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How’s it going, everyone? Today, we’re breaking down BlackRock: The world’s largest fund!
BlackRock is one of the largest and most influential financial institutions out there!
They own more than $9.5 trillion in assets. To put this in context, I’ll tell you that the U.S. GDP is $23 trillion.
How’d They Start?
Stephen Schwarzman and Larry Fink started Blackstone, but Larry later split away and founded BlackRock.
Blackstone remained in the private market and BlackRock went to the public market.
BlackRock’s main products are ETFs (Exchange Traded Funds) and mutual funds.
On this channel and blog, we talk a lot about private funds like venture capital, private equity, and real estate, but BlackRock is all about public funds.
Voting
Today, I could buy one share of a public company, like Apple, and gain 1 voting right.
The more shares I have, the more voting power.
ETFs and mutual funds are a bit different because investors have no voting power.
If you bought 1 share of an ETF, it’d be great because you’d then have a diversified investment, but you surrender your voting power.
So, BlackRock takes your money in exchange for a share, but they take your vote and vote for you.
A single vote may seem small but remember that they have $9.5 trillion AuM! That’s a lot of voting power!
BlackRock owns 5% of 97% of the companies in the S&P 500. This means they have an expansive influence!
Well, now you may be selfishly asking yourself…
How Does Their Influence Affect Me?
Be sure that people will act in their own self-interest.
At the end of the day, Larry Fink will make decisions and act on what will make Larry Fink the most money.
Let’s now cover 3 ways that BlackRock could possibly leverage their influence…
Politics
People are freaking out because BlackRock has clients in D.C.
But here’s what Lincoln said in his YouTube video:
“Political risk is real – the gov’t can always make a regulation that is potentially detrimental a business.”
When I visited the White House recently, there were board members of big companies like Intel, Microsoft, and Apple – all lobbying for the best interest of their companies – it’s just how the gov’t works.
Aladdin
BlackRock’s software is seen as this top-secret plan to take over the world.
In my opinion, it’s just great financial software.
They use it internally and also license it out to external portfolio managers.
Many people have conspiracy theories about it, but I don’t think it’s any different than Bloomberg.
ESG
Environmental Social Governance (ESG) is an effort to quantify subjective data.
It’s not too reliable because it’s so easily manipulated.
BlackRock is telling the world that they’re taking a stand for ESG, but their recent history shows they haven’t really done anything. It seems like they’re on the fence.
I don’t think BlackRock is looking to take over the world, to ruin the environment, or save the planet.
I think they are running a prestigious business the best they can and in their own self-interest.
Conclusion
So, there’s a timely analysis on BlackRock: the world’s largest fund.
With $9.5 trillion AuM and a heavy amount of influence, I believe they’re looking to grow, not to take over or destroy the earth.
I hope you enjoyed the read! Click here to see more videos on our channel!
Or, if you feel ready, reach out to the coaches at Fund Launch to get help launching your own fund!
That’s it for today!
Thanks,
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