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BLK Blackrock

Filed: 13 Oct 21, 7:50am

Exhibit 99.1

 

 

 

 

 

INVESTOR RELATIONS:

Caroline Rodda      212.810.3442

MEDIA RELATIONS:

Brian Beades      212.810.5596

 

 

 

 

BlackRock Reports Third Quarter 2021 Diluted EPS of $10.89, or $10.95 as adjusted

New York, October 13, 2021  –  BlackRock, Inc. (NYSE: BLK) today reported financial results for the three and nine months ended September 30, 2021.

$98 billion of long-term net inflows driven by continued momentum in ETFs and active strategies, with total net inflows of $75 billion reflecting outflows from low-fee cash management and advisory AUM

 

16% increase in revenue year-over-year reflects strong organic growth and 13% growth in technology services revenue, despite lower performance fees

 

10% increase in operating income (11% as adjusted) year-over-year also includes the impact of higher transaction-related expense and fund launch costs in the current quarter

 

23% increase in diluted EPS (19% as adjusted) year-over-year reflects higher nonoperating income, including noncash gains from strategic minority investments in the current quarter

 

Consistent capital management with $300 million of quarterly share repurchases

 

 

Laurence D. Fink, Chairman and CEO:

“Clients continue to seek BlackRock’s insights and advice regarding their entire portfolios, reflecting the benefits of the investments we have made to better serve their evolving needs. BlackRock generated $98 billion of long-term net inflows in the third quarter, representing 9% annualized organic base fee growth and our 6th consecutive quarter in excess of our 5% target, once again demonstrating the strength of our diversified investment and technology platform.

“Organic growth was broad-based, spanning our active platform as well as in each of our ETF product categories. We delivered our 10th consecutive quarter of active equity inflows and client demand for ESG remains strong, with $31 billion of inflows across our sustainable active and index strategies.

“Our long-term strategy remains centered on staying ahead of our clients’ needs and living our purpose of helping more and more people experience financial well-being. Whether through expanding investment choices, developing new retirement solutions, or enhancing our data analytics and technology capabilities, BlackRock remains committed to investing in high growth opportunities and industry-leading innovation.”

 

 

 

FINANCIAL RESULTS

 

Q3

 

 

Q3

 

(in millions, except per share data)

2021

 

 

2020

 

AUM

$

9,463,662

 

 

$

7,808,497

 

% change

 

21

%

 

 

 

 

Average AUM

$

9,578,753

 

 

$

7,678,147

 

% change

 

25

%

 

 

 

 

Total net flows

$

75,314

 

 

$

128,701

 

 

 

 

 

 

 

 

 

GAAP basis:

 

 

 

 

 

 

 

Revenue

$

5,050

 

 

$

4,369

 

% change

 

16

%

 

 

 

 

Operating income

$

1,935

 

 

$

1,757

 

% change

 

10

%

 

 

 

 

Operating margin

 

38.3

%

 

 

40.2

%

Net income(1)

$

1,681

 

 

$

1,364

 

% change

 

23

%

 

 

 

 

Diluted EPS

$

10.89

 

 

$

8.87

 

% change

 

23

%

 

 

 

 

Weighted-average diluted shares

 

154.3

 

 

 

153.7

 

% change

 

0

%

 

 

 

 

 

 

 

 

 

 

 

 

As Adjusted:

 

 

 

 

 

 

 

Operating income(2)

$

1,946

 

 

$

1,757

 

% change

 

11

%

 

 

 

 

Operating margin(2)

 

45.8

%

 

 

47.0

%

Net income(1) (2)

$

1,690

 

 

$

1,418

 

% change

 

19

%

 

 

 

 

Diluted EPS(2)

$

10.95

 

 

$

9.22

 

% change

 

19

%

 

 

 

 

(1)

Net income represents net income attributable to BlackRock, Inc.

(2)

See notes (1) through (3) to the condensed consolidated statements of income and supplemental information on pages 11 through 13 for more information on as adjusted items and the reconciliation to GAAP.

NET FLOW HIGHLIGHTS

 

 

 

Q3

YTD

(in billions)

2021

2021

Long-term net flows:

$

98

 

 

$

290

 

 

 

 

 

 

 

 

 

 

 

 

 

By region:

 

 

 

 

 

 

 

 

 

 

 

 

Americas

$

57

 

 

$

130

 

 

 

EMEA

 

14

 

 

 

114

 

 

 

APAC

 

27

 

 

 

46

 

 

 

 

 

 

 

 

 

 

 

 

 

By client type:

 

 

 

 

 

 

 

 

 

 

 

 

Retail:

$

23

 

 

$

81

 

 

 

 

US

 

13

 

 

 

46

 

 

 

 

International

 

10

 

 

 

35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ETFs:

$

58

 

 

$

202

 

 

 

 

Core equity

 

16

 

 

 

67

 

 

 

 

Strategic

 

33

 

 

 

89

 

 

 

 

Precision

 

9

 

 

 

46

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Institutional:

$

17

 

 

$

8

 

 

 

 

Active

 

26

 

 

 

86

 

 

 

 

Index

 

(8

)

 

 

(77

)

 

 

 

 

 

 

 

 

 

 

 

 

Cash management net flows

$

(12

)

 

$

50

 

 

 

 

 

 

 

 

 

 

 

 

 

Advisory net flows

$

(10

)

 

$

(13

)

 

 

 

 

 

 

 

 

 

 

 

 

Total net flows

$

75

 

 

$

328

 

 

 

 

 

 

 

 

1

 


 

 

BUSINESS RESULTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3 2021

 

 

 

 

 

 

 

 

 

Q3 2021

 

 

 

 

Base fees(1)

 

 

 

 

 

 

 

 

 

Base fees(1)

 

September 30, 2021

 

and securities

 

 

 

Q3 2021

 

September 30, 2021

 

and securities

 

AUM

 

lending revenue

 

 

(in millions), (unaudited)

Net flows

 

AUM

 

lending revenue

 

% of Total

 

% of Total

 

 

RESULTS BY CLIENT TYPE

Retail

$

22,672

 

$

1,000,627

 

$

1,291

 

 

11

%

 

33

%

 

ETFs

 

57,954

 

 

3,038,751

 

 

1,571

 

 

32

%

 

40

%

 

Institutional:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

 

25,558

 

 

1,638,545

 

 

684

 

 

17

%

 

17

%

 

Index

 

(8,212

)

 

3,063,692

 

 

286

 

 

32

%

 

7

%

 

Total institutional

 

17,346

 

 

4,702,237

 

 

970

 

 

49

%

 

24

%

 

Long-term

 

97,972

 

 

8,741,615

 

 

3,832

 

 

92

%

 

97

%

 

Cash management

 

(12,398

)

 

712,015

 

 

111

 

 

8

%

 

3

%

 

Advisory

 

(10,260

)

 

10,032

 

 

-

 

 

-

 

 

-

 

 

Total

$

75,314

 

$

9,463,662

 

$

3,943

 

 

100

%

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RESULTS BY INVESTMENT STYLE

Active

$

44,528

 

$

2,463,867

 

$

1,928

 

 

26

%

 

49

%

 

Index and ETFs

 

53,444

 

 

6,277,748

 

 

1,904

 

 

66

%

 

48

%

 

Long-term

 

97,972

 

 

8,741,615

 

 

3,832

 

 

92

%

 

97

%

 

Cash management

 

(12,398

)

 

712,015

 

 

111

 

 

8

%

 

3

%

 

Advisory

 

(10,260

)

 

10,032

 

 

-

 

 

-

 

 

-

 

 

Total

$

75,314

 

$

9,463,662

 

$

3,943

 

 

100

%

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RESULTS BY PRODUCT TYPE

Equity

$

33,168

 

$

4,998,410

 

$

2,093

 

 

52

%

 

53

%

 

Fixed income

 

27,315

 

 

2,713,899

 

 

986

 

 

29

%

 

25

%

 

Multi-asset

 

30,935

 

 

773,158

 

 

369

 

 

8

%

 

9

%

 

Alternatives

 

6,554

 

 

256,148

 

 

384

 

 

3

%

 

10

%

 

Long-term

 

97,972

 

 

8,741,615

 

 

3,832

 

 

92

%

 

97

%

 

Cash management

 

(12,398

)

 

712,015

 

 

111

 

 

8

%

 

3

%

 

Advisory

 

(10,260

)

 

10,032

 

 

-

 

 

-

 

 

-

 

 

Total

$

75,314

 

$

9,463,662

 

$

3,943

 

 

100

%

 

100

%

 

 

(1)

Base fees include investment advisory and administration fees.

INVESTMENT PERFORMANCE AT September 30, 2021(1)

 

 

One-year period

 

Three-year period

 

Five-year period

 

Fixed income:

 

 

 

 

 

 

 

 

 

Actively managed AUM above benchmark or peer median

 

 

 

 

 

 

 

 

 

Taxable

77%

 

84%

 

92%

 

Tax-exempt

76%

 

65%

 

81%

 

Index AUM within or above applicable tolerance

90%

 

92%

 

94%

 

Equity:

 

 

 

 

 

 

 

 

 

Actively managed AUM above benchmark or peer median

 

 

 

 

 

 

 

 

 

Fundamental

68%

 

85%

 

87%

 

Systematic

53%

 

53%

 

93%

 

Index AUM within or above applicable tolerance

95%

 

96%

 

98%

 

 

(1)

Past performance is not indicative of future results. The performance information shown is based on preliminary available data. Please refer to page 14 for performance disclosure detail.

TELECONFERENCE, WEBCAST AND PRESENTATION INFORMATION

Chairman and Chief Executive Officer, Laurence D. Fink, President, Robert S. Kapito, and Chief Financial Officer, Gary S. Shedlin, will host a teleconference call for investors and analysts on Wednesday, October 13, 2021 at 8:30 a.m. (Eastern Time). Members of the public who are interested in participating in the teleconference should dial, from the United States, (800) 374-0176, or from outside the United States, (706) 679-8281, shortly before 8:30 a.m. and reference the BlackRock Conference Call (ID Number 5162309). A live, listen-only webcast will also be available via the investor relations section of www.blackrock.com.

Both the teleconference and webcast will be available for replay by 11:30 a.m. (Eastern Time) on Wednesday, October 13, 2021 and ending at midnight on Wednesday, October 27, 2021. To access the replay of the teleconference, callers from the United States should dial (855) 859-2056 and callers from outside the United States should dial (404) 537-3406 and enter the Conference ID Number 5162309. To access the webcast, please visit the investor relations section of www.blackrock.com.

ABOUT BLACKROCK

BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit www.blackrock.com/corporate | Twitter: @blackrock | LinkedIn: www.linkedin.com/company/blackrock.

2

 


 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION

(in millions, except shares and per share data), (unaudited)

 

 

 

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

June 30,

 

 

 

 

 

 

2021

 

 

2020

 

 

Change

 

 

2021

 

 

Change

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment advisory, administration fees and

  securities lending revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment advisory and administration fees

$

3,791

 

 

$

3,072

 

 

$

719

 

 

$

3,617

 

 

$

174

 

Securities lending revenue

 

152

 

 

 

153

 

 

 

(1

)

 

 

140

 

 

 

12

 

Total Investment advisory, administration fees and

  securities lending revenue

 

3,943

 

 

 

3,225

 

 

 

718

 

 

 

3,757

 

 

 

186

 

Investment advisory performance fees

 

345

 

 

 

532

 

 

 

(187

)

 

 

340

 

 

 

5

 

Technology services revenue

 

320

 

 

 

282

 

 

 

38

 

 

 

316

 

 

 

4

 

Distribution fees

 

401

 

 

 

288

 

 

 

113

 

 

 

369

 

 

 

32

 

Advisory and other revenue

 

41

 

 

 

42

 

 

 

(1

)

 

 

38

 

 

 

3

 

Total revenue

 

5,050

 

 

 

4,369

 

 

 

681

 

 

 

4,820

 

 

 

230

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

1,527

 

 

 

1,411

 

 

 

116

 

 

 

1,548

 

 

 

(21

)

Distribution and servicing costs

 

585

 

 

 

456

 

 

 

129

 

 

 

523

 

 

 

62

 

Direct fund expense

 

354

 

 

 

257

 

 

 

97

 

 

 

320

 

 

 

34

 

General and administration expense

 

611

 

 

 

461

 

 

 

150

 

 

 

461

 

��

 

150

 

Amortization of intangible assets

 

38

 

 

 

27

 

 

 

11

 

 

 

37

 

 

 

1

 

Total expense

 

3,115

 

 

 

2,612

 

 

 

503

 

 

 

2,889

 

 

 

226

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

1,935

 

 

 

1,757

 

 

 

178

 

 

 

1,931

 

 

 

4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonoperating income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gain (loss) on investments

 

370

 

 

 

269

 

 

 

101

 

 

 

314

 

 

 

56

 

Interest and dividend income

 

14

 

 

 

9

 

 

 

5

 

 

 

8

 

 

 

6

 

Interest expense

 

(48

)

 

 

(54

)

 

 

6

 

 

 

(52

)

 

 

4

 

Total nonoperating income (expense)

 

336

 

 

 

224

 

 

 

112

 

 

 

270

 

 

 

66

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

2,271

 

 

 

1,981

 

 

 

290

 

 

 

2,201

 

 

 

70

 

Income tax expense

 

518

 

 

 

464

 

 

 

54

 

 

 

654

 

 

 

(136

)

Net income

 

1,753

 

 

 

1,517

 

 

 

236

 

 

 

1,547

 

 

 

206

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to noncontrolling

  interests

 

72

 

 

 

153

 

 

 

(81

)

 

 

169

 

 

 

(97

)

Net income attributable to BlackRock, Inc.

$

1,681

 

 

$

1,364

 

 

$

317

 

 

$

1,378

 

 

$

303

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

152,120,927

 

 

 

152,488,073

 

 

 

(367,146

)

 

 

152,443,039

 

 

 

(322,112

)

Diluted

 

154,343,277

 

 

 

153,742,264

 

 

 

601,013

 

 

 

154,417,581

 

 

 

(74,304

)

Earnings per share attributable to BlackRock, Inc.

   common stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

11.05

 

 

$

8.94

 

 

$

2.11

 

 

$

9.04

 

 

$

2.01

 

Diluted

$

10.89

 

 

$

8.87

 

 

$

2.02

 

 

$

8.92

 

 

$

1.97

 

Cash dividends declared and paid per share

$

4.13

 

 

$

3.63

 

 

$

0.50

 

 

$

4.13

 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AUM (end of period)

$

9,463,662

 

 

$

7,808,497

 

 

$

1,655,165

 

 

$

9,495,993

 

 

$

(32,331

)

Shares outstanding (end of period)

 

151,988,234

 

 

 

152,496,403

 

 

 

(508,169

)

 

 

152,298,784

 

 

 

(310,550

)

GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin

 

38.3

%

 

 

40.2

%

 

 

(190

) bps

 

 

40.1

%

 

 

(180

) bps

Effective tax rate

 

23.6

%

 

 

25.4

%

 

 

(180

) bps

 

 

32.2

%

 

 

(860

) bps

As adjusted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (1)

$

1,946

 

 

$

1,757

 

 

$

189

 

 

$

1,931

 

 

$

15

 

Operating margin (1)

 

45.8

%

 

 

47.0

%

 

 

(120

) bps

 

 

44.9

%

 

 

90

  bps

Nonoperating income (expense), less net income

     (loss) attributable to noncontrolling interests (2)

$

264

 

 

$

71

 

 

$

193

 

 

$

101

 

 

$

163

 

Net income attributable to BlackRock, Inc. (3)

$

1,690

 

 

$

1,418

 

 

$

272

 

 

$

1,549

 

 

$

141

 

Diluted earnings attributable to BlackRock, Inc.

     common stockholders per share (3)

$

10.95

 

 

$

9.22

 

 

$

1.73

 

 

$

10.03

 

 

$

0.92

 

Effective tax rate

 

23.6

%

 

 

22.5

%

 

 

110

  bps

 

 

23.8

%

 

 

(20

) bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See pages 11-13 for the reconciliation to GAAP and notes (1) through (3) for more information on as adjusted items.

 

 

 

 

 

 

 

 

3

 


 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION

(in millions, except shares and per share data), (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

2021

 

 

2020

 

 

Change

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

Investment advisory, administration fees and

  securities lending revenue:

 

 

 

 

 

 

 

 

 

 

 

Investment advisory and administration fees

$

10,873

 

 

$

8,725

 

 

$

2,148

 

Securities lending revenue

 

419

 

 

 

521

 

 

 

(102

)

Total Investment advisory, administration fees and

  securities lending revenue

 

11,292

 

 

 

9,246

 

 

 

2,046

 

Investment advisory performance fees

 

814

 

 

 

685

 

 

 

129

 

Technology services revenue

 

942

 

 

 

834

 

 

 

108

 

Distribution fees

 

1,110

 

 

 

817

 

 

 

293

 

Advisory and other revenue

 

110

 

 

 

145

 

 

 

(35

)

Total revenue

 

14,268

 

 

 

11,727

 

 

 

2,541

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

4,484

 

 

 

3,700

 

 

 

784

 

Distribution and servicing costs

 

1,613

 

 

 

1,330

 

 

 

283

 

Direct fund expense

 

994

 

 

 

780

 

 

 

214

 

General and administration expense

 

1,657

 

 

 

1,991

 

 

 

(334

)

Amortization of intangible assets

 

109

 

 

 

79

 

 

 

30

 

Total expense

 

8,857

 

 

 

7,880

 

 

 

977

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

5,411

 

 

 

3,847

 

 

 

1,564

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonoperating income (expense)

 

 

 

 

 

 

 

 

 

 

 

Net gain (loss) on investments

 

766

 

 

 

627

 

 

 

139

 

Interest and dividend income

 

41

 

 

 

34

 

 

 

7

 

Interest expense

 

(155

)

 

 

(151

)

 

 

(4

)

Total nonoperating income (expense)

 

652

 

 

 

510

 

 

 

142

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

6,063

 

 

 

4,357

 

 

 

1,706

 

Income tax expense

 

1,490

 

 

 

811

 

 

 

679

 

Net income

 

4,573

 

 

 

3,546

 

 

 

1,027

 

Less:

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to noncontrolling

  interests

 

315

 

 

 

162

 

 

 

153

 

Net income attributable to BlackRock, Inc.

$

4,258

 

 

$

3,384

 

 

$

874

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

Basic

 

152,375,504

 

 

 

153,816,544

 

 

 

(1,441,040

)

Diluted

 

154,352,590

 

 

 

154,959,812

 

 

 

(607,222

)

Earnings per share attributable to BlackRock, Inc.

   common stockholders

 

 

 

 

 

 

 

 

 

 

 

Basic

$

27.94

 

 

$

22.00

 

 

$

5.94

 

Diluted

$

27.59

 

 

$

21.84

 

 

$

5.75

 

Cash dividends declared and paid per share

$

12.39

 

 

$

10.89

 

 

$

1.50

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AUM (end of period)

$

9,463,662

 

 

$

7,808,497

 

 

$

1,655,165

 

Shares outstanding (end of period)

 

151,988,234

 

 

 

152,496,403

 

 

 

(508,169

)

GAAP:

 

 

 

 

 

 

 

 

 

 

 

Operating margin

 

37.9

%

 

 

32.8

%

 

 

510

bps

Effective tax rate

 

25.9

%

 

 

19.3

%

 

 

660

bps

As adjusted:

 

 

 

 

 

 

 

 

 

 

 

Operating income (1)

$

5,422

 

 

$

4,436

 

 

$

986

 

Operating margin (1)

 

45.1

%

 

 

44.3

%

 

 

80

bps

Nonoperating income (expense), less net income

     (loss) attributable to noncontrolling interests (2)

$

337

 

 

$

226

 

 

$

111

 

Net income attributable to BlackRock, Inc. (3)

$

4,438

 

 

$

3,664

 

 

$

774

 

Diluted earnings attributable to BlackRock, Inc.

     common stockholders per share (3)

$

28.75

 

 

$

23.64

 

 

$

5.11

 

Effective tax rate

 

22.9

%

 

 

21.4

%

 

 

150

bps

 

 

 

 

 

 

 

 

 

 

 

 

See pages 11-13 for the reconciliation to GAAP and notes (1) through (3) for more information on as adjusted items.

 

4

 


 

 

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)

 

Current Quarter Component Changes by Client Type and Product Type

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

inflows

 

 

Market

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

2021

 

 

(outflows)

 

 

change

 

 

FX impact(1)

 

 

2021

 

 

Average AUM(2)

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

446,327

 

 

$

9,952

 

 

$

(7,823

)

 

$

(2,719

)

 

$

445,737

 

 

$

452,433

 

Fixed income

 

359,480

 

 

 

4,524

 

 

 

(3,156

)

 

 

(1,687

)

 

 

359,161

 

 

 

361,730

 

Multi-asset

 

147,228

 

 

 

5,395

 

 

 

(1,332

)

 

 

(338

)

 

 

150,953

 

 

 

150,409

 

Alternatives

 

42,448

 

 

 

2,801

 

 

 

(318

)

 

 

(155

)

 

 

44,776

 

 

 

43,690

 

Retail subtotal

 

995,483

 

 

 

22,672

 

 

 

(12,629

)

 

 

(4,899

)

 

 

1,000,627

 

 

 

1,008,262

 

ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,257,828

 

 

 

34,987

 

 

 

(36,247

)

 

 

(5,719

)

 

 

2,250,849

 

 

 

2,279,480

 

Fixed income

 

700,009

 

 

 

22,489

 

 

 

(3,494

)

 

 

(2,408

)

 

 

716,596

 

 

 

711,729

 

Multi-asset

 

7,663

 

 

 

593

 

 

 

(70

)

 

 

(36

)

 

 

8,150

 

 

 

7,954

 

Alternatives

 

66,005

 

 

 

(115

)

 

 

(2,688

)

 

 

(46

)

 

 

63,156

 

 

 

65,863

 

ETFs subtotal

 

3,031,505

 

 

 

57,954

 

 

 

(42,499

)

 

 

(8,209

)

 

 

3,038,751

 

 

 

3,065,026

 

Institutional:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

184,174

 

 

 

1,930

 

 

 

(2,410

)

 

 

(1,462

)

 

 

182,232

 

 

 

185,208

 

Fixed income

 

716,671

 

 

 

(5,716

)

 

 

806

 

 

 

(3,063

)

 

 

708,698

 

 

 

718,139

 

Multi-asset

 

584,582

 

 

 

25,477

 

 

 

920

 

 

 

(5,682

)

 

 

605,297

 

 

 

604,848

 

Alternatives

 

138,622

 

 

 

3,867

 

 

 

560

 

 

 

(731

)

 

 

142,318

 

 

 

140,894

 

Active subtotal

 

1,624,049

 

 

 

25,558

 

 

 

(124

)

 

 

(10,938

)

 

 

1,638,545

 

 

 

1,649,089

 

Index:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,146,062

 

 

 

(13,701

)

 

 

(114

)

 

 

(12,655

)

 

 

2,119,592

 

 

 

2,158,274

 

Fixed income

 

936,005

 

 

 

6,018

 

 

 

139

 

 

 

(12,718

)

 

 

929,444

 

 

 

947,359

 

Multi-asset

 

9,297

 

 

 

(530

)

 

 

19

 

 

 

(28

)

 

 

8,758

 

 

 

9,095

 

Alternatives

 

5,709

 

 

 

1

 

 

 

222

 

 

 

(34

)

 

 

5,898

 

 

 

5,796

 

Index subtotal

 

3,097,073

 

 

 

(8,212

)

 

 

266

 

 

 

(25,435

)

 

 

3,063,692

 

 

 

3,120,524

 

Institutional subtotal

 

4,721,122

 

 

 

17,346

 

 

 

142

 

 

 

(36,373

)

 

 

4,702,237

 

 

 

4,769,613

 

Long-term

 

8,748,110

 

 

 

97,972

 

 

 

(54,986

)

 

 

(49,481

)

 

 

8,741,615

 

 

 

8,842,901

 

Cash management

 

727,603

 

 

 

(12,398

)

 

 

(784

)

 

 

(2,406

)

 

 

712,015

 

 

 

722,103

 

Advisory(3)

 

20,280

 

 

 

(10,260

)

 

 

23

 

 

 

(11

)

 

 

10,032

 

 

 

13,749

 

Total

$

9,495,993

 

 

$

75,314

 

 

$

(55,747

)

 

$

(51,898

)

 

$

9,463,662

 

 

$

9,578,753

 

Current Quarter Component Changes by Investment Style and Product Type (Long-Term)

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

inflows

 

 

Market

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

2021

 

 

(outflows)

 

 

change

 

 

FX impact(1)

 

 

2021

 

 

Average AUM(2)

 

Active:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

479,240

 

 

$

9,651

 

 

$

(10,660

)

 

$

(2,999

)

 

$

475,232

 

 

$

483,441

 

Fixed income

 

1,054,517

 

 

 

(2,662

)

 

 

(2,217

)

 

 

(4,341

)

 

 

1,045,297

 

 

 

1,057,426

 

Multi-asset

 

731,806

 

 

 

30,870

 

 

 

(411

)

 

 

(6,020

)

 

 

756,245

 

 

 

755,251

 

Alternatives

 

181,069

 

 

 

6,669

 

 

 

241

 

 

 

(886

)

 

 

187,093

 

 

 

184,583

 

Active subtotal

 

2,446,632

 

 

 

44,528

 

 

 

(13,047

)

 

 

(14,246

)

 

 

2,463,867

 

 

 

2,480,701

 

Index and ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,257,828

 

 

 

34,987

 

 

 

(36,247

)

 

 

(5,719

)

 

 

2,250,849

 

 

 

2,279,480

 

Fixed income

 

700,009

 

 

 

22,489

 

 

 

(3,494

)

 

 

(2,408

)

 

 

716,596

 

 

 

711,729

 

Multi-asset

 

7,663

 

 

 

593

 

 

 

(70

)

 

 

(36

)

 

 

8,150

 

 

 

7,954

 

Alternatives

 

66,005

 

 

 

(115

)

 

 

(2,688

)

 

 

(46

)

 

 

63,156

 

 

 

65,863

 

ETFs subtotal

 

3,031,505

 

 

 

57,954

 

 

 

(42,499

)

 

 

(8,209

)

 

 

3,038,751

 

 

 

3,065,026

 

Non-ETF Index:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,297,323

 

 

 

(11,470

)

 

 

313

 

 

 

(13,837

)

 

 

2,272,329

 

 

 

2,312,474

 

Fixed income

 

957,639

 

 

 

7,488

 

 

 

6

 

 

 

(13,127

)

 

 

952,006

 

 

 

969,802

 

Multi-asset

 

9,301

 

 

 

(528

)

 

 

18

 

 

 

(28

)

 

 

8,763

 

 

 

9,101

 

Alternatives

 

5,710

 

 

 

-

 

 

 

223

 

 

 

(34

)

 

 

5,899

 

 

 

5,797

 

Non-ETF Index subtotal

 

3,269,973

 

 

 

(4,510

)

 

 

560

 

 

 

(27,026

)

 

 

3,238,997

 

 

 

3,297,174

 

Index and ETFs subtotal

 

6,301,478

 

 

 

53,444

 

 

 

(41,939

)

 

 

(35,235

)

 

 

6,277,748

 

 

 

6,362,200

 

Long-term

$

8,748,110

 

 

$

97,972

 

 

$

(54,986

)

 

$

(49,481

)

 

$

8,741,615

 

 

$

8,842,901

 

Current Quarter Component Changes by Product Type (Long-Term)

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

inflows

 

 

Market

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

2021

 

 

(outflows)

 

 

change

 

 

FX impact(1)

 

 

2021

 

 

Average AUM(2)

 

Equity

$

5,034,391

 

 

$

33,168

 

 

$

(46,594

)

 

$

(22,555

)

 

$

4,998,410

 

 

$

5,075,395

 

Fixed income

 

2,712,165

 

 

 

27,315

 

 

 

(5,705

)

 

 

(19,876

)

 

 

2,713,899

 

 

 

2,738,957

 

Multi-asset

 

748,770

 

 

 

30,935

 

 

 

(463

)

 

 

(6,084

)

 

 

773,158

 

 

 

772,306

 

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

95,961

 

 

 

2,743

 

 

 

195

 

 

 

(578

)

 

 

98,321

 

 

 

97,516

 

Liquid alternatives

 

81,560

 

 

 

3,782

 

 

 

9

 

 

 

(299

)

 

 

85,052

 

 

 

83,431

 

Currency and commodities(4)

 

75,263

 

 

 

29

 

 

 

(2,428

)

 

 

(89

)

 

 

72,775

 

 

 

75,296

 

Alternatives subtotal

 

252,784

 

 

 

6,554

 

 

 

(2,224

)

 

 

(966

)

 

 

256,148

 

 

 

256,243

 

Long-term

$

8,748,110

 

 

$

97,972

 

 

$

(54,986

)

 

$

(49,481

)

 

$

8,741,615

 

 

$

8,842,901

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US dollars for reporting purposes.

(2)

Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing four months.

(3)

Advisory AUM represents mandates linked to purchases and disposition of assets and portfolios on behalf of official institutions and long-term portfolio liquidation assignments.

(4)

Amounts include commodity ETFs.

 

5

 


 

 

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)

Year-to-Date Component Changes by Client Type and Product Type

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

inflows

 

 

 

 

 

 

Market

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

2020

 

 

(outflows)

 

 

Acquisition(1)

 

 

change

 

 

FX impact(2)

 

 

2021

 

 

Average AUM(3)

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

338,434

 

 

$

34,153

 

 

$

41,324

 

 

$

35,459

 

 

$

(3,633

)

 

$

445,737

 

 

$

417,230

 

Fixed income

 

340,468

 

 

 

26,011

 

 

 

-

 

 

 

(4,457

)

 

 

(2,861

)

 

 

359,161

 

 

 

354,337

 

Multi-asset

 

132,624

 

 

 

10,269

 

 

 

-

 

 

 

8,505

 

 

 

(445

)

 

 

150,953

 

 

 

143,345

 

Alternatives

 

34,391

 

 

 

10,139

 

 

 

-

 

 

 

468

 

 

 

(222

)

 

 

44,776

 

 

 

39,976

 

Retail subtotal

 

845,917

 

 

 

80,572

 

 

 

41,324

 

 

 

39,975

 

 

 

(7,161

)

 

 

1,000,627

 

 

 

954,888

 

ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

1,905,101

 

 

 

152,785

 

 

 

-

 

 

 

202,397

 

 

 

(9,434

)

 

 

2,250,849

 

 

 

2,142,649

 

Fixed income

 

690,033

 

 

 

45,804

 

 

 

-

 

 

 

(14,826

)

 

 

(4,415

)

 

 

716,596

 

 

 

694,541

 

Multi-asset

 

6,268

 

 

 

1,539

 

 

 

-

 

 

 

349

 

 

 

(6

)

 

 

8,150

 

 

 

7,279

 

Alternatives

 

67,605

 

 

 

1,463

 

 

 

-

 

 

 

(5,837

)

 

 

(75

)

 

 

63,156

 

 

 

66,272

 

ETFs subtotal

 

2,669,007

 

 

 

201,591

 

 

 

-

 

 

 

182,083

 

 

 

(13,930

)

 

 

3,038,751

 

 

 

2,910,741

 

Institutional:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

169,522

 

 

 

(1,561

)

 

 

-

 

 

 

16,555

 

 

 

(2,284

)

 

 

182,232

 

 

 

179,247

 

Fixed income

 

716,269

 

 

 

5,606

 

 

 

-

 

 

 

(7,030

)

 

 

(6,147

)

 

 

708,698

 

 

 

710,668

 

Multi-asset

 

511,242

 

 

 

69,106

 

 

 

-

 

 

 

33,655

 

 

 

(8,706

)

 

 

605,297

 

 

 

556,569

 

Alternatives

 

127,429

 

 

 

12,407

 

 

 

-

 

 

 

3,682

 

 

 

(1,200

)

 

 

142,318

 

 

 

135,656

 

Active subtotal

 

1,524,462

 

 

 

85,558

 

 

 

-

 

 

 

46,862

 

 

 

(18,337

)

 

 

1,638,545

 

 

 

1,582,140

 

Index:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,006,749

 

 

 

(128,801

)

 

 

-

 

 

 

264,183

 

 

 

(22,539

)

 

 

2,119,592

 

 

 

2,101,940

 

Fixed income

 

927,718

 

 

 

52,024

 

 

 

-

 

 

 

(25,447

)

 

 

(24,851

)

 

 

929,444

 

 

 

933,212

 

Multi-asset

 

8,599

 

 

 

(90

)

 

 

-

 

 

 

517

 

 

 

(268

)

 

 

8,758

 

 

 

8,919

 

Alternatives

 

5,617

 

 

 

(538

)

 

 

-

 

 

 

908

 

 

 

(89

)

 

 

5,898

 

 

 

5,680

 

Index subtotal

 

2,948,683

 

 

 

(77,405

)

 

 

-

 

 

 

240,161

 

 

 

(47,747

)

 

 

3,063,692

 

 

 

3,049,751

 

Institutional subtotal

 

4,473,145

 

 

 

8,153

 

 

 

-

 

 

 

287,023

 

 

 

(66,084

)

 

 

4,702,237

 

 

 

4,631,891

 

Long-term

 

7,988,069

 

 

 

290,316

 

 

 

41,324

 

 

 

509,081

 

 

 

(87,175

)

 

 

8,741,615

 

 

 

8,497,520

 

Cash management

 

666,252

 

 

 

50,132

 

 

 

-

 

 

 

(996

)

 

 

(3,373

)

 

 

712,015

 

 

 

704,580

 

Advisory(4)

 

22,359

 

 

 

(12,530

)

 

 

-

 

 

 

200

 

 

 

3

 

 

 

10,032

 

 

 

18,838

 

Total

$

8,676,680

 

 

$

327,918

 

 

$

41,324

 

 

$

508,285

 

 

$

(90,545

)

 

$

9,463,662

 

 

$

9,220,938

 

Year-to-Date Component Changes by Investment Style and Product Type (Long-Term)

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

inflows

 

 

 

 

 

 

Market

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

2020

 

 

(outflows)

 

 

Acquisition(1)

 

 

change

 

 

FX impact(2)

 

 

2021

 

 

Average AUM(3)

 

Active:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

410,189

 

 

$

34,854

 

 

$

-

 

 

$

34,944

 

 

$

(4,755

)

 

$

475,232

 

 

$

457,458

 

Fixed income

 

1,035,015

 

 

 

29,461

 

 

 

-

 

 

 

(10,534

)

 

 

(8,645

)

 

 

1,045,297

 

 

 

1,043,135

 

Multi-asset

 

643,864

 

 

 

79,374

 

 

 

-

 

 

 

42,158

 

 

 

(9,151

)

 

 

756,245

 

 

 

699,909

 

Alternatives

 

161,819

 

 

 

22,544

 

 

 

-

 

 

 

4,153

 

 

 

(1,423

)

 

 

187,093

 

 

 

175,631

 

Active subtotal

 

2,250,887

 

 

 

166,233

 

 

 

-

 

 

 

70,721

 

 

 

(23,974

)

 

 

2,463,867

 

 

 

2,376,133

 

Index and ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

1,905,101

 

 

 

152,785

 

 

 

-

 

 

 

202,397

 

 

 

(9,434

)

 

 

2,250,849

 

 

 

2,142,649

 

Fixed income

 

690,033

 

 

 

45,804

 

 

 

-

 

 

 

(14,826

)

 

 

(4,415

)

 

 

716,596

 

 

 

694,541

 

Multi-asset

 

6,268

 

 

 

1,539

 

 

 

-

 

 

 

349

 

 

 

(6

)

 

 

8,150

 

 

 

7,279

 

Alternatives

 

67,605

 

 

 

1,463

 

 

 

-

 

 

 

(5,837

)

 

 

(75

)

 

 

63,156

 

 

 

66,272

 

ETFs subtotal

 

2,669,007

 

 

 

201,591

 

 

 

-

 

 

 

182,083

 

 

 

(13,930

)

 

 

3,038,751

 

 

 

2,910,741

 

Non-ETF Index:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,104,516

 

 

 

(131,063

)

 

 

41,324

 

 

 

281,253

 

 

 

(23,701

)

 

 

2,272,329

 

 

 

2,240,959

 

Fixed income

 

949,440

 

 

 

54,180

 

 

 

-

 

 

 

(26,400

)

 

 

(25,214

)

 

 

952,006

 

 

 

955,082

 

Multi-asset

 

8,601

 

 

 

(89

)

 

 

-

 

 

 

519

 

 

 

(268

)

 

 

8,763

 

 

 

8,924

 

Alternatives

 

5,618

 

 

 

(536

)

 

 

-

 

 

 

905

 

 

 

(88

)

 

 

5,899

 

 

 

5,681

 

Non-ETF Index subtotal

 

3,068,175

 

 

 

(77,508

)

 

 

41,324

 

 

 

256,277

 

 

 

(49,271

)

 

 

3,238,997

 

 

 

3,210,646

 

Index and ETFs subtotal

 

5,737,182

 

 

 

124,083

 

 

 

41,324

 

 

 

438,360

 

 

 

(63,201

)

 

 

6,277,748

 

 

 

6,121,387

 

Long-term

$

7,988,069

 

 

$

290,316

 

 

$

41,324

 

 

$

509,081

 

 

$

(87,175

)

 

$

8,741,615

 

 

$

8,497,520

 

Year-to-Date Component Changes by Product Type (Long-Term)

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

inflows

 

 

 

 

 

 

Market

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

2020

 

 

(outflows)

 

 

Acquisition(1)

 

 

change

 

 

FX impact(2)

 

 

2021

 

 

Average AUM(3)

 

Equity

$

4,419,806

 

 

$

56,576

 

 

$

41,324

 

 

$

518,594

 

 

$

(37,890

)

 

$

4,998,410

 

 

$

4,841,066

 

Fixed income

 

2,674,488

 

 

 

129,445

 

 

 

-

 

 

 

(51,760

)

 

 

(38,274

)

 

 

2,713,899

 

 

 

2,692,758

 

Multi-asset

 

658,733

 

 

 

80,824

 

 

 

-

 

 

 

43,026

 

 

 

(9,425

)

 

 

773,158

 

 

 

716,112

 

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

85,770

 

 

 

12,315

 

 

 

-

 

 

 

1,148

 

 

 

(912

)

 

 

98,321

 

 

 

93,102

 

Liquid alternatives

 

73,218

 

 

 

9,455

 

 

 

-

 

 

 

2,745

 

 

 

(366

)

 

 

85,052

 

 

 

79,234

 

Currency and commodities(5)

 

76,054

 

 

 

1,701

 

 

 

-

 

 

 

(4,672

)

 

 

(308

)

 

 

72,775

 

 

 

75,248

 

Alternatives subtotal

 

235,042

 

 

 

23,471

 

 

 

-

 

 

 

(779

)

 

 

(1,586

)

 

 

256,148

 

 

 

247,584

 

Long-term

$

7,988,069

 

 

$

290,316

 

 

$

41,324

 

 

$

509,081

 

 

$

(87,175

)

 

$

8,741,615

 

 

$

8,497,520

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Amounts include AUM attributable to the acquisition of Aperio Group, LLC on February 1, 2021 (the “Aperio Transaction”).

(2)

Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US dollars for reporting purposes.

(3)

Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing ten months.

(4)

Advisory AUM represents mandates linked to purchases and disposition of assets and portfolios on behalf of official institutions and long-term portfolio liquidation assignments.

(5)

Amounts include commodity ETFs.

 

6

 


 

 

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)

Year-over-Year Component Changes by Client Type and Product Type

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

inflows

 

 

 

 

 

 

Market

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

2020

 

 

(outflows)

 

 

Acquisition(1)

 

 

change

 

 

FX impact(2)

 

 

2021

 

 

Average AUM(3)

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

279,427

 

 

$

50,248

 

 

$

41,324

 

 

$

73,968

 

 

$

770

 

 

$

445,737

 

 

$

387,825

 

Fixed income

 

316,008

 

 

 

40,231

 

 

 

-

 

 

 

2,060

 

 

 

862

 

 

 

359,161

 

 

 

347,052

 

Multi-asset

 

119,708

 

 

 

12,914

 

 

 

-

 

 

 

18,198

 

 

 

133

 

 

 

150,953

 

 

 

138,466

 

Alternatives

 

31,121

 

 

 

12,496

 

 

 

-

 

 

 

1,081

 

 

 

78

 

 

 

44,776

 

 

 

38,183

 

Retail subtotal

 

746,264

 

 

 

115,889

 

 

 

41,324

 

 

 

95,307

 

 

 

1,843

 

 

 

1,000,627

 

 

 

911,526

 

ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

1,586,849

 

 

 

218,042

 

 

 

-

 

 

 

446,634

 

 

 

(676

)

 

 

2,250,849

 

 

 

2,028,304

 

Fixed income

 

662,999

 

 

 

59,339

 

 

 

-

 

 

 

(6,063

)

 

 

321

 

 

 

716,596

 

 

 

689,132

 

Multi-asset

 

5,430

 

 

 

1,955

 

 

 

-

 

 

 

736

 

 

 

29

 

 

 

8,150

 

 

 

6,895

 

Alternatives

 

66,057

 

 

 

1,008

 

 

 

-

 

 

 

(3,935

)

 

 

26

 

 

 

63,156

 

 

 

65,933

 

ETFs subtotal

 

2,321,335

 

 

 

280,344

 

 

 

-

 

 

 

437,372

 

 

 

(300

)

 

 

3,038,751

 

 

 

2,790,264

 

Institutional:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

149,260

 

 

 

(4,379

)

 

 

-

 

 

 

37,231

 

 

 

120

 

 

 

182,232

 

 

 

173,263

 

Fixed income

 

693,061

 

 

 

9,122

 

 

 

-

 

 

 

5,825

 

 

 

690

 

 

 

708,698

 

 

 

707,349

 

Multi-asset

 

464,242

 

 

 

66,535

 

 

 

-

 

 

 

74,282

 

 

 

238

 

 

 

605,297

 

 

 

536,848

 

Alternatives

 

120,559

 

 

 

15,635

 

 

 

-

 

 

 

5,555

 

 

 

569

 

 

 

142,318

 

 

 

132,368

 

Active subtotal

 

1,427,122

 

 

 

86,913

 

 

 

-

 

 

 

122,893

 

 

 

1,617

 

 

 

1,638,545

 

 

 

1,549,828

 

Index:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

1,768,582

 

 

 

(159,258

)

 

 

-

 

 

 

508,028

 

 

 

2,240

 

 

 

2,119,592

 

 

 

2,034,356

 

Fixed income

 

859,397

 

 

 

83,457

 

 

 

-

 

 

 

(16,605

)

 

 

3,195

 

 

 

929,444

 

 

 

919,677

 

Multi-asset

 

8,866

 

 

 

(982

)

 

 

-

 

 

 

1,029

 

 

 

(155

)

 

 

8,758

 

 

 

8,804

 

Alternatives

 

4,563

 

 

 

150

 

 

 

-

 

 

 

1,186

 

 

 

(1

)

 

 

5,898

 

 

 

5,512

 

Index subtotal

 

2,641,408

 

 

 

(76,633

)

 

 

-

 

 

 

493,638

 

 

 

5,279

 

 

 

3,063,692

 

 

 

2,968,349

 

Institutional subtotal

 

4,068,530

 

 

 

10,280

 

 

 

-

 

 

 

616,531

 

 

 

6,896

 

 

 

4,702,237

 

 

 

4,518,177

 

Long-term

 

7,136,129

 

 

 

406,513

 

 

 

41,324

 

 

 

1,149,210

 

 

 

8,439

 

 

 

8,741,615

 

 

 

8,219,967

 

Cash management

 

652,002

 

 

 

59,076

 

 

 

-

 

 

 

(1,215

)

 

 

2,152

 

 

 

712,015

 

 

 

695,260

 

Advisory(4)

 

20,366

 

 

 

(10,738

)

 

 

-

 

 

 

377

 

 

 

27

 

 

 

10,032

 

 

 

19,358

 

Total

$

7,808,497

 

 

$

454,851

 

 

$

41,324

 

 

$

1,148,372

 

 

$

10,618

 

 

$

9,463,662

 

 

$

8,934,585

 

Year-over-Year Component Changes by Investment Style and Product Type (Long-Term)

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

inflows

 

 

 

 

 

 

Market

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

2020

 

 

(outflows)

 

 

Acquisition(1)

 

 

change

 

 

FX impact(2)

 

 

2021

 

 

Average AUM(3)

 

Active:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

347,631

 

 

$

43,476

 

 

$

-

 

 

$

84,336

 

 

$

(211

)

 

$

475,232

 

 

$

434,610

 

Fixed income

 

989,412

 

 

 

46,244

 

 

 

-

 

 

 

8,559

 

 

 

1,082

 

 

 

1,045,297

 

 

 

1,032,919

 

Multi-asset

 

583,952

 

 

 

79,443

 

 

 

-

 

 

 

92,479

 

 

 

371

 

 

 

756,245

 

 

 

675,310

 

Alternatives

 

151,678

 

 

 

28,130

 

 

 

-

 

 

 

6,638

 

 

 

647

 

 

 

187,093

 

 

 

170,550

 

Active subtotal

 

2,072,673

 

 

 

197,293

 

 

 

-

 

 

 

192,012

 

 

 

1,889

 

 

 

2,463,867

 

 

 

2,313,389

 

Index and ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

1,586,849

 

 

 

218,042

 

 

 

-

 

 

 

446,634

 

 

 

(676

)

 

 

2,250,849

 

 

 

2,028,304

 

Fixed income

 

662,999

 

 

 

59,339

 

 

 

-

 

 

 

(6,063

)

 

 

321

 

 

 

716,596

 

 

 

689,132

 

Multi-asset

 

5,430

 

 

 

1,955

 

 

 

-

 

 

 

736

 

 

 

29

 

 

 

8,150

 

 

 

6,895

 

Alternatives

 

66,057

 

 

 

1,008

 

 

 

-

 

 

 

(3,935

)

 

 

26

 

 

 

63,156

 

 

 

65,933

 

ETFs subtotal

 

2,321,335

 

 

 

280,344

 

 

 

-

 

 

 

437,372

 

 

 

(300

)

 

 

3,038,751

 

 

 

2,790,264

 

Non-ETF Index:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

1,849,638

 

 

 

(156,865

)

 

 

41,324

 

 

 

534,891

 

 

 

3,341

 

 

 

2,272,329

 

 

 

2,160,834

 

Fixed income

 

879,054

 

 

 

86,566

 

 

 

-

 

 

 

(17,279

)

 

 

3,665

 

 

 

952,006

 

 

 

941,159

 

Multi-asset

 

8,864

 

 

 

(976

)

 

 

-

 

 

 

1,030

 

 

 

(155

)

 

 

8,763

 

 

 

8,808

 

Alternatives

 

4,565

 

 

 

151

 

 

 

-

 

 

 

1,184

 

 

 

(1

)

 

 

5,899

 

 

 

5,513

 

Non-ETF Index subtotal

 

2,742,121

 

 

 

(71,124

)

 

 

41,324

 

 

 

519,826

 

 

 

6,850

 

 

 

3,238,997

 

 

 

3,116,314

 

Index and ETFs subtotal

 

5,063,456

 

 

 

209,220

 

 

 

41,324

 

 

 

957,198

 

 

 

6,550

 

 

 

6,277,748

 

 

 

5,906,578

 

Long-term

$

7,136,129

 

 

$

406,513

 

 

$

41,324

 

 

$

1,149,210

 

 

$

8,439

 

 

$

8,741,615

 

 

$

8,219,967

 

Year-over-Year Component Changes by Product Type (Long-Term)

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

inflows

 

 

 

 

 

 

Market

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

2020

 

 

(outflows)

 

 

Acquisition(1)

 

 

change

 

 

FX impact(2)

 

 

2021

 

 

Average AUM(3)

 

Equity

$

3,784,118

 

 

$

104,653

 

 

$

41,324

 

 

$

1,065,861

 

 

$

2,454

 

 

$

4,998,410

 

 

$

4,623,748

 

Fixed income

 

2,531,465

 

 

 

192,149

 

 

 

-

 

 

 

(14,783

)

 

 

5,068

 

 

 

2,713,899

 

 

 

2,663,210

 

Multi-asset

 

598,246

 

 

 

80,422

 

 

 

-

 

 

 

94,245

 

 

 

245

 

 

 

773,158

 

 

 

691,013

 

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

79,723

 

 

 

16,844

 

 

 

-

 

 

 

1,660

 

 

 

94

 

 

 

98,321

 

 

 

90,319

 

Liquid alternatives

 

69,255

 

 

 

10,492

 

 

 

-

 

 

 

4,653

 

 

 

652

 

 

 

85,052

 

 

 

77,069

 

Currency and commodities(5)

 

73,322

 

 

 

1,953

 

 

 

-

 

 

 

(2,426

)

 

 

(74

)

 

 

72,775

 

 

 

74,608

 

Alternatives subtotal

 

222,300

 

 

 

29,289

 

 

 

-

 

 

 

3,887

 

 

 

672

 

 

 

256,148

 

 

 

241,996

 

Long-term

$

7,136,129

 

 

$

406,513

 

 

$

41,324

 

 

$

1,149,210

 

 

$

8,439

 

 

$

8,741,615

 

 

$

8,219,967

 

 

(1)

Amounts include AUM attributable to the Aperio Transaction.

(2)

Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US dollars for reporting purposes.

(3)

Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing thirteen months.

(4)

Advisory AUM represents mandates linked to purchases and disposition of assets and portfolios on behalf of official institutions and long-term portfolio liquidation assignments.

(5)

Amounts include commodity ETFs.

 

 

7

 


 

 

SUMMARY OF REVENUE

 

Three Months

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

Nine Months

 

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

June 30,

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

(in millions), (unaudited)

2021

 

 

2020

 

 

Change

 

 

2021

 

 

Change

 

 

2021

 

 

2020

 

 

Change

 

 

Investment advisory, administration fees and

   securities lending revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

$

674

 

 

$

457

 

 

$

217

 

 

$

641

 

 

$

33

 

 

$

1,891

 

 

$

1,236

 

 

$

655

 

 

ETFs

 

1,212

 

 

 

880

 

 

 

332

 

 

 

1,156

 

 

 

56

 

 

 

3,436

 

 

 

2,551

 

 

 

885

 

 

Non-ETF Index

 

207

 

 

 

164

 

 

 

43

 

 

 

198

 

 

 

9

 

 

 

581

 

 

 

505

 

 

 

76

 

 

Equity subtotal

 

2,093

 

 

 

1,501

 

 

 

592

 

 

 

1,995

 

 

 

98

 

 

 

5,908

 

 

 

4,292

 

 

 

1,616

 

 

Fixed income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

 

561

 

 

 

498

 

 

 

63

 

 

 

545

 

 

 

16

 

 

 

1,631

 

 

 

1,443

 

 

 

188

 

 

ETFs

 

304

 

 

 

297

 

 

 

7

 

 

 

294

 

 

 

10

 

 

 

893

 

 

 

817

 

 

 

76

 

 

Non-ETF Index

 

121

 

 

 

113

 

 

 

8

 

 

 

116

 

 

 

5

 

 

 

350

 

 

 

354

 

 

 

(4

)

 

Fixed income subtotal

 

986

 

 

 

908

 

 

 

78

 

 

 

955

 

 

 

31

 

 

 

2,874

 

 

 

2,614

 

 

 

260

 

 

Multi-asset

 

369

 

 

 

289

 

 

 

80

 

 

 

344

 

 

 

25

 

 

 

1,041

 

 

 

852

 

 

 

189

 

 

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

166

 

 

 

140

 

 

 

26

 

 

 

167

 

 

 

(1

)

 

 

501

 

 

 

416

 

 

 

85

 

 

Liquid alternatives

 

163

 

 

 

132

 

 

 

31

 

 

 

150

 

 

 

13

 

 

 

460

 

 

 

361

 

 

 

99

 

 

Currency and commodities

 

55

 

 

 

51

 

 

 

4

 

 

 

55

 

 

 

-

 

 

 

163

 

 

 

118

 

 

 

45

 

 

Alternatives subtotal

 

384

 

 

 

323

 

 

 

61

 

 

 

372

 

 

 

12

 

 

 

1,124

 

 

 

895

 

 

 

229

 

 

Long-term

 

3,832

 

 

 

3,021

 

 

 

811

 

 

 

3,666

 

 

 

166

 

 

 

10,947

 

 

 

8,653

 

 

 

2,294

 

 

Cash management

 

111

 

 

 

204

 

 

 

(93

)

 

 

91

 

 

 

20

 

 

 

345

 

 

 

593

 

 

 

(248

)

 

Total investment advisory, administration fees

  and securities lending revenue

 

3,943

 

 

 

3,225

 

 

 

718

 

 

 

3,757

 

 

 

186

 

 

 

11,292

 

 

 

9,246

 

 

 

2,046

 

 

Investment advisory performance fees:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

8

 

 

 

4

 

 

 

4

 

 

 

36

 

 

 

(28

)

 

 

70

 

 

 

29

 

 

 

41

 

 

Fixed income

 

2

 

 

 

9

 

 

 

(7

)

 

 

15

 

 

 

(13

)

 

 

31

 

 

 

13

 

 

 

18

 

 

Multi-asset

 

-

 

 

 

10

 

 

 

(10

)

 

 

9

 

 

 

(9

)

 

 

17

 

 

 

13

 

 

 

4

 

 

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

50

 

 

 

6

 

 

 

44

 

 

 

90

 

 

 

(40

)

 

 

147

 

 

 

55

 

 

 

92

 

 

Liquid alternatives

 

285

 

 

 

503

 

 

 

(218

)

 

 

190

 

 

 

95

 

 

 

549

 

 

 

575

 

 

 

(26

)

 

Alternatives subtotal

 

335

 

 

 

509

 

 

 

(174

)

 

 

280

 

 

 

55

 

 

 

696

 

 

 

630

 

 

 

66

 

 

Total performance fees

 

345

 

 

 

532

 

 

 

(187

)

 

 

340

 

 

 

5

 

 

 

814

 

 

 

685

 

 

 

129

 

 

Technology services revenue

 

320

 

 

 

282

 

 

 

38

 

 

 

316

 

 

 

4

 

 

 

942

 

 

 

834

 

 

 

108

 

 

Distribution fees:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retrocessions

 

294

 

 

 

188

 

 

 

106

 

 

 

264

 

 

 

30

 

 

 

796

 

 

 

519

 

 

 

277

 

 

12b-1 fees (US mutual fund distribution fees)

 

91

 

 

 

85

 

 

 

6

 

 

 

87

 

 

 

4

 

 

 

263

 

 

 

254

 

 

 

9

 

 

Other

 

16

 

 

 

15

 

 

 

1

 

 

 

18

 

 

 

(2

)

 

 

51

 

 

 

44

 

 

 

7

 

 

Total distribution fees

 

401

 

 

 

288

 

 

 

113

 

 

 

369

 

 

 

32

 

 

 

1,110

 

 

 

817

 

 

 

293

 

 

Advisory and other revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advisory

 

13

 

 

 

14

 

 

 

(1

)

 

 

9

 

 

 

4

 

 

 

37

 

 

 

48

 

 

 

(11

)

 

Other

 

28

 

 

 

28

 

 

 

-

 

 

 

29

 

 

 

(1

)

 

 

73

 

 

 

97

 

 

 

(24

)

 

Total advisory and other revenue

 

41

 

 

 

42

 

 

 

(1

)

 

 

38

 

 

 

3

 

 

 

110

 

 

 

145

 

 

 

(35

)

 

Total revenue

$

5,050

 

 

$

4,369

 

 

$

681

 

 

$

4,820

 

 

$

230

 

 

$

14,268

 

 

$

11,727

 

 

$

2,541

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Highlights

Investment advisory, administration fees and securities lending revenue increased $718 million from the third quarter of 2020, primarily driven by the positive impact of market beta and foreign exchange movements on average AUM and strong organic base fee growth, partially offset by the impact of yield-related fee waivers on certain money market funds and strategic pricing changes to certain products. Securities lending revenue of $152 million decreased from $153 million in the third quarter of 2020, primarily reflecting lower asset spreads, partially offset by higher average balances of securities on loan.

Investment advisory, administration fees and securities lending revenue increased $186 million from the second quarter of 2021, primarily driven by organic growth, the positive impact of market beta on average AUM, the effect of one additional day in the quarter and lower yield-related fee waivers on certain money market funds. Securities lending revenue of $152 million increased from $140 million in the second quarter of 2021.

Performance fees decreased $187 million from the third quarter of 2020, primarily reflecting lower revenue from liquid alternative products, including lower fees from a single hedge fund with an annual performance measurement period that ends in the third quarter, partially offset by higher revenue from illiquid alternative products.

Performance fees increased $5 million from the second quarter of 2021, primarily reflecting higher revenue from liquid alternative products, partially offset by lower revenue from long-only mandates and illiquid alternative products.

Technology services revenue increased $38 million from the third quarter of 2020, primarily reflecting higher revenue from Aladdin®. Technology services annual contract value(1) (“ACV”) increased 16% from the third quarter of 2020.

 

 

(1)

ACV represents forward-looking recurring subscription fees under client contracts for the next twelve months at the end of a respective quarter, assuming all client contracts that come up for renewal are renewed. ACV excludes nonrecurring fees such as implementation and consulting fees. See note (4) in the supplemental information on page 13 for more information on ACV.

8

 


 

 

SUMMARY OF OPERATING EXPENSE

 

 

Three Months

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

Nine Months

 

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

June 30,

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

(in millions), (unaudited)

2021

 

 

2020

 

 

Change

 

 

2021

 

 

Change

 

 

2021

 

 

2020

 

 

Change

 

 

Operating expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

$

1,527

 

 

$

1,411

 

 

$

116

 

 

$

1,548

 

 

$

(21

)

 

$

4,484

 

 

$

3,700

 

 

$

784

 

 

Distribution and servicing costs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retrocessions

 

294

 

 

 

188

 

 

 

106

 

 

 

264

 

 

 

30

 

 

 

796

 

 

 

519

 

 

 

277

 

 

12b-1 costs

 

89

 

 

 

83

 

 

 

6

 

 

 

85

 

 

 

4

 

 

 

257

 

 

 

247

 

 

 

10

 

 

Other

 

202

 

 

 

185

 

 

 

17

 

 

 

174

 

 

 

28

 

 

 

560

 

 

 

564

 

 

 

(4

)

 

Total distribution and servicing costs

 

585

 

 

 

456

 

 

 

129

 

 

 

523

 

 

 

62

 

 

 

1,613

 

 

 

1,330

 

 

 

283

 

 

Direct fund expense

 

354

 

 

 

257

 

 

 

97

 

 

 

320

 

 

 

34

 

 

 

994

 

 

 

780

 

 

 

214

 

 

General and administration expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketing and promotional

 

54

 

 

 

48

 

 

 

6

 

 

 

53

 

 

 

1

 

 

 

142

 

 

 

156

 

 

 

(14

)

 

Occupancy and office related

 

91

 

 

 

81

 

 

 

10

 

 

 

80

 

 

 

11

 

 

 

250

 

 

 

239

 

 

 

11

 

 

Portfolio services

 

93

 

 

 

73

 

 

 

20

 

 

 

87

 

 

 

6

 

 

 

267

 

 

 

203

 

 

 

64

 

 

Technology

 

140

 

 

 

93

 

 

 

47

 

 

 

129

 

 

 

11

 

 

 

373

 

 

 

273

 

 

 

100

 

 

Professional services

 

42

 

 

 

36

 

 

 

6

 

 

 

41

 

 

 

1

 

 

 

122

 

 

 

121

 

 

 

1

 

 

Communications

 

11

 

 

 

14

 

 

 

(3

)

 

 

11

 

 

 

-

 

 

 

33

 

 

 

40

 

 

 

(7

)

 

Foreign exchange remeasurement

 

1

 

 

 

1

 

 

 

-

 

 

 

(2

)

 

 

3

 

 

 

3

 

 

 

7

 

 

 

(4

)

 

Contingent consideration fair value adjustments

 

29

 

 

 

-

 

 

 

29

 

 

 

1

 

 

 

28

 

 

 

33

 

 

 

23

 

 

 

10

 

 

Product launch costs

 

96

 

 

 

80

 

 

 

16

 

 

 

-

 

 

 

96

 

 

 

274

 

 

 

164

 

 

 

110

 

 

Charitable Contribution

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

589

 

 

 

(589

)

 

Other general and administration

 

54

 

 

 

35

 

 

 

19

 

 

 

61

 

 

 

(7

)

 

 

160

 

 

 

176

 

 

 

(16

)

 

Total general and administration expense

 

611

 

 

 

461

 

 

 

150

 

 

 

461

 

 

 

150

 

 

 

1,657

 

 

 

1,991

 

 

 

(334

)

 

Amortization of intangible assets

 

38

 

 

 

27

 

 

 

11

 

 

 

37

 

 

 

1

 

 

 

109

 

 

 

79

 

 

 

30

 

 

Total operating expense

$

3,115

 

 

$

2,612

 

 

$

503

 

 

$

2,889

 

 

$

226

 

 

$

8,857

 

 

$

7,880

 

 

$

977

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Highlights

Employee compensation and benefits expense increased $116 million from the third quarter of 2020, primarily reflecting higher base compensation, driven by previously announced base salary increases and higher headcount, and higher deferred compensation, reflecting the impact of additional grants associated with prior-year compensation.

Employee compensation and benefits expense decreased $21 million from the second quarter of 2021, primarily due to lower deferred compensation, reflecting the impact of certain previous acquisition-related compensation arrangements in the second quarter of 2021, partially offset by higher base compensation associated with previously announced salary increases and higher headcount.

Direct fund expense increased $97 million from the third quarter of 2020 and $34 million from the second quarter of 2021, primarily reflecting higher average AUM.

General and administration expense increased $150 million from the third quarter of 2020 reflecting higher technology and portfolio services expense.  The increase also reflected higher product launch costs, primarily associated with the September 2021 close of the BlackRock ESG Capital Allocation Trust, higher contingent consideration fair value adjustments, and $11 million of noncash occupancy expense related to the lease of office space for the Company’s future headquarters located at 50 Hudson Yards in New York (“Lease cost – Hudson Yards”), which it expects to begin to occupy in late 2022 (and begin lease payments in May 2023).  Lease cost – Hudson Yards has been excluded from our “as adjusted” financial results – see pages 11 through 13 for the reconciliation to GAAP and notes (1) through (3) for more information on as adjusted items.

General and administration expense also increased $150 million from the second quarter of 2021, primarily reflecting the higher product launch costs, contingent consideration fair value adjustments, higher technology expense and occupancy expense noted above.

Amortization of intangible assets expense increased $11 million from the third quarter of 2020, primarily reflecting amortization of intangible assets related to the Aperio Transaction.

 

 

 

 

 

 

 

 

 

 

 

 

9

 


 

 

SUMMARY OF NONOPERATING INCOME (expense), less net income (loss) attributable TO noncontrolling interests

 

 

 

 

Three Months

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

Nine Months

 

 

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

June 30,

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

(in millions), (unaudited)

 

2021

 

 

2020

 

 

Change

 

 

2021

 

 

Change

 

 

2021

 

 

2020

 

 

Change

 

 

Nonoperating income (expense), GAAP basis

 

$

336

 

 

$

224

 

 

$

112

 

 

$

270

 

 

$

66

 

 

$

652

 

 

$

510

 

 

$

142

 

 

Less: Net income (loss) attributable to

     noncontrolling interests ("NCI")

 

 

72

 

 

 

153

 

 

 

(81

)

 

 

169

 

 

 

(97

)

 

 

315

 

 

 

162

 

 

 

153

 

 

Nonoperating income (expense)(1)

 

$

264

 

 

$

71

 

 

$

193

 

 

$

101

 

 

$

163

 

 

$

337

 

 

$

348

 

 

$

(11

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

Nine Months

 

 

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

June 30,

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

(in millions), (unaudited)

 

2021

 

 

2020

 

 

Change

 

 

2021

 

 

Change

 

 

2021

 

 

2020

 

 

Change

 

 

Net gain (loss) on investments(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Private equity

 

$

124

 

 

$

18

 

 

$

106

 

 

$

66

 

 

$

58

 

 

$

212

 

 

$

8

 

 

$

204

 

 

Real assets

 

 

4

 

 

 

6

 

 

 

(2

)

 

 

3

 

 

 

1

 

 

 

10

 

 

 

11

 

 

 

(1

)

 

Other alternatives(2)

 

 

13

 

 

 

14

 

 

 

(1

)

 

 

17

 

 

 

(4

)

 

 

43

 

 

 

10

 

 

 

33

 

 

Other investments(3)

 

 

(8

)

 

 

55

 

 

 

(63

)

 

 

48

 

 

 

(56

)

 

 

37

 

 

 

35

 

 

 

2

 

 

Subtotal

 

 

133

 

 

 

93

 

 

 

40

 

 

 

134

 

 

 

(1

)

 

 

302

 

 

 

64

 

 

 

238

 

 

Gain related to the Charitable Contribution

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

122

 

 

 

(122

)

 

Other gains (losses)(4)

 

 

165

 

 

 

23

 

 

 

142

 

 

 

11

 

 

 

154

 

 

 

149

 

 

 

279

 

 

 

(130

)

 

Total net gain (loss) on investments(1)

 

 

298

 

 

 

116

 

 

 

182

 

 

 

145

 

 

 

153

 

 

 

451

 

 

 

465

 

 

 

(14

)

 

Interest and dividend income

 

 

14

 

 

 

9

 

 

 

5

 

 

 

8

 

 

 

6

 

 

 

41

 

 

 

34

 

 

 

7

 

 

Interest expense

 

 

(48

)

 

 

(54

)

 

 

6

 

 

 

(52

)

 

 

4

 

 

 

(155

)

 

 

(151

)

 

 

(4

)

 

Net interest expense

 

 

(34

)

 

 

(45

)

 

 

11

 

 

 

(44

)

 

 

10

 

 

 

(114

)

 

 

(117

)

 

 

3

 

 

Nonoperating income (expense)(1)

 

$

264

 

 

$

71

 

 

$

193

 

 

$

101

 

 

$

163

 

 

$

337

 

 

$

348

 

 

$

(11

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Net of net income (loss) attributable to NCI. Management believes nonoperating income (expense), as adjusted, is an effective measure for reviewing BlackRock’s nonoperating results, which ultimately impacts BlackRock’s book value. For more information on as adjusted items and the reconciliation to GAAP see note (2) to the condensed consolidated statements of income and supplemental information on pages 11 through 13.

(2)

Amounts primarily include net gains (losses) related to credit funds, direct hedge fund strategies and hedge fund solutions.

(3)

Amounts primarily include net gains (losses) related to unhedged equity, fixed income and multi-asset investments.

(4)

The amounts for the three and nine months ended September 30, 2021 include nonoperating noncash pre-tax gains in connection with strategic minority investments in iCapital Network, Inc. of approximately $107 million and Scalable Capital Limited of approximately $46 million.  The amount for the nine months ended September 30, 2020 includes a nonoperating noncash pre-tax gain of approximately $240 million in connection with a recapitalization of iCapital Network, Inc. Additional amounts include noncash pre-tax gains (losses) related to the revaluation of certain other corporate minority investments.

 

 

INCOME TAX EXPENSE

 

 

Three Months

 

 

 

 

 

Three Months

 

 

 

 

 

 

Nine Months

 

 

 

 

 

 

 

Ended

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

 

September 30,

 

 

 

 

 

June 30,

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

(in millions), (unaudited)

2021

 

 

2020

 

 

Change

 

2021

 

 

Change

 

 

2021

 

 

2020

 

 

Change

 

 

Income tax expense

$

518

 

 

$

464

 

 

$

54

 

 

$

654

 

 

$

(136

)

 

$

1,490

 

 

$

811

 

 

$

679

 

 

Effective tax rate

 

23.6

%

 

 

25.4

%

 

 

(180

) bps

 

 

32.2

%

 

 

(860

) bps

 

 

25.9

%

 

 

19.3

%

 

 

660

bps

 

 


10

 


 

 

 

 

RECONCILIATION OF US GAAP OPERATING INCOME AND OPERATING MARGIN TO OPERATING INCOME AND OPERATING MARGIN, AS ADJUSTED

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

September 30,

 

 

June 30,

 

 

September 30,

 

 

(in millions), (unaudited)

 

2021

 

 

2020

 

 

2021

 

 

2021

 

 

2020

 

 

Operating income, GAAP basis

 

$

1,935

 

 

$

1,757

 

 

$

1,931

 

 

$

5,411

 

 

$

3,847

 

 

Non-GAAP expense adjustment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease costs - Hudson Yards

 

 

11

 

 

 

-

 

 

 

-

 

 

 

11

 

 

 

-

 

 

Charitable Contribution

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

589

 

 

Operating income, as adjusted (1)

 

 

1,946

 

 

 

1,757

 

 

 

1,931

 

 

 

5,422

 

 

 

4,436

 

 

Product launch costs and commissions

 

 

99

 

 

 

83

 

 

 

-

 

 

 

284

 

 

 

170

 

 

Operating income used for operating margin measurement

 

$

2,045

 

 

$

1,840

 

 

$

1,931

 

 

$

5,706

 

 

$

4,606

 

 

Revenue, GAAP basis

 

$

5,050

 

 

$

4,369

 

 

$

4,820

 

 

$

14,268

 

 

$

11,727

 

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution fees

 

 

(401

)

 

 

(288

)

 

 

(369

)

 

 

(1,110

)

 

 

(817

)

 

Investment advisory fees

 

 

(184

)

 

 

(168

)

 

 

(154

)

 

 

(503

)

 

 

(513

)

 

Revenue used for operating margin measurement

 

$

4,465

 

 

$

3,913

 

 

$

4,297

 

 

$

12,655

 

 

$

10,397

 

 

Operating margin, GAAP basis

 

 

38.3

%

 

 

40.2

%

 

 

40.1

%

 

 

37.9

%

 

 

32.8

%

 

Operating margin, as adjusted (1)

 

 

45.8

%

 

 

47.0

%

 

 

44.9

%

 

 

45.1

%

 

 

44.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See note (1) to the condensed consolidated statements of income and supplemental information on page 12 for more information on as adjusted items and the reconciliation to GAAP.

 

RECONCILIATION OF US GAAP NONOPERATING INCOME (EXPENSE) TO NONOPERATING INCOME (EXPENSE), LESS NET INCOME (LOSS) ATTRIBUTABLE TO NCI, AS ADJUSTED

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

September 30,

 

 

June 30,

 

 

September 30,

 

 

(in millions), (unaudited)

 

2021

 

 

2020

 

 

2021

 

 

2021

 

 

2020

 

 

Nonoperating income (expense), GAAP basis

 

$

336

 

 

$

224

 

 

$

270

 

 

$

652

 

 

$

510

 

 

Less: Net income (loss) attributable to NCI

 

 

72

 

 

 

153

 

 

 

169

 

 

 

315

 

 

 

162

 

 

Nonoperating income (expense), net of NCI

 

 

264

 

 

 

71

 

 

 

101

 

 

 

337

 

 

 

348

 

 

Less: Gain related to the Charitable Contribution

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

122

 

 

Nonoperating income (expense), less net income (loss)

   attributable to NCI, as adjusted (2)

 

$

264

 

 

$

71

 

 

$

101

 

 

$

337

 

 

$

226

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See note (2) to the condensed consolidated statements of income and supplemental information on page 13 for more information on as adjusted items and the reconciliation to GAAP.

 

RECONCILIATION OF US GAAP NET INCOME ATTRIBUTABLE TO BLACKROCK TO NET INCOME ATTRIBUTABLE TO BLACKROCK, AS ADJUSTED

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

September 30,

 

 

June 30,

 

 

September 30,

 

 

(in millions, except per share data), (unaudited)

 

2021

 

 

2020

 

 

2021

 

 

2021

 

 

2020

 

 

Net income attributable to BlackRock, Inc., GAAP basis

 

$

1,681

 

 

$

1,364

 

 

$

1,378

 

 

$

4,258

 

 

$

3,384

 

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease costs - Hudson Yards, net of tax

 

 

9

 

 

 

-

 

 

 

-

 

 

 

9

 

 

 

-

 

 

Charitable Contribution, net of tax

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

226

 

 

Income tax matters

 

 

-

 

 

 

54

 

 

 

171

��

 

 

171

 

 

 

54

 

 

Net income attributable to BlackRock, Inc., as adjusted (3)

 

$

1,690

 

 

$

1,418

 

 

$

1,549

 

 

$

4,438

 

 

$

3,664

 

 

Diluted weighted-average common shares outstanding

 

 

154.3

 

 

 

153.7

 

 

 

154.4

 

 

 

154.4

 

 

 

155.0

 

 

Diluted earnings per common share, GAAP basis

 

$

10.89

 

 

$

8.87

 

 

$

8.92

 

 

$

27.59

 

 

$

21.84

 

 

Diluted earnings per common share, as adjusted (3)

 

$

10.95

 

 

$

9.22

 

 

$

10.03

 

 

$

28.75

 

 

$

23.64

 

 

 

See note (3) to the condensed consolidated statements of income and supplemental information on page 13 for more information on as adjusted items and the reconciliation to GAAP.


11

 


 

 

NOTES TO CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION (unaudited)

 

BlackRock reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”); however, management believes evaluating the Company’s ongoing operating results may be enhanced if investors have additional non-GAAP financial measures. Management reviews non-GAAP financial measures to assess ongoing operations and considers them to be helpful, for both management and investors, in evaluating BlackRock’s financial performance over time. Management also uses non-GAAP financial measures as a benchmark to compare its performance with other companies and to enhance the comparability of this information for the reporting periods presented. Non-GAAP measures may pose limitations because they do not include all of BlackRock’s revenue and expense. BlackRock’s management does not advocate that investors consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Non-GAAP measures may not be comparable to other similarly titled measures of other companies.

Management uses both GAAP and non-GAAP financial measures in evaluating BlackRock’s financial performance.  Adjustments to GAAP financial measures (“non-GAAP adjustments”) include certain items management deems nonrecurring or that occur infrequently, transactions that ultimately will not impact BlackRock’s book value or certain tax items that do not impact cash flow.

Computations for all periods are derived from the condensed consolidated statements of income as follows:

(1) Operating income, as adjusted, and operating margin, as adjusted: Management believes operating income, as adjusted, and operating margin, as adjusted, are effective indicators of BlackRock’s financial performance over time, and, therefore, provide useful disclosure to investors. Management believes that operating margin, as adjusted, reflects the Company’s long-term ability to manage ongoing costs in relation to its revenues. The Company uses operating margin, as adjusted, to assess the Company’s financial performance and to determine the long-term and annual compensation of the Company’s senior-level employees. Furthermore, this metric is used to evaluate the Company’s relative performance against industry peers, as it eliminates margin variability arising from the accounting of revenues and expenses related to distributing different product structures in multiple distribution channels utilized by asset managers.

Operating income, as adjusted, includes non-GAAP expense adjustments. During the three and nine months ended September 30, 2021, the Company recorded expense of $11 million related to the lease of office space for its future headquarters located at 50 Hudson Yards in New York (“Lease cost – Hudson Yards”). While the Company expects to begin to occupy the new office space in late 2022 (and begin cash lease payments in May 2023), the Company is required to record lease expense from August 2021 because it obtained access to the building to begin its tenant improvements.  As a result, the Company is recognizing lease expense for both its current and future headquarters until its current headquarters lease expires in April 2023.  Management believes removing the Lease cost – Hudson Yards when calculating operating income, as adjusted, is useful to assess its financial performance and enhances comparability among periods presented. During the nine months ended September 30, 2020, the Company contributed its remaining 20% stake in PennyMac Financial Services, Inc. (the “Charitable Contribution”). The Charitable Contribution expense of $589 million has been excluded from operating income, as adjusted, due to its nonrecurring nature.

Operating income used for measuring operating margin, as adjusted, is equal to operating income, as adjusted, excluding the impact of product launch costs (e.g. closed-end fund launch costs) and related commissions. Management believes the exclusion of such costs and related commissions is useful because these costs can fluctuate considerably and revenue associated with the expenditure of these costs will not fully impact BlackRock’s results until future periods.

Revenue used for calculating operating margin, as adjusted, is reduced to exclude all of the Company’s distribution fees, which are recorded as a separate line item on the condensed consolidated statements of income, as well as a portion of investment advisory fees received that is used to pay distribution and servicing costs. For certain products, based on distinct arrangements, distribution fees are collected by the Company and then passed-through to third-party client intermediaries. For other products, investment advisory fees are collected by the Company and a portion is passed-through to third-party client intermediaries. However, in both structures, the third-party client intermediary similarly owns the relationship with the retail client and is responsible for distributing the product and servicing the client. The amount of distribution and investment advisory fees fluctuates each period primarily based on a predetermined percentage of the value of AUM during the period. These fees also vary based on the type of investment product sold and the geographic location where it is sold. In addition, the Company may waive fees on certain products that could result in the reduction of payments to the third-party intermediaries.


12

 


 

 

(2) Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted: Management believes nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, is an effective measure for reviewing BlackRock’s nonoperating contribution to its results and provides comparability of this information among reporting periods.  Management believes nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, provides a useful measure, for both management and investors, of BlackRock’s nonoperating results, which ultimately impact BlackRock’s book value. During the nine months ended September 30, 2020, the noncash, nonoperating pre-tax gain of $122 million related to the Charitable Contribution has been excluded from nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, due to its nonrecurring nature.

(3) Net income attributable to BlackRock, Inc., as adjusted: Management believes net income attributable to BlackRock, Inc., as adjusted, and diluted earnings per common share, as adjusted, are useful measures of BlackRock’s profitability and financial performance. Net income attributable to BlackRock, Inc., as adjusted, equals net income attributable to BlackRock, Inc., GAAP basis, adjusted for significant nonrecurring items, charges that ultimately will not impact BlackRock’s book value or certain tax items that do not impact cash flow.

See aforementioned discussion regarding operating income, as adjusted, operating margin, as adjusted, and nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, for information on the Lease cost – Hudson Yards and Charitable Contribution.

The nine months ended September 30, 2020 included a discrete tax benefit of $241 million that was recognized in connection with the Charitable Contribution. The discrete tax benefit has been excluded from as adjusted results due to the nonrecurring nature of the Charitable Contribution. Amounts for income tax matters represent net noncash (benefits) expense primarily associated with the revaluation of certain deferred tax liabilities related to intangible assets and goodwill as a result of tax rate changes. These amounts have been excluded from the as adjusted results as these items will not have a cash flow impact and to ensure comparability among periods presented.

Per share amounts reflect net income attributable to BlackRock, Inc., as adjusted, divided by diluted weighted-average common shares outstanding.

(4) ACV: Management believes ACV is an effective metric for reviewing BlackRock’s technology services’ ongoing contribution to its operating results and provides comparability of this information among reporting periods while also providing a useful supplemental metric for both management and investors of BlackRock’s growth in technology services revenue over time, as it is linked to the net new business in technology services.


13

 


 

FORWARD-LOOKING STATEMENTS

 

This earnings release, and other statements that BlackRock may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to BlackRock’s future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” and similar expressions.

BlackRock cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and BlackRock assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

BlackRock has previously disclosed risk factors in its Securities and Exchange Commission (“SEC”) reports. These risk factors and those identified elsewhere in this earnings release, among others, could cause actual results to differ materially from forward-looking statements or historical performance and include: (1) a pandemic or health crisis, including the COVID-19 pandemic, and its continued impact on financial institutions, the global economy or capital markets, as well as BlackRock’s products, clients, vendors and employees, and BlackRock’s results of operations, the full extent of which may be unknown; (2) the introduction, withdrawal, success and timing of business initiatives and strategies; (3) changes and volatility in political, economic or industry conditions, the interest rate environment, foreign exchange rates or financial and capital markets, which could result in changes in demand for products or services or in the value of assets under management (“AUM”); (4) the relative and absolute investment performance of BlackRock’s investment products; (5) BlackRock’s ability to develop new products and services that address client preferences; (6) the impact of increased competition; (7) the impact of future acquisitions or divestitures; (8) BlackRock’s ability to integrate acquired businesses successfully; (9) the unfavorable resolution of legal proceedings; (10) the extent and timing of any share repurchases; (11) the impact, extent and timing of technological changes and the adequacy of intellectual property, information and cyber security protection; (12) attempts to circumvent BlackRock’s operational control environment or the potential for human error in connection with BlackRock’s operational systems; (13) the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to BlackRock; (14) changes in law and policy and uncertainty pending any such changes; (15) any failure to effectively manage conflicts of interest; (16) damage to BlackRock’s reputation; (17) terrorist activities, civil unrest, international hostilities and natural disasters, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or BlackRock; (18) the ability to attract and retain highly talented professionals; (19) fluctuations in the carrying value of BlackRock’s economic investments; (20) the impact of changes to tax legislation, including income, payroll and transaction taxes, and taxation on products or transactions, which could affect the value proposition to clients and, generally, the tax position of the Company; (21) BlackRock’s success in negotiating distribution arrangements and maintaining distribution channels for its products; (22) the failure by a key vendor of BlackRock to fulfill its obligations to the Company; (23) operational, technological and regulatory risks associated with BlackRock’s major technology partnerships; (24) any disruption to the operations of third parties whose functions are integral to BlackRock’s exchange-traded funds platform; (25) the impact of BlackRock electing to provide support to its products from time to time and any potential liabilities related to securities lending or other indemnification obligations; and (26) the impact of problems at other financial institutions or the failure or negative performance of products at other financial institutions.

BlackRock’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and BlackRock’s subsequent filings with the SEC, accessible on the SEC’s website at www.sec.gov and on BlackRock’s website at www.blackrock.com, discuss these factors in more detail and identify additional factors that can affect forward-looking statements. The information contained on the Company’s website is not a part of this earnings release.

PERFORMANCE NOTES

 

Past performance is not indicative of future results. Except as specified, the performance information shown is as of September 30, 2021 and is based on preliminary data available at that time. The performance data shown reflects information for all actively and passively managed equity and fixed income accounts, including US registered investment companies, European-domiciled retail funds and separate accounts for which performance data is available, including performance data for high net worth accounts available as of August 31, 2021. The performance data does not include accounts terminated prior to September 30, 2021 and accounts for which data has not yet been verified. If such accounts had been included, the performance data provided may have substantially differed from that shown.

Performance comparisons shown are gross-of-fees for institutional and high net worth separate accounts, and net-of-fees for retail funds. The performance tracking shown for index accounts is based on gross-of-fees performance and includes all institutional accounts and all iShares® funds globally using an index strategy. AUM information is based on AUM available as of September 30, 2021 for each account or fund in the asset class shown without adjustment for overlapping management of the same account or fund. Fund performance reflects the reinvestment of dividends and distributions.

Performance shown is derived from applicable benchmarks or peer median information, as selected by BlackRock, Inc. Peer medians are based in part on data either from Lipper, Inc. or Morningstar, Inc. for each included product.

14