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Source: The College Investor
Why does it seem like BlackRock owns everything?
This question concerns ETFs.
There are many rumors and conspiracy theories that BlackRock (NYSE: BLK), a large investment firm, owns a large part of the world we know. But somehow, it all happens in an opaque way. And BlackRock is usually lumped in with other companies like Vanguard, State Street, and others.
While these companies may not be household names, the reason their names appear so often in ownership reports is simple: These companies manage all of the mutual funds and ETFs that own shares of these companies.
BlackRock manages a staggering $10.47 trillion in assets as of the first quarter of 2024. With so many assets, does BlackRock really own everything? The short answer is no. But let's dig deeper into why and where this conspiracy comes from.
BlackRock owns everything – conspiracy
There are numerous videos circulating on social media showing that BlackRock is one of the largest owners of all companies on the stock market.
For example, if you look at the ownership report of Apple (NSQ:AAPL), you will see that BlackRock is the second largest owner of Apple shares, owning 6.91% of the entire company valued at $237 billion.
Apple Ownership Report as of June 30, 2024. Source: Yahoo! Finance
These reports have been highlighted in videos like this one, which has been viewed over 5.5 million times on TikTok:
Debunking the myth
At its core, BlackRock is tasked with managing assets on behalf of institutional investors, governments and individuals. Despite its massive balance sheet, direct equity investments by BlackRock itself represent a relatively small part of its business. Instead, its funds hold significant stakes in large companies, but those investments are tied to the clients who own the funds.
For example, BlackRock's iShares S&P 500 ETF is the third largest ETF in the world by assets. This single ETF represents about 5% of BlackRock's total assets.
Largest ETFs in the world as of September 25, 2024. Source: VettaFI
However, as an asset manager, BlackRock does not “own” the underlying assets. The ETF shareholders do. BlackRock is merely a manager of its clients' investments. They are not the true owners of the assets.
And when you look at the ownership reports of these ETFs, the picture changes quite significantly. The ownership of these ETFs (and mutual funds) is very spread out among smaller investment advisors, retirement accounts, and individuals.
Because in the end, every ETF owner actually owns his tiny fraction of the underlying investments.
Even in non-publicly traded investments such as real estate, BlackRock acts merely as a custodian for its investors – whether purchasing real estate, issuing or purchasing debt securities, etc.
So, at the end of the day, no, BlackRock does not own everything. However, because BlackRock is a large asset manager and manager of huge ETFs (which must invest in the underlying stock index), its name appears as an owner of most of the world's publicly traded companies.
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