BlackRock (NYSE: BLK) Chief Executive Larry Fink during the firm’s fourth-quarter earnings call this week said the company continues to be “heavily focused” on ETFs, which represent nearly a quarter of its long-term assets under management.
The BlackRock CEO sees a “secular shift to passive investing in the ETFs.”
The firm’s iShares lineup led all ETF providers in terms of 2012 inflows. In the fourth quarter, BlackRock gathered $35.7 billion of ETF flows, while the iShares business accounts for $752.7 billion, or 22% of BlackRock’s total long-term assets. [ETFs Boost BlackRock’s Quarterly Profit]
The iShares MSCI Emerging Markets (NYSEArca: EEM) is one product that has been driving strong ETF flows recently at BlackRock. So far in 2013, investors have added $3.4 billion to the emerging markets fund, the most for any ETF.
Vanguard FTSE Emerging Markets (NYSEArca: VWO) is dropping the MSCI index that EEM tracks. [Vanguard Emerging Market ETF Kicks Off Index Transition]
There is speculation that some institutional investors who prefer MSCI benchmarks are leaving the Vanguard ETF due to the switch to the FTSE index, Barron’s reports.
VWO, the Vanguard emerging market ETF, has a lower expense ratio than EEM. However, BlackRock did recently roll out the iShares Core MSCI Emerging Markets (NYSEArca: IEMG), which has an expense ratio of 0.18%. Last year BlackRock introduced the iShares Core Series of ETFs targeting buy-and-hold investors. [BlackRock ‘Core’ iShares ETF Family]