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BlackRock(BLK - Get Report) has been enjoying some impressive performance of its own in 2012; shares of the $37 billion firm have rallied more than 15% this year, as the equity rally drove the firm's assets under management higher. But while market sentiment is shifting right now, investors don't need to be anxious about BLK's earnings ablity.
BlackRock weighs in as the largest asset manager in the world, with more than $3.5 trillion in AUM. Size carries some distinct advantages in the asset management business, and in BlackRock's case, scale is a major driver of the firm's deep double-digit net margins.
A major feather in BLK's cap is its asset allocation. Equities and fixed income assets are nearly evenly balanced right now, and while money markets are a bit under-represented in BLK's product mix, they also provide pretty underwhelming management fees. The firm's current positioning puts it in good shape to take "
flights to quality" in stride.
The biggest growth avenue for BlackRock right now is the retail space. BlackRock has traditionally been an institutional money manager, and its client list reflects that: Only around 25% of assets come from retail investors. As BLK grows its retail Rolodex, it should be able to attract more assets to its portfolio managers. Another is the introduction of alternative investment products (such as unique ETFs) that provide exposure that investors can't otherwise get easily.
BLK is set to post its first-quarter earnings on April 18.
BlackRock, one of
Blue Ridge Capital's holdings, shows up on a list of
Financial Stocks Bought and Sold by Hedge Funds in the most recently reported quarter.