The world’s largest asset manager BlackRock has reported that it has beaten its third-quarter profit estimates. Although the third quarter of 2023 was profitable for the near-$10 trillion asset manager, the firm saw a sharp drop in net inflows.
According to LSEG (London Stock Exchange Group), BlackRock’s profit hit $10.91 per share, beating analyst’s estimates of $8.26. As per LSEG, high investment advisory fees helped the firm stay profitable. Moreover, revenue rose by 5% to $4.52 billion from a year earlier.
However, despite the rise in profit per share, net inflows fell to $2.57 billion from $16.9 billion last year. Moreover, the asset manager witnessed net outflows of $49 billion. The outflows stem from lower-fee institutional index equity strategies. Additionally, the company noted that one international client in particular was responsible for a whopping $19 billion outflow.
At the end of the last quarter, the firm had a total of $9.10 trillion in assets under management, up from $7.96 trillion a year earlier. However, the figure is still lower than the $9.4 trillion posted at the end of Q2 2023.
According to CEO Larry Fink, “For the first time in nearly two decades, clients are earning a real return in cash and can wait for more policy and market certainty before re-risking. This dynamic weighed on industry and BlackRock third quarter flows.”
Will the SEC approve BlackRock’s spot Bitcoin ETF?
BlackRock is one of the many firms that have applied for a spot Bitcoin ETF (Exchange-Traded Fund). Although the U.S. SEC (Securities and Exchange Commission) has postponed its decision once again, many anticipate that the financial watchdog will eventually approve the applications.
According to a former director of the firm, the SEC will approve the application within three to six months. Hence, if this comes to fruition, we should see a spot BTC ETF by early 2024. If approved, the ETF could fuel another bull run for not only Bitcoin (BTC), but the larger crypto market.