Blackrock 3Q15 Earnings Call Notes

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Laurence Douglas Fink – Chairman and Chief Executive Officer

We’ve made several recommendations with respect to equity market structure based on what happened on August 24

Extreme market volatility resulted in a disjointed market open on August 24. Lack of pricing clarity, widespread delayed in stock openings and an unprecedented number of trading halts impacted a large number of both U.S. listed single name stocks and equity ETF.

We’ve spoken with many different market participants and based on our own experience and these conversations we have made several recommendation with respect to U.S. equity market structure in a viewpoint article titled “U.S. Equity Market Structure Lessons from August 24th”, which we published on our website last week.”

Asia has been dominated by 3 or 4 large institutions moving around, the whole ecosystem

“there are some very large movements from some clients that are actively moving out of government securities into more risk oriented securities that’s pretty well advertise without me going into the specifics of that. We have seen some clients because of cash needs have been selling products. So I think Asia-Pac has been dominated more by three or four large institutions moving around. I think I’m talking about the whole ecosystem of the markets.”

Let’s not make retail products less competitive than institutional ones via regulation

“The one cautionary thing we would say to any regulator. Let’s not make retail products less competitive than institutional products. So, for instance if they suggested that a mutual fund product should have a higher cash buffer and that would probably mean most institutional clients would move to a separate account, we may not achieve what we’re trying to achieve. ”


Robert Kapito – President

People are buying ETFs for precision and liquidity, not just price

“we are the leader in U.S. ETF in the smart beta area. But just to step back on the price, please keep in mind that prices are only one reason why people buy ETF. They are looking for precision or what you’re discussing a new approach in smart beta or factored investing, they’re certainly looking for liquidity, which means, you have to have a fund and have some sort of size depending upon the type investor they could get core investor which we call it buy and hold or they are looking to be more active.”

Real clients are going to use the opportunity of higher rates to buy longer dated assets

“As interest rates rise, if they rise, I think they will rise one day. We are actually going to see an accelerated movement towards clients buying longer duration assets. And that’s I mean, I’m not talking about trading strategies, but clients that are pension fund oriented or long dated insurance type of products, they’re going to use this as an opportunity to buy different long dated assets. ”