Maybe the most overlooked part of Larry Fink’s annual letter is probably the most optimistic: That people need to get on the investment train or be run over by it.
That was On The Money’s takeaway from the BlackRock CEO’s yearly missive, among the most read pieces of CEO guidance in corporate America. Fink runs the world’s largest money manager, with $14 trillion in every asset class imaginable, giving him one of the best reads into the market and the global economy.
Of course, the headlines this week were more lugubrious. His worries about AI hit a chord (“there’s a real risk artificial intelligence could widen wealth inequality”) as did his comments about the retreat from globalization and “reshuffling” of trade.
No Wall Streeter I know likes Trump’s trade policy. Fink — who enjoys a warm relationship with the president as his former money manager– stopped well short of criticizing the White House’s use of tariffs to craft trade deals. Also noticeably absent: mentions of Environmental Social Governance investing, which got Fink in hot water with some red-state officials who believed BlackRock had joined the lefty-green lobby.
To be clear, Fink’s position on ESG was always more nuanced. BlackRock is an intermediary for investors large and small, tailoring investments based on client needs. What’s good for the Texas retirement system isn’t what’s good for the pensioners in NYC.(He’s told exactly that to blue-state officials complaining that BlackRock wasn’t radical enough on ESG, according to my sources).
On that note, this year’s letter focused on what Fink knows best: How Wall Street is an intermediary for Main Street as well. How the markets have been democratized to the point that average people can maneuver through the economy’s uncertainties – whether it’s AI or any disruptive technology – by socking a few bucks away and investing it.
Or as he put it: “History suggests that transformative technologies create enormous value … There’s a real risk artificial intelligence could widen wealth inequality if ownership does not broaden alongside it.”
Pie in the sky? Not at all. The Trump administration is taking steps to expand market access through so-called Trump Accounts. Exchange traded funds are a staple at BlackRock and they allow the average Joe or Jane to cobble together a portfolio of everything from the S&P to crypto. They’re liquid meaning you can trade out of them unlike those private equity investments being throttled by redemption windows.
Since the political backlash to his past ESG support in 2021-2022, Fink has done an amazing job, emphasizing BlackRock’s key role on Wall Street as a gateway for the emerging middle class. Assets under management are growing and shares of BlackRock are up nearly 30% over the past five years.
