BlackRock Inc, the world's largest money manager, said on Thursday its fourth-quarter profit rose 24 percent, bolstered by increased investor confidence in global stock markets.
New York-based BlackRock benefited doubly from strong global equity markets. The MSCI All-Country World Index gained 2.5 percent in the fourth quarter and 13.4 percent over the past year, increasing the value of BlackRock's asset base to a record $3.8 trillion, and encouraging investors to put more money to work in higher-fee stock funds.
Investors poured a total of $47 billion into BlackRock's long-term funds, including $31 billion into stocks, and $14 billion into money market funds and short-term products. Rising markets added $62 billion in value, helping total assets under management to increase 3 percent in the quarter and 8 percent from a year earlier.
And the trend toward stocks appeared to have accelerated into 2013. Investors added $7.5 billion into U.S.-based equity mutual funds last week, the biggest weekly inflow in 11 years, according to data from Lipper, a unit of Thomson Reuters .
Net income totaled $690 million, or $3.93 per share, in the fourth quarter, compared with $555 million, or $3.05 per share, a year earlier.
Analysts, on average, expected BlackRock to earn $3.73 per share, excluding certain items, according to Thomson Reuters I/B/E/S. On that basis, BlackRock earned $3.96.
Shares of BlackRock itself have been on a tear of late, gaining almost 20 percent since mid-November. The stock closed down $1.01, or 0.5 percent, to $222.24 on Wednesday on the New York Stock Exchange.
Still, BlackRock Chief Executive Laurence Fink warned there could be more turbulence ahead as the United States faces continued political fights over borrowing and spending.
"As we enter 2013, the improving global economy provides the potential for greater market stability," Fink said in a statement. "But it is likely that political and regulatory dynamics, persistent low rates and protracted periods of heightened volatility will remain key factors."
As the largest manager of ETFs, BlackRock also benefited from growing investor desire to use the low-cost, index-based funds instead of actively managed funds that have tended to underperform the market in recent years. Of the $47 billion added to BlackRock's long-term funds, almost $36 billion went into iShares.
BlackRock rolled out a new line of even cheaper "core" iShares ETFs in October to better compete with offerings from Vanguard Group and Charles Schwab Corp.