If you’re looking to diversify your investment portfolio by using ETFs, you’ve almost certainly encountered ETFs by both BlackRock and Vanguard. The two companies are considered as part of the asset management “Big Three” (the third member of the Big Three is State Street Global Advisors).
So, what’s the difference between BlackRock vs. Vanguard? The short answer is that for most investors, both BlackRock and Vanguard have products that will almost perfectly match their needs. Some of the products offered by BlackRock and Vanguard are practically equivalent, for example S&P 500 index funds that track the same index and have the same expense ratios.
Both BlackRock and Vanguard are known among investors for their ETFs and mutual funds, many of which have attracted a significant amount of assets. In fact, BlackRock and Vanguard are the world’s largest and second-largest asset management firms, respectively.
As of March 2022, BlackRock had a 34.6% share of U.S. ETF assets, while Vanguard commanded 29.2% of the market.
Image source: Bloomberg Intelligence
About BlackRock
BlackRock is currently the largest asset management firm in the world, with $9 trillion in assets under management (AUM) as of 2023. The company was founded in 1988 and is led by CEO Larry Fink.
BlackRock’s investment products under the iShares brand include ETFs, mutual funds, bond funds, money market funds and more. BlackRock also offers a variety of actively-managed funds. In total, BlackRock issues more than 400 different ETFs.
At the moment, BlackRock’s largest ETF is the iShares Core S&P 500 Trust, which has over $464 billion in assets under management.
Here’s a quick overview of BlackRock’s largest ETFs:
AUM Asset class iShares Core S&P 500 ETF $464 billion Equities iShares Core MSCI EAFE ETF $118 billion Equities iShares Core U.S. Aggregate Bond ETF $107 billion Bonds iShares Russell 1000 Growth ETF $92 billion Equities iShares Core S&P 500 Mid-Cap ETF $83 billion Equities
About Vanguard
Vanguard is an investment management firm that was founded in 1975 by John Bogle, who served as the company’s CEO from its inception until 1999. Currently, the company is headed by CEO Mortimer J. Buckley. Vanguard is currently the world’s second largest asset manager in the firm, with an AUM of $7.6 trillion as of 2023.
Vanguard has become synonymous with passive management and strong diversification, which is achieved through index funds. Vanguard’s founder John Bogle espoused the benefits of investing in low-cost index funds, and investors that subscribe to this style of investing are sometimes referred to as “Bogleheads”.
When it comes to investment products, Vanguard offers mutual funds, ETFs, money market funds, CDs and bond funds. Although the company is primarily known for its passively-managed products, it also offers investment products that are managed actively. In total, Vanguard issues over 80 different ETFs – if you're interested in the best picks, make sure to take a look at our list of the best Vanguard ETFs.
Here’s a quick overview of BlackRock’s largest ETFs:
AUM Asset class Vanguard S&P 500 ETF $456 billion Equities Vanguard Total Stock Market ETF $397 billion Equities Vanguard FTSE Developed Markets ETF $134 billion Equities Vanguard Growth ETF $126 billion Equities Vanguard Value ETF $115 billion Equities
Should you invest in BlackRock or Vanguard products?
Both BlackRock and Vanguard offer a diverse range of products that caters to many different types of investors. When it comes to low-cost index funds, both BlackRock and Vanguard have very competitive offerings and there’s usually not much difference between comparable ETFs issued by the two companies.
For example, you’re going to see practically the same investment results if you pick BlackRock’s iShares Core S&P 500 ETF or Vanguard’s S&P 500 ETF, as they both track the same index and have the same 0.03% expense ratio. Both BlackRock and Vanguard are highly reputable asset management companies.
When it comes to passively managed index funds, the short answer is that it doesn’t really matter if you pick a BlackRock ETF or a Vanguard ETF if both products have the same investment objectives and the same expense ratio. In order to directly compare ETFs according to their most important characteristics, we suggest you use an ETF screener.
In some cases, Vanguard might offer certain investment products that have no equivalent in BlackRock’s offering and vice versa. For example, BlackRock issues the iShares Gold Trust, which has no real equivalent in Vanguard’s product offering.
One interesting thing to point out when it comes to BlackRock vs. Vanguard is that BlackRock has launched Bitcoin ETFs, while Vanguard is currently unwilling to launch investment products tied to cryptocurrency. So, if you’re a cryptocurrency supporter, you might be more inclined to invest in BlackRock’s products to reward the company for being open to crypto.
Overall, BlackRock offers a more diverse range of investment products compared to Vanguard, so you’ll probably be able to find a suitable product even if you have very specific investment needs. Still, for most investors, there is practically no difference between BlackRock and Vanguard when it comes to comparable ETFs.