Did you know that the world's largest asset managers own stakes in most of the world’s biggest businesses, with a combined R309 trillion in assets under management (AUM) which is 40 times larger than South Africa’s gross domestic product (GDP)?

Referred to as the two companies that own the world, BlackRock and Vanguard are the world’s largest asset managers. The two asset managers have their funds invested in all the biggest companies worldwide, with significant shareholdings in these companies. Vanguard and BlackRock collectively manage $16.7 trillion (R309 trillion), more than half the US debt of $31.6 trillion (R585 trillion).

BlackRock, Inc. (traded as BLK) was founded in 1988 by a group of investment managers. It is an American multinational investment company based in New York City. Initially as an enterprise risk management and fixed income institutional asset manager, BlackRock has become the world's largest asset manager, with US$9.42 trillion in assets under management as of June 30, 2023.

BlackRock operates globally with 70 offices in 30 countries, and clients in 100 countries. BlackRock is the manager of the iShares group of exchange-traded funds, and along with The Vanguard Group and State Street, it is considered to be one of the Big Three index fund managers. Its Aladdin software keeps track of investment portfolios for many major financial institutions and its BlackRock Solutions division provides financial risk management services. BlackRock, ranked 184th on the Fortune 500 list of the largest United States corporations by revenue, has sought to position itself as an industry leader in environmental, social, and corporate governance (ESG).

However, it has been criticized by some for investing in companies that are involved in fossil fuels, the arms industry, the People's Liberation Army and human rights violations in China. Others have scrutinized BlackRock for its efforts to reduce its investments in companies that have been accused of contributing to climate change and gun violence and its promotion of gender diversity; the U.S. states of West Virginia, Florida, and Louisiana have divested money away from or refuse to do business with the firm because of its ESG policies. The company has also faced criticism for its close ties with the Federal Reserve during the COVID-19 pandemic and for anti-competitive practices due to its significant ownership stakes in many companies.

The Vanguard Group, Inc. (commonly known as simply Vanguard), was founded in 1975 by John Clifton Bogle, who is the founder of index fund investing. It is an American registered investment advisor based in Malvern, Pennsylvania, with about $7.7 trillion in global assets under management, as of April 2023. It is the largest provider of mutual funds and the second-largest provider of exchange-traded funds (ETFs) in the world after BlackRock's iShares. In addition to mutual funds and ETFs, Vanguard offers brokerage services, educational account services, financial planning, asset management, and trust services. 

Several mutual funds managed by Vanguard are ranked at the top of the list of US mutual funds by assets under management. Along with BlackRock and State Street, Vanguard is considered to be one of the Big Three index fund managers that play a dominant role in corporate America. 

Founder and former chairman John C. Bogle is credited with the creation of the first index fund available to individual investors and was a proponent and major enabler of low-cost investing by individuals, though Rex Sinquefield has also been credited with the first index fund open to the public a few years before Bogle.

Sources: Daily Investor | Wikipedia 

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