BlackRock and other major asset managers set corporate America’s policies based on the money they receive from clients, which is frequently the retirement and pension funds of average American investors. Now, the investment giant BlackRock has lost $1.7 trillion of this money in six months.
According to a report released on Wednesday by Bloomberg analyst Marc Rubenstein, BlackRock has lost $1.7 trillion of its clients’ money since the start of the year, the highest amount ever lost by a single company in a six-month timeframe.
According to Securities and Exchange Commission (SEC) records, among BlackRock’s biggest investments are tech giants like Apple, Microsoft, Amazon, and Tesla, despite the fact that these businesses were among the first to fire significant numbers of employees as the stock market began its protracted decline.
“The first half of 2022 brought an investment environment that we have not seen in decades,” BlackRock CEO Larry Fink said in the company’s second quarter (read below) earnings report. “Investors are simultaneously navigating high inflation, rising rates and the worst start to the year for both stocks and bonds in half a century, with global equity and fixed income indexes down 20% and 10%, respectively.”
The loss, according to Rubenstein, was caused by a greater reliance on passive investments, which often struggle amid sharp drops in the stock market. According to Rubenstein, who noted that BlackRock’s “roots” are in active fixed income, “BlackRock is increasingly giving up: At the end of June, only about a quarter of its assets were actively managed to beat a benchmark — rather than track it seamlessly as passive strategies are designed to do.”
In addition, BlackRock has drawn attention for promoting environmental, social, and governance (ESG) investing, which has suffered during the current recession. Executives commit themselves to pursuing renewable energy, selecting a specific percentage of minorities to work as managers, or otherwise fusing profitability with progressive politics by embracing ESG goals — or, in the case of BlackRock, pressuring portfolio businesses to embrace ESG goals.
For instance, the ESG Aware MSCI ETF from iShares, which invests primarily in Microsoft, Alphabet, and Tesla, has declined 18 percent since the start of 2022, which is significantly less than the S&P 500 index as a whole. Exxon Mobil, Chevron, and Shell dominate the Global Energy ETF offered by iShares, which has increased by almost 25% over the same period.
BlackRock said in a May report outlining its “firm-wide” ESG initiatives that it aims to “engage with investee companies on ESG issues to enhance long-term value.” In fact, Fink stated in 2017 that he wanted to shift corporate America’s course toward progressive outcomes. In reference to Blackrock’s ESG score methodology, he claimed, “At Blackrock we are forcing behaviors.” “You have to force behavior and if you don’t force behavior whether it’s gender or race or any way you want to say the composition of your team, you’re going to be impacted.”
BlackRock is one of the most significant asset managers in the world, holding shares in Apple, Microsoft, and Amazon totaling 4.2 percent, 4.5 percent, and 3.6 percent, respectively. The three companies have been eager to work together to use their combined influence for progressive goals, such as adding three environmental activists on the 12-person board of oil tycoon Exxon Mobil. Together, their holdings give them an average 20 percent ownership in every Fortune 500 business.
In essence, BlackRock and other major asset managers set corporate America’s policies based on the money they receive from clients, which is frequently the retirement and pension funds of average American investors. Although 64 percent of respondents indicated they thought “individual investors whose savings are being invested” should ultimately select whether retirement funds and pension plans are allocated in accordance with ESG criteria, the results of an exclusive Daily Wire poll conducted by Echelon Insights earlier this year support this view. Only 20% think that “Wall Street asset managers” should be the ones making such judgments.
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Chairman Fink and his board have a tough choice: Stay with ESG “idealism” or realize the majority of investors COULDN’T CARE LESS about progressive priorities. But if BR is losing money, what do you suppose is happening to everyone ELSE?