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Own ≠ manage
BlackRock and Vanguard are two of the Big three passive fund asset management firms. The third, State Street, is owned by BlackRock -whose largest shareholder is Vanguard. It seems all roads lead to BlackRock.
BlackRock’s secret weapon, an advanced trading algorithm called Aladdin(Asset, Liability, Debt and Derivative Investment Network) has been shaping global markets for decades.
Aladdin is a program that executes an average of 250,000 trades per day and operates more than $21.6 trillion is assets
Aladdin executes trades in every asset class across every industry and directs the actions of the Federal Reserve and almost every major U.S. bank. It controls over half of all ETFs, 17% of the bond market, and 10% of the stock market.
It collects data points on every market, every company and every asset and uses machine learning to calculate which trades to execute.
The network that makes up Aladdin is approximately 5,000 supercomputers that now act as the central nervous system for the world’s most sophisticated investors and asset managers.
Every major bank and fund has come to rely on Aladdin and its all-powerful AI to beat the market, which raises several fundamental questions about the nature of our fragile financial system.
Food industry
Let’s take PepsiCo as an example, 72% of stock is owned by no less than 3,155 institutional investors. The top 10 of investors together amount to a value of $59 billion dollars, but out of those ten, only BlackRock, Vanguard & State street own more stock than the other seven.
In PepsiCo, Vanguard Group is currently the largest shareholder with 9.29% of shares And in BlackRock with 7.84%.In Coco-cola, Vanguard and BlackRock has 8.51% and 7.19 % respectively.
The other big companies that own a myriad of brand names like Unilever, Mondelez and Nestlé, General Mills, The Hershey, Kraft Heinz and many more are from the same group of investors.