⚠ Somebody Else Can Buy LiquidityModerate threat

BlackRock (BLK) — threat to the moat

Depth looks organic and is partly purchasable — by a rival who owns the distribution BlackRock has to rent.

Liquidity looks organic and is partly purchasable. A sponsor with a large balance sheet can seed a fund with its own capital, pay for market-making, put the ticker on its own distribution platform, and hand it to a captive model-portfolio business. Several of BlackRock's largest competitors have all four.

How a distributor manufactures depthSeed thefund from thebalance sheetPay formarket-makingDefault it in thefirm’s own advisoryprogrammeAssets arrivewithouta contestVolume, thena 2bp spreadBlackRock reaches retail through intermediaries it does not own: 10% of AUM, 25% of base fees
None of these steps requires beating BlackRock at anything. They require owning the distribution.

The clearest illustration is a brokerage firm that also manufactures funds. It can place its own ETF as the default in its own advisory programmes, which delivers assets without contest, and assets deliver volume, and volume delivers the spread. None of that requires beating BlackRock at anything. It requires owning the distribution.

BlackRock's defence is that it is not a distributor and has therefore had to win on the merits everywhere, which has produced genuinely deeper markets. But that defence is also an admission: BlackRock reaches retail investors principally through intermediaries1 it does not own, and every one of those intermediaries has an incentive to prefer its own product where it has one.

The number to watch is not fees or flows. It is whether a competitor's fund in an established category ever begins quoting tighter than the iShares equivalent for a sustained period. That has not happened at scale. If it does, the argument on the parent page needs rewriting.

References
  1. ReportedBut that defence is also an admission: BlackRock reaches retail investors principally through intermediaries it does not own, and every one of those intermediaries has an incentive to prefer its own product where it has one
    BlackRock, Inc. Form 10-K, FY2025, Item 1 Business — Aladdin Enterprise, Aladdin Risk, Aladdin Wealth, eFront, Preqin and Cachematrix; "while Aladdin is a multi-asset system, the majority of positions managed on the platform are fixed income"; the March 2025 Preqin acquisition "added private markets data capabilities to its existing Aladdin and eFront workflow offerings, creating a preeminent private markets technology and data provider" and "as clients' private market allocations continue to grow, they will require more standardized and transparent data on their investments, creating an additional growth opportunity for Preqin"; index AUM within or above applicable tolerance of 95%, 96% and 99% across the disclosed periods; retail investors "are served principally through intermediaries, including broker-dealers, banks, trust companies, insurance companies and independent financial advisors" and "technology solutions, digital distribution tools and a shift toward portfolio construction are increasing the number of financial advisors and end-retail investors using BlackRock products" — FY2025 · publ. February 2026 · source ↗
Sources
Generated September 23, 2026