BlackRock (BLK) Bank of America Securities Financial Services Conference summary

Macro and industry outlook

• Entering 2025 with strong momentum after $640 billion in 2024 flows and 7% base fee growth in Q4.

• ETF flows up by a third in early 2025; money fund flows flat; mutual funds continue outflows.

• Automation and generative AI are driving productivity and operating leverage.

• Clients remain optimistic, with early 2025 flows confirming continued investment appetite.

• U.S. exceptionalism persists, but international equities expected to catch up over time.

Fixed income and cash trends

• $160 billion in fixed income flows in 2024, with strong growth in fixed income ETFs.

• Clients favor spread and carry-oriented products over traditional duration.

• Normalized allocations depend on clarity in terminal rates and Treasury issuance.

• Institutional money market business remains robust, with $920 billion in cash AUM.

• FOMO and yield curve shape are driving re-risking into equities and substitution of private credit for public credit.

EPS growth strategy and business model

• Targeting 5%+ organic base fee growth through the cycle, driven by structural growers like ETFs and technology.

• Focus on operating leverage, disciplined capital management, and margin defense.

• Increased expense variabilization and automation to enhance P&L flexibility.

• Alternatives, private markets, and technology now comprise 20% of revenue, reducing market sensitivity.

• Recent acquisitions (GIP, HPS, Preqin) significantly change business mix and earnings diversification.