BlackRock, world’s largest asset manager, loses record $1.7 trillion in one year

Wall Street giant BlackRock chalked up another record by losing the largest amount of client money by a single firm over a six-month period.

The largest asset manager in the world, BlackRock Inc. confirmed it suffered a loss of $1.7 trillion in the first half of 2022.

This is the other side of the coin, with the firm usually in the news for breaking records such as holding $10 trillion under management

In a time of rising oil prices and unbridled inflation, financial markets saw a carnage that saw widening losses for investors in crypto, NFTs and blue-chip stocks as well.

‘Investors are simultaneously navigating high inflation, rising rates and the worst start to the year for both stocks and bonds in half a century,’ said Chairman and CEO Larry Fink said on an earnings call.

‘Now an inverted yield curve has made cash not just a safe place, but now also a more profitable place for investors,’ explained Fink.

While BlackRock stems the bad tides, as the market turmoil continues, it still has an inflow investment of just under $90 billion from its clients.

BlackRock is picking up more than its fair share of ETFs, according to a Bloomberg report.

When bond markets froze owing to the COVID-19 pandemic, ETFs performed efficiently.

On his earnings call, Fink explained the benefits, observing that investors are using ETFs to quickly and efficiently gain exposure to thousands of global bonds and recalibrate their portfolios.

‘The challenges associated with high inflation to rising interest rates are attracting more first-time bond ETF users and prompting existing investors to find new ways to use ETFs in their portfolios,’ he said.

According to the Bloomberg report, if fixed-income follows the path of equities, the divergence between passive flows and active flows will only grow.

‘This is the early days of a major transformation of how people invest in fixed income,’ said Fink last week.

‘We expect the bond ETF industry will nearly triple and reach $5 trillion in AUM (Assets under management) at the end of the decade,’ Fink added.

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