BlackRock's ETF business just keeps growing, but the search for revenue goes on

When BlackRock CEO Larry Fink bought the iShares ETF business from Barclays for roughly $13 billion in 2009, the economy was still reeling from the great financial crisis.

At the time, $13 billion seemed like an awful lot of money to spend on a tiny business. ETFs were still in their infancy: there was roughly $700 million in total assets under management, a paltry sum compared to the trillions then in mutual funds.

By these metrics, Fink's gamble has proven to be one of the greatest financial investments of all time.

Doing a sum-of-the-parts analysis of Blackrock's ETF business would be a difficult endeavor, but certainly revenue, assets under management (AUM), and growth potential are important factors.

According to Greggory Warren, equity strategist at Morningstar, Blackrock total revenue was $17.8 billion in 2023. Of that, iShares equity ETF pulled in $4.41 billion and iShares fixed income tallied $1.23 billion (They don't break down alternative ETFs and multiasset class, but they are both relatively small.)

So the iShares ETF revenue was about a third of Blackrock's revenue, and Warren said that segment is still growing.

Revenue growth: Check.

Assets under management for Blackrock's ETF business was $3.85 billion, a number that has roughly doubled from the $1.79 trillion of ETF AUM announced five years earlier in November 2018. It appears this figure includes ETFs that listed and traded outside the United States, including London and Canada, but even excluding ETFs outside the U.S., Blackrock still has the dominant position in total AUM.

ETFs: Where the money is
Blackrock: $2.9 trillion
Vanguard: $2.7 trillion
State Street: $1.3 trillion
Invesco: $570 billion
Schwab: $360 billion
Remainder: approximately $1.5 billion

Source: ETF