BlackRock, Inc. (BLK): Fundamentals Strong But Uncertain Global Outlook A Problem

IShares

IShares has already expanded their impetus and presence in Europe over the past 18 months while no other provider has gained incremental market share, and there appears to be some panic amongst competitors (Lyxor recently lost two executives). The transaction could help iShares widen their momentum in the near term and keep others from gaining momentum.

BlackRock announced that iShares dominated the global industry in 2012 by raking in $85.3 billion in new flows. The contributions came in from all regions. However iShares U.S. product line dominated the other regions with a record $61.0 billion of new assets in 2012, outpacing the earlier record of U.S. iShares of $59.1 billion in 2007. IShares global AUM reached $758.6 billion as of 31 December 2012.

In Europe, iShares received 56% of all new money entering European ETPs, recording $18.3bn in net new flows. Canada iShares also witnessed a robust year with asset under management (AUM) increasing to $42.0 billion. The broader Canadian market posted the second highest rate of growth in ETF assets of any region for 2012.

IShares has a wide variety of customers: from capital market participants seeking deep liquidity, to investors wanting specialized exposure, to a growing segment of the market using ETFs as buy and hold investment vehicles.

Conclusion

Larry Fink, CEO of BlackRock, has dismissed talks of resignation. Fink says that he will stay with the company as board agrees. He also said that the company is looking ahead to positive fourth quarter revenue and that the revenue prospects will be favorable. There is a greater focus towards revenue contribution and the company is looking forward to 5% to 6% organic growth.

BLK is well positioned to succeed in the volatile industry, and revenue and income should grow nicely in 2013. The company has stated that it will not expand into different areas just for the sake of growth.

However, there are some issues which cannot be let go. According to management at BLK there are severe headwinds on industry revenues indicating outflows, fading between alpha/beta solutions. Other than this the rising regulatory burdens on the industry and also globally.

Considering all the factors mentioned in this article, investors may be better off with a wait and watch mode.

The article Fundamentals Strong But Uncertain Global Outlook A Problem originally appeared on Fool.com and is written by Jacob Wolinsky.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.