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BlackRock hits record $6 trillion assets, helped by Trump tax law

Reuters  |  NEW YORK 

By Trevor Hunnicutt

(Reuters) - Inc charged past a record $6 trillion in assets, its profit beating forecasts, as investors flooded into the relatively low-cost of the world's largest

A new U.S. law, which sliced corporate and individual income rates, also helped the company's in the fourth quarter ended Dec. 31. said on Friday it saw a $1.2 billion benefit related to the and raised its quarterly cash by 15 percent.

"We've been winning more share of wallet," told

"Fees are really important and are becoming more important."

Fink said the reform was putting more in his clients' pockets, which they would need to invest, and that the increased cash could allow him to invest more in the company's future. He declined to identify such investments but said they were discussed at the company's board meeting.

The New York-based company's shares were up 2.8 percent at midday. Its shares have gained 47 percent over the last year, including dividends.

"Just when we thought, after the third-quarter report, things couldn't get better, it seems that they did," said Edward Woods, at Bahl & Gaynor Inc, which owns shares.

Strong economic growth, tame inflation and supportive government policies propped up assets in 2017, with most countries' equity markets recording gains, often at double-digit percentages.

has the largest lineup of exchange-traded (ETFs), many of which "passively" track segments of the market at a relatively low fee. Investors' embrace of those caught many of BlackRock's once-larger competitors flat-footed.

said its ETF business took in $54.8 billion in new in the quarter, up from $49.3 billion a year earlier. The $367 billion the company took in from investors in 2017 overall was a record, while assets under management expanded to $6.29 trillion.

"Our view is this acceleration - we saw 18 percent growth rate last year - we think something like that is going to continue for the next couple of years," said Jennifer Grancio, a at focused on the business.

Portfolio managers at who try to beat the market also posted a strong year, with 76 percent of the fund's actively managed assets in ranked in the top half of their Lipper category over three years as of November, according to

"As more flow into passive investing, active management should have better performance, and I think that's what we're experiencing," said Fink. "There is a need for passive, there is a need for active."

shareholders and analysts said they are keeping a close eye on how fast expenses are rising and fees are falling given the demand for

General and administration expenses for the quarter rose 26 percent in the quarter to $448 million, compared to the year-ago period. Meanwhile, earned an annualized $19.28 for every $10,000 it managed during the quarter, down from $19.51 the prior quarter, excluding cash-like money-market funds, according to Reuters' calculations.

Fink, whose succession plan has long been subject to speculation, said he has no intention to leave his post.

But he added that "we won't be here forever" and that the company had issued a one-time equity grant "to a small group of senior leaders" that will pay out over five to seven years and is "focused on ensuring the interest of the next-generation leaders, individuals who we believe will play critical roles in BlackRock's future."

BlackRock's net income surged to $2.3 billion, or $14.07 per share, from $851 million, or $5.13 per share, a year earlier.

The company said its effective rate would fall to 23 percent, from closer to 30 percent, which could boost its profitability 6 to 7 percent this year, according to

Excluding the benefit from the new law, earned $6.24 per share. Analysts on average expected the company to earn $6.02 per share, according to I/B/E/S.

(Reporting by Trevor Hunnicutt; Additional reporting by Diptendu Lahiri in Bengaluru; Editing by and Phil Berlowitz)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, January 12 2018. 22:57 IST