BlackRock has been a dominant force in the investing world for more than two decades. The fund was founded in 1988 by Larry Fink and a group of partners focusing on fixed-income investing. Today they manage a portfolio worth almost $4 trillion, which makes them the biggest player in the industry. This results in a frequent question that is popping out all over the internet "What does BlackRock Own"?
BlackRock’s portfolio consists of 5,374 positions, while the top 8 holdings are Magnificent Seven technology sector stocks (including two classes of Google stocks). The largest holding has been for some time now Microsoft (MSFT), followed by Apple, Amazon, Nvidia, Alphabet (GOOGL), Meta, Alphabet (GOOG) and Tesla.
The fame of BlackRock is not only based on the parameters of success but also on setting new standards of investment strategies and methods of evaluation. Finding potential in companies and identifying emerging trends is what sets them apart from the beginning. Today, they are often compared with the largest owners in the world, with their capital reaching every corner of the globe.
Key Holdings
Microsoft Corp. (NASDAQ:MSFT) with 5.19% of the portfolio
Microsoft is one of the longest and most crucial elements of the BlackRock portfolio. It is one of the companies that brought them wealth and fame. They managed to recognize their potential as a groundbreaking technological innovator which proved to be a great pick. Currently, they own 539 million shares, which are valued at $202.66 billion. The average trading price of all their shares is at $85.6 while today, the price is at $399. This means that this price is 366% higher than the average buying price.
Apple Inc. (NASDAQ:AAPL) with 5.14% of the portfolio
Just like with Microsoft, BlackRock accomplished the same with Apple. The potential for greatness already existed, but Apple managed to see it through and become one of the largest and most innovative companies in the world. In BlackRock’s portfolio, there are 1.04 billion Apple shares worth $200.69 billion. The average buying price of their stock is $37.15 while over time it skyrocketed reaching $165. The sheer measure of success is immense because the stock price increased over 344% from an average buying price.
Amazon.com (NASDAQ:AMZN) with 2.44% of the portfolio
With 627 million Amazon shares owned Blackrock holds 6.1% of all outstanding companies shares. The holding is valued at $95.29 billion, while the average stock buy price is $60. Amazon stock gained value immensely reaching $175. This is a 190% increase from the historical average buy price. BlackRock significantly increased this holding since Q4 2022 going from 594 million shares to the current 627 million shares.
Nvidia Corporation (NASDAQ:NVDA) with 2.28% of the portfolio
With Nvidia stock in high demand, it is worth remembering that BlackRock saw this trend coming. They recognized Nvidia’s innovative AI potential and they are the second largest stake owner of the company, right behind Vanguard Group. Translated into stocks this results in owning 179.68 million stocks of this tech giant. The value of the holding is at $88.98 billion, coming after a recent almost 10% drop. Nonetheless, since the fund bought Nvidia shares at $50 on average, they still made massive gains. When looking at percentages, the price jumped by 1417% from their average buying price.
Alphabet Inc. Class A (NASDAQ:GOOGL) with 1.48% of the portfolio
Like with Nvidia, BlackRock is the second largest shareholder after Vanguard. At the moment the fund owns 415 million Class A stocks valued at $57.97 billion. They were buying Google Class A stocks on average of $48 while the price moved upwards by 220%. Currently, the stock price is at $156 and has seen a steady rise in the last two years.
Meta Platforms (NASDAQ:META) with 1.43% of the portfolio
We already can conclude that the largest stakes in the BlackRock portfolio are highly innovative tech stocks. Meta is just one of their favorites that they recognized early on, and stayed with them during both good and bad periods. BlackRock owns 157.51 million Meta’s shares and they bought it at an average of $144.45. The current value of Meta stocks is $481 which means that the average buying price is 233% lower.
Alphabet Inc. Class C (NASDAQ:GOOG) with 1.28% of the portfolio
Besides owning a massive stake in Class A stocks, Blackrock also owns 355.43 million Class C Alphabet stocks. The value of this holding is at the moment $50.09 billion. The average buying price of GOOG stocks for BlackRock was $43.78 while the present value is at $158. This is one of the clearest winners in the extensive BlackRock portfolio since the stock value jumped 255.7% from the average buying price.
Tesla Inc. (NASDAQ:TSLA) with 1.20% of the portfolio
Tesla is the only underperformer in Blackrock's top 10 holdings. In July 2023 the stock reached its high at $293, and since it has been dropping to $142. BlackRock still recognizes Tesla as one of the innovative leaders on the market and keeps a solid stake in the company. They own 18.18 million shares which are valued at $46.76 billion. They still managed to get a solid return since the average buying price was $100.
Broadcom Inc. (NASDAQ:AVGO) with 0.99% of the portfolio
Broadcom is the largest holding out of the Magnificent Seven group in BlackRock’s portfolio. This major manufacturer of semiconductors and software infrastructure products is a regular part of their portfolio. BlackRock owns 34.70 million stocks valued at $37.73 billion. Although this is not a major holding, it still managed to deliver impressive results. BlackRock has been buying their stocks at $345 on average while their present value is at $1.218. This is a massive 250% increase from the average buying price.
Unitedhealth Group Inc. (NYSE:UNH) with 0.98% of the portfolio
This health insurance company takes 10th position in the BlackRock Inc. portfolio. Their 72.38 million shares are valued at $38.10 billion. The average buying price of UnitedHealth stock was $201 while the price rose to $495.80. This is an increase of almost 150% to the average buying price.
Besides their stock holdings, BlackRock has massive options holdings, with the majority being on the call side. The largest call option holdings include:
- SPDR S&P 500 ETF (SPY) with 7.84 million shares valued at $3.73 billion.
- SPDR Gold Tr (GLD) with 7.24 million shares valued at $1.38 billion.
- Invesco QQQ Tr (QQQ) with 2.50 million shares valued at $1.02 billion.
Significant put options include:
- SPDR S&P 500 ETF (SPY) with 2.10 million shares valued at $996.9 million.
- iShares Ty (LQD) with 6.80 million shares valued at $752.49 million.
- iShares Ty (HYG) with 8.02 million shares valued at $620.78 million.
Sector Allocation
BlackRock keeps a highly diversified portfolio among different asset classes. They are focused on current sector innovators and leaders. Technology and Consumer Discretionary holdings represent the largest chunks of the portfolio, and this is the current sector allocation of Blackrock Inc:
- Technology with 30.4% of the portfolio valued at $1,192,271,537,931.536 trillion
- Consumer Discretionary with 19.4% of the portfolio valued at $760,857,494,601 billion
- Healthcare with 11.7% of the portfolio valued at $458,867,664,269.7 billion
- Finance with 11.1% of the portfolio valued at $435,335,989,178.9 billion
- Industrials with 9.33% of the portfolio valued at $365,917,547,661.2 billion
- Real Estate with 3.74% of the portfolio valued at $146,680,774,732.3 billion
- Energy with 3.34% of the portfolio valued at $130,992,991,338.5 billion
- Utilities with 2.98% of the portfolio valued at $116,873,986,284 billion
- Consumer Staples with 2.71% of the portfolio valued at $106,284,732,493.2 billion.
BlackRock's Investment Approach & Strategies
The core principle of BlackRock’s investment strategy is its detailed and insightful evaluation approach. It combines a quantitative model-driven process with human evaluation of every investment target.
Massive amounts of data that can be analyzed today play a big role in making investment decisions. The use of data-driven techniques allows the fund to analyze those data, construct the portfolio, and manage risk.
BlackRock’s algorithm analyzes data to identify different factors including market trends, economic indicators, and macro and political influences. The use of big data, combined with machine learning technology allows the fund to track a potentially lucrative trend that has yet to be identified by competitors.
The three pillars of BlackRock’s strategy work as a guide if anyone would want to try and achieve similar success. Those pillars are:
Diversification
By investing in different asset classes and industry sectors, the fund aims to minimize potential losses.
Research and analysis
Without reaching reliable data sources it is impossible to conduct a meaningful analysis. With the correct data, the fund can properly analyze it and make meaningful investment decisions.
Long-term vision
BlackRock is not keen on making short-term gains. The results of their extensive research are to invest in a company that can generate long-term gain. They view investing as a marathon, and not as a sprint.
Benefits of Investing in BlackRock's Model Portfolio
Investing in BlackRock’s model portfolio comes with three groups of benefits.
Focus on diversification and risk management
Blackrock model portfolios are designed with an emphasis on diversification and risk management. Their portfolio encompasses the leaders of industries that are focused on innovative goals.
When investing in already big names that are benefiting from their dominant position that as a result brings the risk down. Also, portfolios with these holdings have better chances to generate compounding returns, which is always on the plus side.
Risk management is an essential component of every investing plan, and BlackRock knows how to handle it. Since they are investing in all major industry sectors investment risk is thinly spread along the market. In case that there is turmoil in a specific industry that in most cases does not leave a mark on the entire portfolio.
Everyone can find a suitable way to invest
If you decide to invest in Blackrock model portfolios you will be able to choose all the important inputs. Blackrock offers a wide array of portfolios with different strategies and risk management practices. Between them, you will for sure find an approach that is suited to your goals and needs.
Professional and experienced management
When clients are placing capital into investing one of the crucial elements is the management of the investment. A bad track record or history of shady or untransparent operations is an instant turn-off for every investor.
However, when investing with Blackrock Inc. funds, your investment is handled by top professionals. Portfolio managers are at the top of their class, which can be a certain guarantee of good performance and future expectations.
Comparison with Competitors
Some of the top BlackRock competitors are Vanguard, State Street Corp, Fidelity, and Goldman Sachs. Each company has its strong and weak sides, and those sets them apart. As main competitors in the market, they often borrow ideas from each other trying to beat each other to better results.
Strengths
Vanguard is often regarded as the prime BlackRock nemesis. Although it is a firm with a longer tradition, BlackRock managed to stay atop. Often, they capitalized on Vanguard’s original ideas, putting them to better use.
This has especially been the case with Vanguard’s approach to low-cost investing that is available to all. BlackRock adopted this idea and managed to better utilize it in practice. Another important factor is the focus on innovation. Vanguard is seen as a leader in innovations in the investment sector, but BlackRock has found a way to implement them more efficiently.
BlackRock manages to stay ahead of some of the key competitors like State Street. This giant in the financial industry works both as a bank and as an index fund. This can be interpreted as a strength and a weakness, but handling risk from both perspectives can prove to be challenging. At the same time, BlackRock doesn’t offer banking services, focusing on investing.
Regarding Goldman Sachs, another key player on the market, it is frequently pointed out to their crumbling ethical standards over the years. With it came accusations of poor working conditions, and also its impact on sparking the 2008 economic crisis.
Weaknesses
Being on top of the sector often magnifies every bit of weakness, including BlackRock’s somewhat poor organizational structure. A major issue that is often stated is a high staff turnover rate. Teams that do not have time to create something unique can be off-putting for investors and can point to a bad organizational climate.
Another noted downside of BlackRock’s investment approach is its focus on experienced investors and corporate entities. On the other hand, a major competitor Fidelity offers a more hands-on approach to novice investors who are ready to place their trust into portfolio managers.
Although BlackRock's reputation is high, in recent years it has been deteriorating. It was accused of several ethical issues, including embedding with government insiders. Also, it was often referred to as a fourth branch of the government resembling a shadow government.
Comparison of BlackRock's Holdings with Competitors
Going through portfolios of the highly comparable competitors from the industry we concluded that they share several key points. Leaders in the finance sector have similar portfolios that are focused on established and well-known names.
All of BlackRock's competitors have strong stakes in the Magnificent Seven companies, followed by major medical players like Ely Lilly and UnitedHealth. Top pics also include financial giants Visa and Mastercard.
Final Thoughts
As an independently managed public company with no majority stake owner, with the largest AUM in the market, BlackRock has become the single largest financial institution in the world. It has stakes in all companies worth having a stake in while maintaining substantial stakes in the Magnificent Seven group of companies.
BlackRock’s approach to investing is wide and it can offer something to almost everyone. If you are an individual or institutional investor, with more or less experience, there is an investment plan for you.
What may become a problem in the future is BlackRock’s reputation which is taking a solid hit. The company developed an aura around its operations that reflects the making of an owner from shadow. BlackRock is often commented as the owner of almost everything, and that it can make an impact on the world scale. Regarding its investment model, it is a winning combination which can be seen from its results.
