With more than $8 trillion under management, BlackRock (BLK) has become a gigantic asset manager thanks to its exchange-traded fund business, which accounts for 64% of its assets under management.
Since the announcement of its acquisition of Barclays’ (BCS) investment products division in June 2009, BLK stock has achieved a total return of 94%. That’s good, but it still trailed the SPDR S&P 500 (SPY) by 18 percentage points over the same period. Its performance should be stronger given its dominance.
With the future of asset managers clearly in the hands of ETFs, iShares’ formidable market share suggests that Larry Fink and company have more good years ahead. When it comes to large-cap asset managers I see BLK stock as your best bet in 2014.