Submitted by helloworld_141 t3_yemqwz in nyc
redelephant390 t1_itzbsxr wrote
Reply to comment by SoggyWaffleBrunch in BlackRock HQ in NYC stormed with pitchforks. by helloworld_141
Blackrock isn’t a bank, though…
SoggyWaffleBrunch t1_itzc9vv wrote
they're the world's largest asset manager. The same idea applies
barbozas_obliques t1_iu1r6y3 wrote
You want me to watch a 20 minute video when you conflated the concept of a bank and an asset manager? Dude what are you smoking.
[deleted] t1_iu1t6k0 wrote
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sleeptrain123 t1_iu4b0li wrote
Some do, but they’re distinct entities and the funds are completely ring fenced. Wells Fargo, Schwab, JPM etc…the banks and asset management arms are separate legal entities. A bank can’t invest deposits in anything they want. Asset managers are typically bound by the SEC and the investment company act of 1940, banks are under supervision of the fed. The regulatory scrutiny of banks is much higher.
LtRavs t1_itzdda2 wrote
They’ve also taken the strongest ESG stance of any asset manager.
SoggyWaffleBrunch t1_itzekv2 wrote
did you consider that the video I recommended touches on that topic?
sleeptrain123 t1_iu46vwj wrote
No it doesn’t
[deleted] t1_iu47sz4 wrote
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sleeptrain123 t1_iu49e6p wrote
Banks make loans or help the entity to raise debt by underwriting bond offerings, which are used for capital investment, business expansions, new pipelines etc. They’re not investing your deposits into public equities, they’re not allowed to do that.
Asset Managers are typically investing in the public equities, where they’re passive (they’re just buying whatever is in the benchmark they’re tracking) or they’re active (so they may be overweighting towards certain stocks but typically are measured against a benchmark which contains all manner of stocks).
One is an active decision to extend credit to companies to expand and invest, the other is more based on the fact that these companies exist and if you offer a product that tracks the stock market you can’t just choose to exclude companies from that. From a fiduciary perspective, it would be impossible. That’s why so many asset managers are rushing to offer personalized and thematic investment product, so the decision can lay with the individual. I.e a US equity index product but excluding companies based on GICS classifications, ESG scores, or thematic baskets.
When you divest equity, it doesn’t just cease to exist. Someone else buys it. If blackrock sold all the oil and gas stocks they own, they would simply pass into the ownership of other entities. That’s why anyone with half a brain realizes that asking asset managers to just divest from fossil stocks is pointless and most likely dangerous.
So that’s how the way that banks invest and asset managers invest is quite different. It’s reasonable to not want banks to offer credit to fossil fuel companies, that would hurt those companies, it’s downright stupid to want asset managers to simply sell the stocks of companies we don’t like. It just means that ownership stake and voice is diluted, and passed to other entities.
[deleted] t1_iu4ati3 wrote
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sleeptrain123 t1_iu4b49d wrote
It doesn’t, this is such a typical Reddit response. It’s very clear you have no idea what you’re talking about, but you’ll double down anyway. Good luck to you.
[deleted] t1_iu4cmno wrote
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sleeptrain123 t1_iu4eykj wrote
Nothing you said relates to that point. It’s not a case of ‘owning’, it’s an opportunity for you to learn something. You can choose whether you do that, or you can choose to continue to not understand the difference between a bank and an asset manager. You said conceptually the video was the same for both, I pointed out that it’s not, you then asked what ‘pendantic’ point I was making, and are now defensive rather than just accepting that you’re wrong. It’s the Reddit way
[deleted] t1_iu4fxv2 wrote
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sleeptrain123 t1_iu4hv4q wrote
“When you store your money with an institution, they will use that money however they want”
Literally that point alone is just categorically not true. There are very rules about what banks can use deposits for, and any publicly offered investment product by an asset manager has legally binding prospectus and investment disclosures (callled an ADV) which details the objective of the fund, what they’re allowed to invest in, the risk they can take, and what they’re not allowed to invest in. Again, this isn’t a debatable point.
Seriously, just stop, you’re embarrassing yourself. If pointing out that you have a childlike view of finance is pedantic, then I guess I’m guilty as charged!
[deleted] t1_iu4i6rn wrote
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