NEW YORK ( TheStreet) -- BlackRock (BLK - Get Report) may be poised for rising profits as smarter money enters the stock market, amid expectations that the Dow Jones Industrial Average and the S&P 500 will gain on record highs tested in March.
The key for BlackRock -- the world's biggest money manager -- is that as stock indexes test new highs, corporate earnings continue to rise and the likes of Warren Buffett characterize U.S. stock markets as the best place to invest, investors might simply choose to put their money into passively managed mutual funds and exchange traded funds that generally beat actively managed peers.
A majority of equity market inflows into funds that replicate the S&P 500 or more specialized indexes targeted at specific sectors, market caps or regions, may indicate the herd of money moving into equity markets in recent months isn't as dumb as some may think.
Were passive funds to remain popular with investors moving into rising stock markets, BlackRock may stand to benefit the most. That's because the firm has more than 60% of its client assets in passively managed funds, which grew client assets by 6%, according to a Tuesday client note by David Chiaverini, an analyst with BMO Capital Markets.
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