Vanguard, BlackRock Map Out Global ETF Ambitions

Vanguard flew its chief executive Salim Ramji to London this week for a large client gathering with around 400 guests, one of a series of events marking the 50th anniversary of the business founded by Jack Bogle.

Ramji was unable to attend the media reception following the client meeting held at the Frameless art gallery near Marble Arch, but several other members of the senior leadership team, including Jon Cleborne, head of Europe, and Joe Davis, who wears two hats as global chief economist and global head of the investment strategy group, were present.

The effervescent Davis discussed how artificial intelligence and other megatrends, such as demographic changes, geopolitical tensions and rising government debt, would shape investing and asset allocation choices, the theme of his new book "Coming into View."

He also revealed that Vanguard already employs more than 1,000 AI applications across its business, including core investment functions.

Vanguard Leads in Global Flows

Opportunities for the press to meet Vanguard’s top leaders are tightly controlled, which is curious given Ramji is an accomplished public speaker overseeing remarkably strong new business growth. Vanguard’s ETFs registered $147.7 billion in global net inflows already in the first four months of this year, ahead of its main rival BlackRock, which gathered $114.7 billion in worldwide new ETF business, according to data provider ETFGI.

And Vanguard’s oft-repeated core message, “markets change, stay the course,” has again been shown to be effective advice with the S&P 500 rebounding more than 20% and entering a new bull market since its low after President Donald Trump’s trade tariffs were unveiled on “Liberation Day.”

Vanguard has historically taken a distinctly low-key approach to promoting its business, but it has stepped up client engagement initiatives centered around its 50th anniversary. These include a burst of advertising in U.S. airports and train stations, cover wraps on the New York Times newspaper and ads on the NYT and Bloomberg websites. Familiar Vanguard themes—the importance of controlling investment costs and “Helping investors keep more of their returns since 1975”—are highlighted in these advertisements.

The use of aggressive price competition on fund fees, which has helped to drive down expense ratios across the U.S. fund industry—known as the “Vanguard effect”—is featured in a new presentation on its website that also highlights other milestones, such as the start of its international business in 1996 when an office was opened in Melbourne, Australia.

BlackRock Celebrates iShares Anniversary

Vanguard’s most important rival BlackRock has also just released a new advertising campaign with the tag “The Market is Yours” to mark the 25th anniversary of the iShares ETF brand.

A cynic might wonder if the new iShares promotion has been timed as a spoiler to Vanguard’s advertising. Journalists are notoriously cynical. But the adverts do provide a contrast between the approach of both companies. Vanguard’s focus is repeating familiar key messages while the distinctly content-light iShares film, directed by the creator of numerous corporate adverts Reynald Gresset, is all about the “vibes,” as kids say these days.

Far more detailed was the recent BlackRock investor day, where the entire senior leadership of the company rammed home its ambitions to grow in active ETFs, crypto, artificial intelligence, model portfolios and private markets by 2030 in a carefully orchestrated event that stretched over almost five hours.

BlackRock aims to grow its revenues from the $20 billion reported last year to at least $35 billion in 2030 and to double its market value from $140 billion to $280 billion, excluding any boost from positive market movements.

The phenomenal growth of the iShares ETF platform since it was acquired from Barclays in 2009 has provided BlackRock with the financial power to make the trio of acquisitions—Global Infrastructure Partners, credit investment shop HPS Investment Partners and the private fund data provider Preqin—that will now expand its reach deep into private markets where investors pay higher fees.

BlackRock Pivots Toward Private Markets

While BlackRock’s pivot toward private markets has garnered a great deal of media attention, the company also emphasised its aggressive ambitions for future ETF growth. Active ETFs were highlighted as a structural growth target, which BlackRock wants to develop into a $500 million revenue stream.

BlackRock also reiterated that the European ETF market had reached an inflection point for adoption in 2024 and has now shifted onto a similar growth track to that taken by the U.S. market over the previous decade.

BlackRock’s projections suggest that if the European ETF market does maintain its growth momentum—a big assumption—then it would reach the $10 trillion mark sometime in the early 2040s. Such projections are highly debatable given the fragmentation problems that have curtailed growth across Europe’s ETF ecosystem and remain unresolved, but earlier BlackRock forecasts for ETF asset growth, which might have appeared improbable at the time, have turned out to be accurate.

More broadly, the challenges that BlackRock is presenting across multiple fronts are in clear view for all of its rivals to see. Vanguard and all of the competitors to BlackRock across the investment industry certainly have a huge fight ahead.

This article was originally published at etf.com sister publication ETF Stream.