Three months ago I posted on Blackrock (link here) and noted how the company's iShares / passive products were hugely outstripping any active offering the company has.
The last quarter has continued that trend. Just take a look at the equity inflows during Q4 below, iShares equity inflows were over 27 times those of the company's active products. 27 times!
Is this justified? Well, look at the investment performance of actively managed equity products. Over a one, three or five year period it is desperately 50-50 whether the product outperformed or not. So no wonder the passive inflows are so huge?
Well...yes and no. Passive has outperformed because of the nature of markets. As I noted in this note on a stock picking market...we have been in that sort of world:
So...if we do move into that world, will Blackrock trading at around x14 EV/ebit today be as strong a performer? In October I noted the shares technically had to push through US$300 to keep moving forward and they have. Futures today are suggesting the stronger-than-hoped numbers will see the shares north of US$325. I can't help thinking that the company's share price move is getting ever more correlated with not just the direction of the (equity) market but with a continuation of a NON stock picker's market.