BlackRock expects “high growth rates” to take hold in the European ETF market, driven by an uptake in model portfolio services that have propelled the wrapper in the US.
Speaking on its full-year results call, Martin Small, chief financial officer at BlackRock, said the continent will play a bigger role in its organic base fee growth over time as ETFs continue to grow in the market.
It comes as European ETFs booked $158bn net inflows last year, its second highest on record and a 70% increase on 2022.
BlackRock netted $71bn net new assets in Europe in 2023, taking 43.7% of the total ETF inflows and the number one share of the European market.
“Europe is really well positioned and it will be a bigger part of our base fee growth story over time,” Small said.
“A lot of the long-term trends that propelled the US industry to high growth rates are taking hold in Europe. It is just the beginning.”
Of these trends, Fink noted the growth of fee-based advisory model portfolios beginning to take root in Europe “like in the US years ago”.
Globally, the world’s largest asset manager saw $186bn inflows into its iShares business in 2023, more than the entire European ETF market combined, resulting in a 6% organic asset growth led by $112bn inflows into fixed income ETFs.
It also accounted for well over half of the group’s $289bn inflows across its entire business in 2023.
The group is also betting big on the rise of retail investing in Europe and Fink previously noted the rise in Europe’s capital markets as being a big growth driver of ETFs.
Furthermore, BlackRock outlined plans to integrate ETFs and index funds across its entire business.
“We always viewed ETFs as a technology, a technology that facilitated investing,” Fink said.
“Embedding our ETF and index businesses across our entire firm will accelerate further growth of iShares and every investment strategy at BlackRock. We believe the ETF revolution will only continue."
On 11 January, the group became one of 11 issuers to launch a spot bitcoin ETF following a blanket approval from the Securities and Exchange Commission.
“BlackRock’s lead will only continue to accelerate as clients turn to Blackrock for ETFs as the preferred vehicle for investing in strategic and strategies of all types,” Fink said.
“If you can make an ETF for bitcoin, gosh, you could make an ETF for anything.”
It comes as BlackRock announced it would be cutting 3% of its workforce, roughly 600 jobs, earlier this week as it looks to refocus on growth areas including technology, private markets and ETFs. Fink said it expects headcount to remain flat in 2024.
