin Resources (BEN +0.7%) and Invesco (IVZ). He's quick to point out the gains should be marginal and general industry pressure on fixed income likely looms more important. One who should escape heightened regulatory oversight is WisdomTree (WETF +0.2%) thanks to its minor fixed income business.
Sep. 23, 2014, 2:37 PM
- Among the changes BlackRock (BLK -0.9%) is urging in a new paper is replacing banks as the primary middlemen in the market and moving transactions to electronic markets. Another: Encouraging companies to issue debt with more standardized terms, thus cutting the complexity of the market.
- Despite years of effort by BlackRock and others to wrest control of corporate debt trading from banks, the top ten dealers still control more than 90% of trading, according to Greenwich Associates. For now, ZIRP is masking many issues, but the price gaps and scant liquidity remain.
- “These reforms would hasten the evolution from today’s outdated market structure to a modernized, ‘fit for purpose’ corporate bond market."
- ETFs: LQD, CORP, CRED, QLTA, COBO, IGS, QLTB, CBND, IGU
Sep. 8, 2014, 1:11 PM
- Aiming to boost its oversight of asset managers - mutual funds, hedge funds, private-equity - the SEC is prepping new disclosure rules supposedly to allow the agency to better assess whether the companies pose systemic risk.
- The top 5 firms are: BlackRock (BLK), Vanguard, State Street Global Advisors (STT -0.1%), Pimco (OTCQX:AZSEY -0.3%), and Fidelity.
- Among the concerns are some mutual funds' use of derivatives to boost returns, reports the WSJ, citing sources at the SEC.
- Another issue down the road could be the SEC requiring living wills along the lines of what's been ordered from the largest banks (a fiasco to this point).
- The large asset managers had previously been under scrutiny by the Financial Stability Oversight Council to possibly be labeled as SIFIs, but the FSOC backed down this summer amid a heavy lobbying push by the big players.
Aug. 28, 2014, 1:14 PM
- It's another round of fee cuts from Vanguard on a range of its European mutual funds and ETFs, as well as the company's entire suite of LifeStrategy funds. Annual management charges on Vanguard's index mutual funds will now range from 8 to 38 basis points, and fees on four ETFs have been cut by 7 to 29 bps, effective Monday.
- Vanguard came onto the fund scene in Europe five years ago and doubled mutual fund sales in 2013 to €8.6B, making it the 4th best-selling manager (from 20th in 2012). ETF flows look good as well, with $4.3B of inflows this year already surpassing $3.6B for all of 2013.
- Watching the competition are BlackRock (BLK -1.5%) and Deutsche Asset & Wealth Management (DB -2.1%).
Aug. 27, 2014, 9:38 AM
- Moving closer to launching its own QE, the ECB hires BlackRock (BLK +0.2%) to advise on the design and implementation of an ABS-purchase plan. An ECB spokesman says safeguards against any conflict of interest are included in the agreement between the central bank and the money manager with more than $4T of AUM.
Aug. 21, 2014, 9:04 AM
- Investors poured a net $336B into passively managed stock and bond funds last year vs. $53B into traditional mutual funds. Thus far in 2014, the passive funds have seen $177B of inflows vs. $74B into actively-managed funds. As for just stocks, those funds have received $128.4B of inflows this year vs. just $18B for traditional mutual funds.
- Helping Vanguard is its "2nd-best salesman" Warren Buffett, who advised his estate's trustee to put 10% of his cash in short-term government bonds and the rest in a very low-cost S&P 500 index fund - Vanguard's, he suggested. in the five months following that note, Vanguard saw $5.5B of inflows, about triple the amount seen in the same period the previous year.
- Vanguard's gains have come amid major losses for rival Pimco (OTCQX:AZSEY), whose Total Return Fund with $223B in assets can no longer lay claim to being the world's largest mutual fund. That title now goes to Vanguard's Total Stock Market Index Fund with nearly $300B in AUM.
- Also benefitting from the passive wave is BlackRock (NYSE:BLK), whose iShares ETFs have received $53B in inflows this year, the largest amount of any fund company.
Aug. 13, 2014, 2:38 AM
- The SEC has launched an investigation into examining alternative mutual funds, following their recent surge in popularity.
- The funds in question typically employ investment strategies that imitate those of hedge funds, such as investing in private debt or shorting assets, and command higher fees.
- Investigations will be conducted at large investment firms such as BlackRock (NYSE:BLK) and AQR Capital Management, as well as smaller firms that previously didn't offer mutual funds.
- Related tickers: GS, BK
Aug. 3, 2014, 10:28 AM
- Wall Street firms led by Goldman Sachs (NYSE:GS) are closing in on a deal to purchase a stake in chat and instant messaging start-up Perzo as an alternative to Bloomberg's similar application, Reuters reports.
- Bloomberg has dominated Wall Street for years, but banks have been looking for a substitute as sluggish trading volumes and higher regulations weigh on revenues. Bloomberg's trading and news terminal costs about $20,000 a year, while Perzo's applications are open-source and free. Bloomberg customers must also buy an entire terminal, and cannot just buy the messaging system and adapt it.
- Several other banks and asset managers have received term sheets for the Perzo deal and have recently signed non-disclosure agreements including Morgan Stanley (NYSE:MS), JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC), Deutsche Bank (NYSE:DB), HSBC (NYSE:HSBC), and BlackRock (NYSE:BLK).
- Goldman has been looking at alternatives to Bloomberg's messaging program for years, and launched a project internally called "Babel" in early 2013 to develop a competitor.
Jul. 24, 2014, 4:42 AM
- U.S. regulators have voted 3 to 2 to pass the new restrictions on the $2.6T U.S. money market industry to avoid a recurrence of the jeopardized corporate lending which arose during the 2008 financial crisis.
- The rules "will reduce the risk of runs in money market funds and provide important new tools that will help further protect investors and the financial system," says SEC chairwoman Mary Jo White.
- Related tickers: BLK, SCHW, BAC, FII, TROW, EV, BEN, GBL
Jul. 23, 2014, 6:29 PM
Jul. 23, 2014, 1:25 PM
- "BlackRock (BLK -0.5%) supports the SECs efforts to improve the resiliency of U.S. money market funds during times of stress and appreciates the thoughtful, deliberate and consultative process the Agency has undertaken to achieve this result."
- The new rules are aimed primarily at institutional investors and retail is not likely to be affected by temporary blocks from removing money and/or gate fees. This means primarily institutional shops like Federated Investors (FII -0.4%) are more likely to notice the change than retail-focused Schwab (SCHW -0.2%). Federated gets 40% of its revenue from its money-fund - a far higher ratio than BlackRock - and, not surprisingly, was an opponent of the rule change.
- Source: Press Release
- Previously: SEC to adopt money fund regulations
Jul. 23, 2014, 2:26 AM
- U.S. regulators are expected to approve new rules that force prime money funds held by corporations or large institutions to float their share price instead of the stable $1 per share NAV.
- The new rules are aimed at avoiding a repeat of the investor stampede out of the $2.6T industry, which endangered corporate lending during the financial crisis.
- Additionally, the SEC's new plan will include a second provision which will limit access or impose fees on investors if they redeem shares in times of market tumult.
- Related tickers: BLK, SCHW, BAC, FII, TROW, EV, BEN, GBL
Jul. 16, 2014, 7:49 AM
- Adjusted net income of $837M or $4.89 per share compares to $722M or $4.15 a year ago. Adjusted operating margin of 42.4% gains 110 basis points.
- AUM of $4.593T up 19% Y/Y, with $38B of long-term net inflows during Q2. Q2 retail net inflows of $13.1B brings AUM to $534B. iShares inflows of $30.4B brings AUM to just under $1T.
- CC at 8:30 ET
- Previously: BlackRock beats by $0.43, beats on revenue
- BLK +1% premarket
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