BlackRock rides the political tide to attract more money than its rivals. | Jobs Vox


BlackRock received more money from US retail investors than its rivals in 2022.

BlackRock’s mutual funds and exchange-traded funds had positive retail inflows overall in nine of the 11 months and had net new inflows of $144 billion at the end of November, according to Morningstar data.

Vanguard, the second-largest asset manager, said its private equity clients added $22 billion in new cash over the same period. The broader industry had net outflows of $138 billion, and Fidelity experienced smaller outflows, Morningstar said.

BlackRock’s positive numbers come from its active and passive mix, with $152 billion in iShares index funds exiting $8 billion more than BlackRock’s brand funds. Morningstar calculates that for the first time since 2007, BlackRock is on track to raise more new retail funds than Vanguard.

The net gains continued even as Republican politicians stepped up their attacks on BlackRock for using it to invest in environmental, social and governance issues. Republican states have taken more than $3 billion from BlackRock, protesting the company’s hostility to fossil fuels, and North Carolina’s treasurer has called for founder Larry Fink to step down as CEO.

On Thursday, a group of Texas lawmakers criticized the companies’ efforts to reduce carbon emissions and avoid the risks associated with climate change, angering BlackRock’s chief executive officer.

State Sen. Brian Hughes specifically took issue with BlackRock’s decision to pick up its stake in Texas-based oil company ExxonMobil to replace three board directors with candidates chosen by the No. 1 activist hedge fund engine. “A big stake in Exxon is going to push them, harass them and vote against oil-and-gas exploration — vote against the energy that Americans and Texans want,” Hughes said.

Democratic politicians have slammed Fink and BlackRock for not doing enough to fight climate change, and a UK activist fund has called for its resignation, accusing it of “hypocrisy”.

The outflows come amid a dismal year for broader markets in which equity and bond prices have been falling, dragging down assets under management in the money management industry as a whole. BlackRock’s total AUM fell 20 percent to $8tn in the third quarter, and total mutual fund and ETF industry assets fell 17 percent to $28tn at the end of October, according to the Investment Company Institute.

Martin Small, head of BlackRock’s US wealth advisory business, said the fund manager benefited because the funds were only sold through financial advisers, not directly to retail clients.

“Our best strategy for a decade has been to be a complete portfolio provider and enable financial advisors to build the best portfolios,” Small said. “These are real relationships with the financial advisors we deal with directly. It’s not the first time they’ve seen coordinated campaigns against the financial services industry. They understand that tides ebb and flow.”

“Investors continue to use the low-cost index of choice for broad diversification exposure to the stock and bond markets,” Vanguard said in a statement.

“We are proud to help clients of all ages and stages of life meet their investment goals for retirement, college education, philanthropy, and more, and they are paying off,” Fidelity said.

“Despite the market downturn that has impacted our asset levels, Fidelity continues to experience customer growth and strong business results,” he said, adding that the number of retail accounts increased by 11 percent year-over-year.


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