As most Wall Street banks flounder in 2020, BlackRock (NYSE: BLK) is surging.
The New York-based investment company reported an 18% increase in revenue and a 27% jump in net income in the third quarter, easily exceeding analysts’ forecasts.
BlackRock says it has a record of $7.81 trillion in assets under management, a 12% boost from last year. That includes $2.3 trillion under iShares, BlackRock’s popular exchange-traded funds.
Net inflows reached $127 billion, half of which came from Europe and Asia.
Shares of BlackRock soared 4% on Tuesday. JPMorgan Chase (NYSE: JPM) and CitiGroup (NYSE: C) also reported positive earnings today, but both stocks are down 1.4% and 4.4% respectively.
While BlackRock is up more than 26%, most the other major investment banks are stuck in the red. JPMorgan, for example, is down 25% year-to-date.
A Slient Crisis On the Horizon
While the economic impact from the pandemic has decimated traditional banks and other giants in the financial sector, BlackRock's ETFs give the firm an advantage. Investors are becoming more attracted to passively managed index funds, and BlackRock’s iShares fit the need perfectly.
During the earnings conference call, Chairman and CEO Larry Fink warned about “risk in the coming months” for investors, such as the election and the back-and-forth stimulus debates in Washington.
Fink also foretold about a “silent crisis” for older Americans on the verge of retirement, particularly with interest rates in the bond market being so low.
After the earnings call, Fink appeared on CNBC and sounded more optimistic about the market.
“We have a strong conviction that the average investor still is under-invested, and they’re going to have to be putting more and more money to work over the coming months and maybe even years,” Fink said.
Fink pinpointed the rise of more retail investors using online brokerages as a reason to be encouraged about future prospects.
“Across the board, the average investor is putting more and more money to work, which is a good outcome,” Fink said.