BlackRock Inc. saw its total assets under management fall by nearly $1 trillion amid one of the worst market sell-offs on record.
Investors rushed for the exits in the first quarter as concerns over the coronavirus outbreak finally manifested in global financial markets. The S&P 500 dropped more than 20% during the quarter, amid a marketwide retreat into what were deemed safer asset classes and into cash.
Assets under management at BlackRock, the world's largest money manager, tumbled during the quarter to $6.467 trillion. The company's AUM totaled $7.430 trillion at the end of 2019.
"The world is facing a challenge that is truly unprecedented in our lifetimes," Chairman and CEO Larry Fink said April 16 during an earnings call with analysts. "Our global markets were impacted by extreme volatility, liquidity receded and an oil price war exasperated stress. Swift actions by policymakers and several central banks represented the type of decisive responses that are needed to overcome this extreme market adversity. There has been tremendous monetary policy to stabilize financial markets, and we're beginning to see the type of fiscal policy that could stabilize our economies."
BlackRock's institutional clients led the retreat by pulling out $30.97 billion during the quarter. Retail investors added on with another $1.52 billion of their own withdrawals. Long-term funds suffered $18.66 billion in outflows.
The company still managed to bring in $34.99 billion of total net inflows during the quarter, though. The majority of those funds were put into cash management accounts, which saw $52.44 billion of net inflows. But BlackRock's exchange-traded fund business, iShares, proved to be a bright spot as well with $13.83 billion of net inflows. Equity ETFs accounted for the vast majority of those flows, bringing in $10.45 billion during the quarter. On the other hand, fixed-income ETFs saw $1.64 billion of new outflows.
"Through these challenging times, the strength and resilience of BlackRock's business model has become even more apparent than ever before," Fink said.