BlackRock Inc ( BLK.N ), the world’s biggest asset manager, reported a better-than-expected quarterly profit on Monday, as client demand for index funds helped plump up margins and the company settled into a lower tax rate.

Net income attributable to the company rose to $1.07 billion in the second quarter, up more than 25 percent from $854 million a year earlier.

The company wrestled with difficult market and industry trends during the quarter, including an industrywide slowdown in the demand for its hottest product, exchange-traded funds (ETFs) that track markets.

BlackRock’s iShares-branded ETFs took in $17.8 billion during the quarter, down from $34.6 billion in the first quarter. The company also cut fees on some ETFs to increase its market share.

Yet even with the slower-than-usual growth in demand for the funds, which are relatively cheap to manage as they gain in size, revenue rose more than 10 percent to $2.9 billion from the prior year. Expenses grew 8.3 percent to $2.2 billion.

Operating income, a measure of profits after some expenses including employee pay, rose 16.4 percent to $1.4 billion in the quarter from the same period in 2017.

The company’s effective tax rate was 24 percent, down from more than 30 percent in the year-ago period, before a major U.S. tax cut was passed.

“Despite an industrywide slowdown in flows associated with investor uncertainty in the current market environment, our dialogue with clients and opportunities to provide long-term solutions are more robust than ever before,” said BlackRock Chief Executive Officer Larry Fink in a statement.

On a per-share basis, BlackRock earned $6.62, compared with $5.20 a year earlier.

Excluding items, the company earned $6.66 per share, while analysts expected $6.55, according to Thomson Reuters I/B/E/S.

BlackRock ended the quarter with $6.29 trillion in assets under management, down from $6.32 trillion in the preceding quarter.

The company said it attracted total “long-term” net flows of $14.50 billion in the period. That figure excluded money-market funds where investors hold cash temporarily.


Reporting by Trevor Hunnicutt in New York and Diptendu Lahiri in Bengaluru; Editing by Jeffrey Benkoe