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Stock of the Week: BlackRock

9 trillion dollars generates a lot of interest.

Andrew Willis 1 November, 2021 | 4:38AM
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Andrew Willis: Ever wonder what investing in a fund company looks like? Taking the side of the house on investment accounts, and buying the fund itself?

Investing in the management fees business isn’t a bad idea. Especially when you have the AUM of the largest asset manager in the world – BlackRock (BLK). Imagine the organic growth on trillions in funds… and the scale of operations. At its core, BlackRock is a massive, passive investment shop – wielding such scale that it’s also able to offer very competitive active products.

Sector strategist Greggory Warren says that these days retail-advised and institutional clients are expected to seek out providers of passive products, as well as active asset managers that have greater scale, established brands, solid long-term performance, and reasonable fees. BlackRock has both sides of the investment business covered well.

Lastly, the asset-management business is conducive to economic moats. People don’t like switching funds that often, and once the money comes into the fund, it tends to stay there – and will likely contribute to the 8 billion in free cash flow we expect for years to come.

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
BlackRock Inc737.78 USD0.20Rating

About Author

Andrew Willis

Andrew Willis  Senior Editor at Morningstar.ca. Follow him on Twitter @AndrewWillisCDN.

 

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