“This new iShares Core Series enables us to better serve and capture market share in this important, highly competitive and price-conscious segment of the buy-and-hold investor,” Robert Kapito said in an October earnings call. He added that the Core strategy should help the firm grow market share and generate double-digit organic growth in the United States. [What the Flows Show: A Year of Records for ETFs]
But some question whether the Core initiative will be able to sustain the momentum long-term. “The bigger story is they had a massive increase in advertising spending,” says Morningstar analyst Michael Rawson. [S&P Ranks Largest ETF Managers]
Rawson questions if after the marketing and ad spending has ceased, will the flows continue to add up. An ETF such as the iShares MSCI Emerging Markets ETF (NYSEArca: EEM) is now targeted at institutional investors and traders. The Core MSCI Emerging Markets ETF (NYSEArca: IEMG), which took EEM’s place, did see a boost in sales at the end of 2012.
BlackRock shows no signs of slowing down domination of the ETF industry, as the provider recently acquired Europe’s fifth largest such business, Credit Suisse. This addition is intended to strengthen the firms presence in Europe and boosting overall growth, reports Zacks.
Tisha Guerrero contributed to this article.
Full disclosure: Tom Lydon’s clients own EEM.