BofA May Unload BlackRock Stake

Bank of America Corp. (BofA) may be divesting itself of its 34% share of BlackRock Inc., according to published reports.
 

The bank has decided that its 64.7 million common and preferred shares of BlackRock is not a core asset and is therefore considering reducing its holding.

The asset manager reportedly has the right of first refusal on any sale of the shares, valued at $9 billion. Although a lockup preventing the bank from selling the holding expired Sept 29, 2009, though there are still restrictions on how much BofA can sell at any one time, The Wall Street Journal reported.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

Bank of America acquired the holding in the asset manager through its purchase of Merrill Lynch (see “Bank of America Buys Merrill Lynch“). Merrill Lynch had acquired its stake in 2006 when the companies agreed to merge Merrill Lynch Investment Management (MLIM) with BlackRock to form a new independent investment management firm operating under the BlackRock name (see “BlackRock and Merrill Lynch Join Forces in Asset Management“).

Participant Transfers in July Remain Fixed Income Oriented

Despite the market rally, the direction of the total transfers in July remained fixed income-oriented, according to the results of the Hewitt 401(k) Index. 

Approximately $449 million (or 0.42% of total assets) moved from equities to fixed income investments during the month, with the majority coming out of company stock funds. Excluding company stock, only $169 million shifted from diversified equities to fixed income investments.   

Over three-quarters of the days in July experienced fixed income-oriented transfers.  

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

GIC/stable value funds received nearly half (46%) of the inflows, with $254 million transferring into this asset class. Bond funds received net transfers of $177 million, which represented 32% of the inflows.   

As international markets rallied (the MSCI EAFE Index rose 9.5%), international funds also saw inflows of $92 million, which reversed the trend of outflows since February this year, Hewitt said.  

Company stock funds experienced the largest outflows of the month, with $280 million transferring out of this asset class. Large U.S. equity also had significant outflows of $162 million, followed by small U.S. equity ($70 million). 

(Cont...)

Participants Contributed to Equities  

The Hewitt 401(k) Index showed participants' overall equity allocation was up by 1%, to 57.3% at the end of July, due to strong stock market performance. Employee-only equity contributions were virtually unchanged, with 60.1% going into equities, versus 60.2% in June.  

Lifestyle-premixed funds took in 24.5% of employee-only contributions, followed by GIG/stable value funds (19.16%) and Large U.S. equity funds (17.34%).   

On average, 0.03% of balances transferred on a net daily basis in July. There were above normal-levels of transfers on three days during the month.  

The Hewitt 401(k) Index is here. 

«