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.

 

Editor's Note: All images are courtesy of Unsplash.com and AP Images. 

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
BlackRock Inc840.50 USD-0.07Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar Canada. He previously produced content for Fidelity Investments and finance industry events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @Andrew_M_Willis.

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