BlackRock, Inc. (NYSE:BLK) is up 2.3 percent in pre-market trading after reporting strong Q4 earnings. Below is an initial report from Eric N. Berg, Kenneth S. Lee, and Bulent Ozcan of RBC Capital.

BlackRock, Inc. (NYSE:BLK) reported a December quarter that on first glance to us looked very strong. To be sure, the net flows into the company’s coffers, which seemed exceptionally strong at $40 billion, were dominated by iShares, which had nearly $20 billion of net inflows. We say “to be sure” because the iShares products tend to be lower-fee products than BlackRock’s actively managed equity and fixed income capabilities. But the iShares are also highly scalable – and thus high margin. And as a general statement we would say that BlackRock enjoyed success in the quarter across the board. Items we’d highlight:

BlackRock

Total inflows of $40 billion. Positive net flows across all three major client types: retail (net flows of $17 billion), iShares (net flows of $19 billion), institutional (net flows of $4.8 billion).

Revenues were 9 % year over year, operating income rose 10% year over year, and the operating margin at the company increased 10 basis points year over year and 150 basis points sequentially, to 42.7 %.

The number most investors and analysts focus on, as-adjusted EPS, came in at $4.92 versus $3.96 in the year-earlier quarter.

Net inflows took place in all three regions: the Americas, EMEA, and Asia Pacific. It was interesting to us that the positive flows on the active side of the business were especially strong in BlackRock’s retail business. Active equity and fixed income were not nearly as strong on the institutional side of the house.

Of no surprise, the iShares business was dominated by equity inflows (more than 100%, at $24 billion versus $19 billion). What seems to be going on is that retail investors are homing in on positive strategies in general and on passive equity strategies in particular. Passive fixed income (again, no surprise) seems to be dormant.

Within the world of active investing, multi-asset investing continues to be a standout. These are unconstrained arrangements in which portfolio managers are free to venture pretty much wherever they want, into multiple asset classes. Multi-asset dominated the retail flows ($6.5 billion out of $17 billion), and multi-asset dominated the institutional flows as well ($12 billion out of $8 billion).

All in all, it seemed preliminary a very strong quarter for BlackRock, characterized by strong organic growth, improving profitability and above all balance and diversification.