BlackRock (NYSEArca: BLK) saw net outflows in its iShares ETFs in the second quarter as investors sold fixed-income and alternatives products on worries the Federal Reserve would taper its bond purchases. However, iShares flows have rebounded strongly so far in July and the firm’s chief executive is upbeat on the future of the ETF business.
“We are in a secular bull market for ETFs,” BlackRock CEO Larry Fink said during the company’s second-quarter earnings call Thursday.
The overall iShares business experienced net outflows of $963 million in the quarter, driven by redemptions in the fixed-income and alternatives segments. However, equity ETF flows were solid with about $2.7 billion moving in, according to BlackRock’s quarterly results.
“iShares are used as an investment vehicle but also used as an exposure tool by our clients,” Fink said Thursday.
During the market volatility in June, investors used ETFs to express their views on emerging markets and bonds — they sold. [ETFs Performed Well in Stressed Market: iShares]
On May 22, Fed chief Ben Bernanke first indicated the Fed could scale back its bond-buying program. In the three weeks following May 22, iShares experienced redemption of nearly $15 billion. [Biggest ETF Casualties of Fed Taper Talk: Gold, Emerging Markets and Bonds]