BlackRock Inc. (BLK)’s Laurence D. Fink, who has been trying to persuade retail investors to get out of cash, said the U.S. is about a year away from having a more robust economy.
“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 percent behind us,” Fink, chairman and chief executive officer of the world’s largest asset manager, said in an Oct. 1 interview from his New York office.
Fink has been urging investors for more than a year to buy equities as the U.S. economy expanded and the stock market rallied. BlackRock today 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 Fink co-founded in 1988 and then built through a series of acquisitions into a $3.56 trillion manager, is seeking to expand by attracting assets rather than making transformational deals. Fink has added top executives such as Philipp Hildebrand, the former head of the Swiss central bank, to help expand relationships with institutional clients overseas, and Linda Robinson, who joined as head of marketing and communications last year and oversees the branding campaign.
BlackRock started running ads in February, telling investors how to allocate their money in an uncertain market. Fink and other executives have said publicly that investors need to diversify and can be harmed by staying in cash-like products.
“We’re in a world of moments of euphoria and moments of despair,” Fink said. “It’s very hard for anyone to get out of the bunker and do anything more pro-actively.”
The U.S., the world’s largest economy expanded at a 1.3 percent annual pace in the second quarter after growing at a 2 percent rate from January through March, Commerce Department figures showed Sept. 27. Fed Reserve officials see growth this year at 1.7 percent to 2 percent, according to forecasts released last month.
The U.S. benchmark Standard & Poor’s 500 Index (SPX) has risen 15 percent this year and the MSCI ACWI Index of global stocks has increased 11 percent.
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 percent 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 (BAICX), which has returned 11 percent this year, ahead of 55 percent of similarly managed funds, according to data compiled by Bloomberg. The $24 billion BlackRock Equity Dividend Fund (MDDVX), which is also highlighted, has returned 12 percent this year, trailing 57 percent of rivals.
“We think that equities are the place to be for the next several years,” Chris Leavy, BlackRock’s chief investment officer for U.S. fundamental equity, said in a telephone interview. “We think they’re priced to return 9 percent to 10 percent a year because of cash generation through dividends and buybacks and modest profit growth.”
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