BlackRock’s Fink: Robust U.S. recovery a year away
By Bloomberg | October 3, 2012 12:57 pm
“When you talk about macro issues in the U.S., our banking system is far better than most banking systems and our housing crisis is 90% behind us,” Mr. Fink said in an interview Monday from his New York office.
Mr. Fink has been urging investors for more than a year to buy equities as the U.S. economy expanded and the stock market rallied. On Wednesday, BlackRock started the third phase of a five-year branding campaign, with a series of advertisements telling savers to get out of cash and low-yielding bonds and suggesting they put money in high-quality stocks, exchange-traded funds and products that generate higher income.
BlackRock, which Mr. Fink co-founded in 1988 and then built through a series of acquisitions into a $3.56 trillion money manager, is seeking to expand by attracting assets rather than making transformational deals.
The U.S., the world’s largest economy, expanded at a 1.3% annual pace in the second quarter after growing at a 2% rate from January through March, Commerce Department figures showed Sept. 27. Federal Reserve officials see growth this year at 1.7% to 2%, according to forecasts released last month.
Some of BlackRock’s ads feature teachers and firefighters, reflecting the firm’s work with institutional investors, including pension funds. As of the end of 2011, more than 60% of BlackRock’s total long-term assets were managed for institutional investors.
Specific funds mentioned in the advertisements include the $891 million BlackRock Multi-Asset Income Fund, which has returned 11% this year, ahead of 55% of similarly managed funds, according to data compiled by Bloomberg. The $24 billion BlackRock Equity Dividend Fund, which is also highlighted, has returned 12% this year, trailing 57% of rivals.
“We think that equities are the place to be for the next several years,” Chris Leavy, a BlackRock managing director and chief investment officer for U.S. fundamental equity, said in a telephone interview. “We think they’re priced to return 9% to 10% a year because of cash generation through dividends and buybacks and modest profit growth.”