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BlackRock Is Now the 800-Pound Gorilla

Plus, Fidelity-iShares partnership a good deal for index investors, and more.

Morningstar Analysts, 02/08/2010

Now that BlackRock BLK has completed its acquisition of Barclays Global Investors, investors are now seeing just how big a player the firm will be in the asset-management industry--and could be in corporate boardrooms.

Even before the deal, BlackRock was sizeable. Now, with $3.35 trillion in assets under management at the end of 2009, it can claim the title as the world's largest money manager. About $1.9 trillion of that comes from BGI, which includes iShares, the largest ETF provider in the world. IShares commands more than 48% of the U.S. ETF industry market share with its 350-plus funds and more than $360 billion in assets. BlackRock also is one of the 10-largest traditional mutual fund managers in the United States with more than $100 billion in assets under management, up from about $77 billion at the beginning of 2009.

Now that BGI and BlackRock are one, BlackRock has started to file consolidated financial disclosure forms with the Securities and Exchange Commission. According to various media sources, last Friday, BlackRock filed more than 1,500 13G forms with the SEC. A 13G form is similar to Schedule 13D, which is used to report that an investor owns more than 5% of a company.

These ownership forms were filed for some of the largest Fortune 500 companies. The Wall Street Journal reported BlackRock now owns 5.6% of Apple AAPL, 5.2% of Microsoft MSFT, 5.9% of Google GOOG, and 6.3% of Hewlett-Packard HPQ.

BlackRock even owns 5.76%, or about 10 days of trading volume, of ExxonMobil XOM, one of the largest publicly traded companies in the world, with a market cap of more than $300 billion.

BlackRock also filed a 13G for Goldman Sachs GS and Morgan Stanley MS, two financial-services firms that have been in the headlines lately for their executive compensation practices. BlackRock says it owns about 6.2% of Goldman and 5.4% of Morgan Stanley.

Investors may want to start sending complaints and ideas about financial industry compensation to BlackRock instead of to their elected representatives.PAGEBREAK

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Nassim Taleb, author of The Black Swan, made headlines recently by arguing "every single human being" should short U.S. Treasury bonds, calling the trade a "no-brainer." Taleb cited the inflationary policies of Federal Reserve Chairman Ben Bernanke and officials in the Obama administration in his reasoning.

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