BlackRock just pulled in record cash for a $1.9 trillion business

BlackRock CEO Larry Fink

Associated Press

BlackRock notched a record month in November for new investor cash into its massive exchange traded funds business, according to a new Morningstar report.

The world’s largest asset manager attracted $25.3 billion in net flows into its iShares ETFs last month, beating a previous record of $23.7 billion set in April 2017.

BlackRock dwarfed second-place Vanguard in November, which brought in $10.7 billion, according to Morningstar.

BlackRock is close to setting another record in December, with $31.2 billion in inflows so far in December into its passive funds business, according to Bloomberg data.

iShares, already the world’s biggest ETF provider, is a major growth area for BlackRock, as individual investors turn to cheaper, and often better-performing, passively managed investments over active strategies. The platform managed $1.9 trillion as of September 30, which represents 29% of the firm’s total assets under management. Gary Shedlin, the firm’s CFO, said earlier this month that iShares will expand above the firm’s 5% growth target.

See more: Investors are fleeing active funds in the worst month for managers in nearly 2 years

“The index investing industry has been growing rapidly, with ETFs as a major beneficiary, driven by the migration from commission-based to fee-based wealth management, clients’ focus on value for money, the use of ETFs as alpha tools and the growth of all-to-all trading in fixed income,” Shedlin said at a conference.

Overall, investors across the asset management industry exited actively managed stock funds in November at nearly the same rate as those entering passive funds. Active strategies saw $57.4 billion in outflows last month, while passive picked up $55.9 billion, Morningstar said.

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