BlackRock, Inc. (BLK), the largest ETF provider, is seeing an acceleration of ETF inflows into equities, and is set to benefit from this potential industry migration due to its immense group of ETFs, says Macrae Sykes, Research Analyst at Gabelli & Company, Inc.
“BlackRock highlighted what it sees as a structural change in the industry. It has seen an acceleration of ETF inflows both into equities and fixed income globally, so there was a significant step to passive ETF investing in the fourth quarter,” Sykes said.
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This migration is significant for BLK because the incremental margins on those flows are very high, despite average fees being lower than traditional mutual funds, and the size of BLK‘s ETF group will allow the company to shift some of its fixed income, Sykes says.
“BlackRock…has such an enormous complex, and to the extent that it can shift some of its fixed income, money-market assets into its higher-yielding equity products, that would benefit them,” Sykes said.
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