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benefited from investor flight to safety in the second quarter, with new business flowing towards fixed income and multi-asset classes and out of equity.

That may bode well for other asset managers that focus on bond funds and shun stocks.

The world's biggest money manager said investment fees grew 17% to $2.1 billion in the second quarter from the year-ago period, as assets under management increased both due to fresh inflows and market appreciation.

Long-term assets under management (AUM) increase by $34.1 billion to $3.279 trillion from the first quarter, including new business of $18.4 billion. The figures exclude $9.9 billion in withdrawals stemming from its takeover of

Barclays Global Investors


Fixed income AUMs rose $27.5 billion or 2% to close the quarter at $1.186 trillion. About $4.2 billion flowed into actively managed mandates offsetting an equal amount of net outflows out of index portfolios.

Multi-asset class AUM grew 11% to $23.3 billion to $231.3 billion at quarter-end, including net inflows of $20.7 billion, which the fund said reflected strong demand for fiduciary management services and asset allocation products.

Equity AUMs meanwhile declined 1% or $14.7 billion to $1.749 trillion. Inflows of $7.9 billion in index accounts were offset by $8.9 billion of net outflows.

Recent fund flow trends have shown a preference for non-traditional and fixed income asset classes at the expense of equity funds. Blackrock, which has had a stronghold in fixed income, has been able to take advantage of that trend.

According to Goldman Sachs analysts, the trends also bode well for

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Cohen & Steers

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which also report this week.

Blackrock reported an earnings per share of $3 per share, adjusted for items, on revenues of $2.34 billion. Analysts expected an EPS of $2.90 per share.

Shares were up 0.9% at $185.41 on Wednesday morning trading.

--Written by Shanthi Bharatwaj in New York

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Shanthi Bharatwaj


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