State Street, BlackRock Earnings Reflect ETF Momentum

ETF provider Vanguard also tops Morningstar’s list of fund flow assets for March 2013

State Street (STT) and BlackRock (BLK), two of the largest ETF providers, released earnings this week that illustrate the continued momentum behind exchange-traded funds. Data from Morningstar for March 2013 showed strong flows to the two firms, along with very sizeable flows to ETF provider Vanguard.

State Street, which released its earnings Friday, has 120 SPDR-branded ETFs and 14 mutual funds in its product line.

In the first quarter, it earned $0.98 per share on $455 million of net income versus $0.85 per share on $417 million of net income in the year-ago period. Sales of $2.44 billion grew 1% from the first quarter of 2012.

Total assets under administration were $25.4 trillion as of March 31 vs. $23.3 trillion a year ago.

According to a presentation by State Street in March, the firm had $81 billion in net new assets in 2012, $41 billion of which were in ETFs. Of the $41 billion, $23 billion were in equity-focused products.

For its part, BlackRock—which markets iShares—had first quarter ’13 EPS of $3.62, up 15% from a year ago. Revenue increased 9% from the first quarter 2012.

Laurence Fink“Our $39.4 billion in long-dated net new business for the quarter is indicative of positive momentum across all client channels and was driven by the strategic themes we continue to focus on: ETFs, retirement, income, multi-asset-class products and alternatives,” said BlackRock CEO and Chairman Laurence D. Fink (left) in a press release.

According to its earnings presentation, iShares currently represents about 22% of BlackRock’s total assets under management, up from 20% a year ago. The ETFs bring in 35% of the company’s base fees—an increase from 31% a year earlier.

In related news, Morningstar said Friday that Vanguard had asset flows of $8.2 billion in March and $34 billion of flows in the first quarter of 2013. BlackRock had fund flows of $1.2 billion in March and $7.7 billion in the first quarter. These figures do not include ETFs, Morningstar says.

Morningstar estimates for U.S. ETF flows for Q1'13 show Vanguard hitting $19.7 billion in flows vs. $16.6 billion in the year-ago period. Blackrock's iShares had flows of $17.6 billion in Q1'13 vs. $12.8 billion in flows in Q1'12.

State Street, the marketer of the SPDR Gold ETF (GLD), which has fallen out of favor with investors along with the precious metal itself, saw its U.S. ETF outflows top $6.4 billion in Q1'13 vs. inflows of $9.4 billion a year ago. 

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