Back to top

Analyst Blog

According to a Financial Times report, BlackRock, Inc. (BLK - Analyst Report) plans to close nearly 250 funds from its existing range of products. This is a concerted effort to focus more on products that account for a higher proportion of revenues.

Recently, in its investor day conference, BlackRock announced that it manages over 7000 varied portfolios. Of these, the top 50%, comprising about 3000 fund vehicles, currently generates nearly 99% of the company’s total fund revenues. Subsequently, the bottom 50% of the portfolios contributes a meager 1%. Therefore, BlackRock is required to rationalize these funds in order to perform more efficiently.

Last year, BlackRock had closed nearly 250 funds in order to rationalize the bottom 50% of its portfolio. Further, the closure of an additional 250 funds in 2013 will result in the company shutting nearly 1/6th of its fund vehicles.

Alongside, in Mar, 2013, BlackRock announced around 300 job cuts, which equaled nearly 3% of the company’s total workforce as of Dec 31, 2012. The layoffs were a part of BlackRock’s reorganization efforts that included restructuring of its investment units.

Furthermore, BlackRock’s fund group has consolidated its Australian fund range. The company has closed over 90 portfolios. This equals to about 50% of various portfolios that the company offers to its clients in Australia. These factors have resulted in the strengthening of BlackRock’s position in Australia that will augment its growth.

The process of rationalizing the company’s portfolios is pivotal for BlackRock. This will help enhance the capacity and reduce complexity in the company’s business, which in turn will prove to be beneficial for BlackRock.

BlackRock currently carries a Zacks Rank #3 (Hold). Some better performing asset managers include Artisan Partners Asset Management Inc. (APAM - Snapshot Report), GAMCO Investors, Inc. (GBL - Snapshot Report) and Noah Holdings Limited (NOAH - Snapshot Report). All these carry a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SUPER MICRO… SMCI 26.71 +9.06%
CENTURY ALU… CENX 26.68 +6.81%
CANADIAN SO… CSIQ 37.58 +6.04%
BANCO DO BR… BDORY 16.42 +5.70%
GTT COMMUNI… GTT 12.89 +5.31%