(DailyWire) BlackRock lost $1.7 trillion of its clients’ money since the beginning of the year — the largest sum ever lost by a single firm over a six-month period, according to a Wednesday report from Bloomberg analyst Marc Rubenstein.
Among BlackRock’s largest holdings are technology companies such as Apple, Microsoft, Amazon, and Tesla, according to filings with the Securities and Exchange Commission (SEC), even though technology firms were the first to lay off large portions of their staff as the stock market entered its months-long tailspin.
“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 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.”
Rubenstein attributed the loss to an increased reliance on passive investment, which tends to suffer during short-term declines in the stock market. “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,” Rubenstein wrote, observing that BlackRock’s “roots” lie in active fixed income.
BlackRock has also garnered attention for its embrace of Environmental, Social, and Governance (ESG) investing, which in turn has suffered in the current downturn. By adopting ESG goals — or, in the case of BlackRock, pushing portfolio companies into adopting ESG goals — executives commit themselves to pursuing green energy, appointing a certain number of minorities to serve as managers, or otherwise blending profitability with progressive politics.