BlackRock posted its Q4'​24 earnings and hosted its earnings call yesterday, and, as usual, made a number of comments on cash and fixed-​income CFO Martin Small comments, "BlackRock houses whole portfolio solutions for clients, the world'​s number one ETF franchise by assets, flows and breadth of exposures, a $​3 trillion fixed income platform across active and index, $​700 billion managed for insurance companies, over $​350 billion in models, direct indexing and SMAs for wealth managers, over $​900 billion in cash management AUM, leading advisory services and our proven Aladdin technology with $​1.​6 billion in revenues." He explains, "BlackRock cash management saw $​81 billion of net inflows in the fourth quarter and $​153 billion in 2024. Flows were driven by both U.​S. government and international prime funds and included multiple large new client mandates. We continue to see strong growth in our cash and liquidity platform built on our scale and integrated offerings with AUM up 20% year-​over-​year." CEO Larry Fink adds, "Clients holding cash on the sidelines missed out on a 25% total return in equities last year.... Long-​held investing principles need to evolve, including the traditional 60-​40 portfolio mix of stock and bonds." Asked about "Money in Motion," Fink replies, "​Let me just talk about the rate market. We'​ve been living in a world of the inverted yield curve, and you had the ability to earn the highest return, keeping your money in cash. Now you missed out on some great equity market movements. But as you notice, the yield curve is steepening. So you'​re going to over the time you'​re going to be benefiting by going out the curve. That being said, there is close to $​10 trillion of money in money market funds as that money will be put to work. And as I said, with the steepening of the yield curve and with higher rates, it'​s going to lead to some great opportunities in the fixed-​income area." Asked about fixed-​income flows, President Rob Kapito says, "A more balanced term structure of interest rates is an indicator that we'​re going to watch to indicate the potential demand for intermediate and longer duration fixed-​income. And this has been negative for years and now the U.​S. term premium has reached its highest level in a decade. Now we see that people are under-​allocated to fixed-​income -- we see that through our models business -- and we see that they'​re looking to increase their weightings in longer duration fixed income. And whether there'​s above market steepener or a bear market steepener, I do believe some of that large allocation to cash that Larry mentioned being around $​10 trillion is going to look for opportunities to increase their income. And with countries around the globe at deficits, there is going to be a lot of issuance, and you'​ll see the premium over treasuries be significant enough to move that money from cash into intermediate and longer-​term duration fixed-​income. So last year, we saw a strong demand. Our fixed income flows were $​164 billion in 2024. That'​s driven 6% organic asset growth and that included $​24 billion in the fourth quarter alone." He adds, "So the other part is the run-​up in equities last year actually over -- made them over-​allocated to equity, so they need to catch up in fixed income. So I think it continues to roll into cash, and then cash as rates change move into intermediate and longer duration fixed-​income paper."

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