BlackRock Sees Model-Portfolio Investing Growing to $10 Trillion by 2028
BlackRock Inc. expects the model-portfolio realm of money management to grow to a $10 trillion business over the next five years.
The strategy, by which asset managers and investment platforms compile ready-made packages that are then sold to financial advisers, is set to grow from around $4.2 trillion currently, according to Salim Ramji, global head of iShares and index investments at the asset manager.
“It’s going to be massive,” he said on Bloomberg Television’s ETF IQ on Monday. “It’s the way in which more and more fiduciary advisers are doing business, and, as a result, that’s the way in which we’re doing business with them.”
Model-portfolio investing is a booming corner of money management, with BlackRock and many of its competitors, including Vanguard and Charles Schwab, benefiting from the popularity of bundling funds into ready-made strategies. Allocation shifts in model portfolios, which usually package ETFs and other funds into these off-the-shelf parcels, are sometimes suspected to be behind dramatic flows of money.
Model portfolios make up a “massive” part of the iShares business, Ramji said. About two years ago, they comprised about a third of its US flows — last year, they grew to more than half.