Fundsters watching BlackRock in the wake of its acquisition of Barclays Global Investors may want to take a look at this morning's Wall Street Journal. The New York-based asset manager released its earnings yesterday morning, reporting adjusted earnings per diluted common share of $2.37 for the second quarter, beating analysts estimate projections (see The MFWire, 7/21/2010). Today, the WSJl reports that, despite that good news, BlackRock's shares dipped four percent yesterday to $143.33.

Why BlackRock's share price fall, despite the good news? The WSJ points to "outflows from its mutual funds," noting that BlackRock's AUM fell 6.3 percent during Q2 to $3.151 trillion on June 30. Yet it appears that BlackRock's net outflows were from institutional products and money market offerings.

BlackRock did report net outflows in its cash (i.e. money market) products, even as it brought in substantial long-term net inflows (including $12.9 billion net inflows for its mammoth ETF unit, iShares).

In addition, net new business of $28.4 billion in long-term products and advisory AUM were offset by $33.9 billion of concentration-related and active quantitative product outflows (collectively referred to herein as "merger-related"), and $24.9 billion of net redemptions in cash management ...

... Institutional investors were the source of all merger-related outflows, with more than 50 percent from clients in Asia Pacific, primarily Australia.

The big outflows at BlackRock, it seems, were "merger-related" and institutional, or money-market. 

Edited by: Neil Anderson, Managing Editor


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