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Happy Holidays, everyone! Today, I want to tell you how to beat the 3 giants dominating the financial world: BlackRock, State Street, and Vanguard. These three companies control more than half of all shares in the S&P 500, with a combined value of over $30 trillion—larger than most countries!
This influence extends far beyond the stock market. These companies are buying up single-family homes, apartment complexes, farmland, and even news and media networks. If we don’t figure out how to stop them or play their own game, we may find ourselves at their mercy in the coming decades.
Click here to see my YouTube video!
Understanding the Fund Model
A fund is a pool of money funded by investors (LPs). The money managers (GPs) draw from that pool and allocate the capital into different investments. The returns from these investments flow back into the pool (fund) and are distributed to the investors and managers.
When the model functions effectively, it generates immense wealth for the GPs, making them some of the richest people in the world. This model works for stocks, real estate, crypto, or any asset class.
BlackRock, State Street, and Vanguard have grown—and continue to grow—because of this fund model. The founders recognized this model as the perfect vehicle to compound growth over time.
The Rise of BlackRock
BlackRock had an explosive start, growing from $5 million to $8 billion AUM in just five years! Today, they manage $9 trillion, making co-founder and CEO Larry Fink one of the most powerful men in the world. His initial focus was on risk management and fixed-income strategies, but he soon shifted to ETFs (exchange-traded funds).
As I mentioned in my YouTube video, "ETFs have become one of the most popular tools around the world for financial professionals; even the S&P 500 is an ETF!"
Vanguard: A Disruptive Force
Vanguard currently manages $7.7 trillion and had similar beginnings to BlackRock, quickly growing due to the ETF boom in the 90s. Vanguard disrupted the market by introducing low-cost ETFs, while competitors were still charging high fees.
Because of their cost-effective, low-fee, and diversified approach to investing, they currently run 203 US funds and 227 global funds, with an investor headcount of 50 million!
The Legacy of State Street
Founded in 1792, State Street is the second-oldest US bank, established during George Washington's second election. They made their mark by issuing some of the first US mutual funds in the 1830s and gained prominence on Wall Street after launching the S&P 500 ETF.
Some argue that simply controlling an ETF poses no danger, but I beg to differ. Imagine if Disney’s three biggest stockholders—BlackRock, State Street, and Vanguard—told management to push a certain agenda. Disney would either conform or go out of business! Yes, this has happened to Disney, but thousands of other companies are equally affected.
The Solution: Launch Your Own Fund
I’m all for capitalism, but monopolies are not good! I believe the solution lies with you and me. By launching new funds into the marketplace to decentralize Wall Street, we can prevent a monopoly. The more competitive the market, the better off the consumer will be!
So, how do we beat the 3 giants? Launch your own fund(s)! Visit Fund Launch to get 1-on-1 coaching, or check out my other videos on my YouTube channel!
Thanks for stopping by,
Want to get direct guidance for your fund? Schedule a time with my Fund Advisors!
DISCLAIMER: This content is for educational and informational purposes only. It is not to be taken as tax, financial, or legal advice. You should always consult a legal professional before taking action. Furthermore, this is not a recommendation to buy or sell any security. The content is solely just the opinion of the author
