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BlackRock Keeps Getting Bigger But Fails to Meet on Revenue

  • Rakes in a record $74 billion for exchange-traded funds
  • But overall revenue fails to meet analysts’ expectations

It’s tough trying to be the of ETFs.

While BlackRock Inc. raked in $74 billion in exchange-traded fund flows in the second quarter, that record was in part obscured by revenue that failed to beat estimates. The revenue miss was largely driven by lower performance fees on two long-only funds that didn’t beat their benchmarks by as much as they did a year earlier and weaker securities lending revenue hampered by less merger-and-acquisition activity, said Chief Executive Officer Laurence D. Fink in an interview with Bloomberg.

Like Amazon did with online retailing, BlackRock got into the ETF arena early and has focused relentlessly on building its business by volume -- gathering as much investor money as possible. And just like Jeff Bezos, who ceded...