BlackRock Inc. (NYSE: BLK) started with a small group of Wall Street professionals led by Laurence D. Fink in 1988. The company was founded under The Blackstone Group and focused on fixed income in its early beginnings. BlackRock developed the Blackstone Term Trust, which raised $1 billion and jump-started BlackRock's successful business. The BlackStone Group adopted the BlackRock name and had $17 billion in assets under management (AUM) in just four years. From its humble beginnings of just eight people in a room with a dream to build a great asset management firm, BlackRock has grown into the world's largest investment management company, based on its $4.6 trillion in assets under management as of Dec. 31, 2015. Additionally, BlackRock has grown from a small group of eight employees to over 12,000 employees and 135 investment teams in approximately 30 countries in under 30 years.
Founders and Executives
Four of the eight BlackRock founders remain at the company and operate as executives. Laurence Fink, who spearheaded the path of the firm, remains as chairman and chief executive officer (CEO) of BlackRock. Robert S. Kapito is the president and a director of BlackRock and responsible for oversight of the company's key operating units.
Barbara G. Novick serves as the vice chairman and a member of its Global Executive Committee and Enterprise Risk Management Committee. Additionally, Novick serves as the chair of BlackRock's Public Policy Steering Committee. Ben Golub is an executive of the firm. Dr. Golub is the chief risk officer, co-head of BlackRock's Risk and Quantitative Analysis Group, and a member of the Global Executive Committee.
BlackRock Mutual Funds Overview
Since BlackRock is the world's largest investment management company, it offers professionally managed exposure to multiple asset classes. BlackRock offers over 600 mutual funds, which have assets of $229.4 billion as of Dec. 31, 2015. BlackRock's mutual funds provide exposure to commodity, equity, fixed-income and multiple-asset funds. Moreover, it offers exposure to asset classes in emerging or developed countries. The strategies implemented by the mutual funds include active, indexing, college savings, income-generating and managed volatility. Some notable mutual funds that BlackRock offers include the Strategic Income Opportunities Fund, Equity Dividend Fund, High-Yield Bond Fund and Global Allocation Fund.
BlackRock generally requires a minimum initial investment of $1,000 and charges an average annual expense ratio. BlackRock's mutual fund family has consistently outperformed the average mutual fund family. As of Jan. 31, 2016, the firm's mutual funds have a total return of -2.8% year to date, while the category average has a total return of -3%. In 2015, BlackRock's mutual funds were down 0.4%, but they outperformed the category average by 1.8%. In 2014, the mutual fund family returned 4.8%, which was 0.5% greater than the category average. BlackRock's mutual funds returned 14.9%, which was 1% higher than the category average.
BlackRock iShares ETFs Overview
In addition to mutual funds, BlackRock offers exchange-traded funds (ETFs), which trade like common stock. BlackRock's iShares offers over 300 ETFs that provide exposure to the equity, commodity and fixed-income markets. The firm offers multiple strategies, such as currency-hedged, fixed-income, core and smart beta.
BlackRock's iShares currency-hedged ETFs help manage the effects of currency volatility. IShares offers bond ETFs, which generally carry a low degree of risk but offer steady income. Its core strategy provides thorough exposure to U.S., Canadian and foreign equities and bonds. BlackRock's smart beta ETFs provide investors with a low-cost investment strategy that seeks to provide returns greater than traditional benchmark indexes. Under the iShares umbrella of smart beta ETFs, it includes funds that provide minimal volatility, single factor, multiple factor, dividend-weighted, fixed-income and equal-weighted exposures.
BlackRock's largest ETFs include iShares Core S&P 500 ETF, iShares MSCI EAFE ETF, iShares Core U.S. Aggregate Bond ETF, iShares Russell 1000 Growth ETF and iShares Russell 1000 Value ETF. As of Feb. 16, 2016, these five ETFs have total net assets of nearly $200 billion, collectively.