BlackRock Q3 ETF results show global split

BlackRock reports disappointing third quarter US ETF inflows but strong gains overall, despite a slowdown in activity in August and September.

It had US$10.8bn of net new business in its iShares ETF last quarter; $6.5bn of the inflows came from EMEA, $4.6bn from the Americas.

"We are not happy with our US results and we are addressing it," said Laurence D. Fink, chairman and CEO of BlackRock, while presenting the results.

He noted the recent appointment of Mark Weidman as global head of iShares and said that it is building its management team. "We believe we will once again re-assert our market share in the United States," he said.

Its European performance was strong, however: "we are as well positioned in Europe as we ever have been in the ETF space", says Fink.

He explained that "there is great amount of consternation and confusion in Europe related to ETNs, which are derivatives-based products" and some platforms are banning sales of ETNs, which has benefitted iShares' ETFs, he said.

"We believe in the US and Europe we will see significant regulatory review of these products."

Fink re-stated iShares goal to be assertive in making sure the risks of ETFs are understood.

He drew comparisons with some of the mortgage products, which were blamed for exacerbating the 2008 financial crisis: "As ETFs have grown - no different to what we saw in the mortgages market in the 80s and then in the 90s and in this decade - a single product morphs into something that was very complex and risks were contained in these products which maybe investors did not know."

He adds: "We are trying to take a very large position on making sure these products grow, this industry grows. I would like some of my peers to be as assertive as BlackRock in making sure we have a great industry and a great product going forward."

This message follows a vocal campaign for changes in the ETF and wider ETP market from BlackRock/iShares in recent weeks.