Explosive growth rates will continue in exchange traded fund assets this year, even though some economic numbers could be weak.

That was the prediction of a Black Rock official, who said that 2014 will be a slow-growth year, one with slightly higher interest rates and global political uncertainty that could spook markets as well as managers seeking better alpha.

Yet these are all factors, says Daniel Gamba head of iShares Institutional Business at Black Rock, that will help the growth of ETFs.

“ETFs will increasingly be at the core of portfolios,” according to Gamba, noting some managers are now buying ETFs to replace individual bonds. “We actually have just scratched the surface,” he added. Black Rock officials also said they expected strong growth in fixed-income ETFs in part because many institutional money managers don’t have the resources to review individual bonds.

Black Rock, an asset manager investment advisor that sells iSharesETFs, last year had some $40.5 billion in first time flows and its total assets under management passed the $4 trillion mark, reaching $4.32 trillion at the end of the year. Gamba said the ETF industry grew by 26 percent year to year. A large part of this rapid asset growth has come from alliances that Black Rock has with Fidelity and Schwab.

“In 2013,” Black Rock said in a statement, “non-market-cap-weighted equity ETFs contributed a record $51.45 billion of inflows globally. iShares expects the interest in non-market-cap-weighted ETFs such as factor ETFs or minimum volatility ETFs to continue in 2014. We believe factor and minimum volatility will see above-average market asset growth, given broader acceptance from global pension plans, government institutions, asset managers and registered investment advisors.”

Gamba added that new partnerships have been “a substantial area of growth for us.” Mark Miller, who manages U.S. Pension, Foundation & Endowment business for Black Rock iShares. He also said low interest rates are pushing lenders and investors to use “ETFs to get better alpha.” Black Rock officials also noted they are looking to fixed-income ETFs as an alternative to bonds with little yield. They pointed to a Greenwich Associates study that found that 55 percent of all types of large institutions and RIAs used domestic fixed-income ETFs last year.

In 2013, Black Rock also entered into a partnership to manage retirement assets for the state of Arizona. Gamba said Black Rock is selling and advising ETFs on both a tactical -- three to six months -- and strategic basis, six years or longer. He added that hedge funds are looking to ETFs because of their liquidity. Where does all this ETF growth come from?

Gamba says the majority of growth is coming from a new way of looking at market technology.

“What is really happening is that managers are changing the ways of managing money. Instead of managing money as stock pickers, they are managing money as part of an asset-allocation approach. This is a fundamental change,” Gamba said. Eventually, he added, there will be more trading of ETFs than individual equities.

The asset management part of Black Rock’s iShares grew by 32 percent last year, according to Hilary Corman, co-manager of the asset manager/hedge fund/family office manager channel. She said switching to ETFs can provide enough additional basis points that “can dramatically change a manager’s Morningstar ratings.”