After a stint at McKinsey & Co. and one in government, he was recruited to BlackRock by his former boss at the U.S. Treasury, Peter Fisher. He helped start BlackRock Solutions, the company’s institutional advisory group that went on to advise the U.S. and other governments around the world on toxic assets after the 2008 financial crisis.
Vanguard Headache
When Wiedman was named head of iShares, his biggest headache was Vanguard, the firm that had popularized index mutual funds and moved into ETFs in 2001. Vanguard is owned by its funds, allowing it to charge lower fees and attract individual investors.
In the year leading up to Wiedman’s iShares appointment, Vanguard’s ETFs took in $41.1 billion, almost double BlackRock’s $22.1 billion, off an asset base about one-third the size, according to data compiled by Bloomberg.
Wiedman responded in October 2012 with the iShares “core” series. He cut the fees on six existing ETFs and added four new products that created a lineup of low-priced, broad market funds designed to appeal to buy-and-hold retail investors.
Wiedman also oversaw a significant expansion of the firm’s cooperation with Fidelity Investments, the Boston-based mutual fund giant that runs the biggest online brokerage with about 15 million client accounts. That gave BlackRock a significant distribution boost.
Reversing Dynamics
The efforts, Wiedman said, have “completely reversed the dynamics with Vanguard.”
Not quite. In the 12 months through May 31, Vanguard ETFs garnered $50.9 billion, compared with iShares’ $36.6 billion. BlackRock’s core series attracted $15.9 billion, compared with $17.5 billion for the 10 corresponding Vanguard offerings, according to data compiled by Bloomberg.
“The primary reason we launched those was to serve that core part of the market and maintain our market share,” he said. “Market share matters. We’re there in the clients’ minds.”