For years, BlackRock Inc. has struggled to profit from an investor preference for actively managed bond funds that has largely eluded the world’s largest asset manager. Now Chief Executive Officer Laurence D. Fink is facing a new headache.
BlackRock, the world’s biggest provider of exchange-traded funds, is losing market share in the ETF business to Vanguard Group Inc., the company best known for its low-cost index funds. BlackRock’s U.S. market share declined by 1.4 percent this year to about 41 percent as of June 30, according to a report by State Street Global Advisors. Vanguard, the third largest ETF manager after No. 2 State Street Corp., had a market share increase of 1.7 percent to 18 percent.
The company’s fixed-income ETF deposits for the second quarter as well as year-to-date through June 30 represent more than 50 percent of the industry’s flows, said Mark Lake, a spokesman for BlackRock.
Revenue for BlackRock Solutions, the unit that advises financial institutions and governments on hard-to-value assets, increased 13 percent from a year earlier as the unit added new assignments and clients who use the Aladdin investment-management system increased assets.