Student activist, David Hogg, has added to his seemingly never ending list of firms to boycott. Yet again, the impetuousness of youth made him misunderstand the very nature of the business he is attacking. Yes, some Blackrock funds hold gun makers for the sake of index tracking. Some ESG related funds don’t. Clients of Blackrock and other funds get to choose what products they wish to invest in.
Paraphrasing what Blackrock’s Larry Fink said to CNBC on the matter, “we are just custodians of our client’s money. They decide what they wish to invest into and they can select from products that don’t hold gun manufacturers.”
Fink said the feedback from clients was a 95/5 ratio in favour of what Blackrock is doing with respect to investment offerings. As a $6.3 trillion AUM asset manager one wonders how much impact this boycott will have. If history is a guide then Blackrock and other funds will no doubt see a boost to assets under management thanks to Hogg’s boycott.
Or perhaps Fink should offer him an internship to learn about ESG.