BlackRock's response letter to state and local financial officers

To:
Marlo Oaks, Utah Treasurer
Malia Cohen, California State Controller
Fiona Ma, California State Treasurer
Andrew Sorrell, Alabama Auditor
Adam Crum, Alaska Commissioner of Revenue
Kimberly Yee, Arizona Treasurer
David L. Young, Colorado State Treasurer
Erick Russell, Connecticut Treasurer
Colleen C. Davis, Delaware State Treasurer
Julie Ellsworth, Idaho Treasurer
Michael W. Frerichs, Illinois State Treasurer
Elise Nieshalla, Indiana Comptroller
Dan Elliott, Indiana Treasurer
Roby Smith, Iowa Treasurer
Steven Johnson, Kansas Treasurer
Allison Ball, Kentucky Auditor
Mark Metcalf, Kentucky Treasurer
John Fleming, Louisiana Treasurer
Joe Perry, Maine State Treasurer
Brooke Lierman, Maryland State Comptroller
Deborah B. Goldberg, Massachusetts State Treasurer and Receiver-General
Julie Blaha, Minnesota State Auditor
David McRae, Mississippi Treasurer
Scott Fitzpatrick, Missouri State Auditor
Vivek Malek, Missouri Treasurer
Mike Foley, Nebraska Auditor
Tom Briese, Nebraska Treasurer
Zach B. Conine, Nevada State Treasurer
Brad Lander, New York City Comptroller
Laura M. Montoya, New Mexico State Treasurer
Brad Briner, North Carolina Treasurer
Thomas Beadle, North Dakota Treasurer
Cindy Byrd, Oklahoma Auditor & Inspector
Todd Russ, Oklahoma Treasurer
Elizabeth Steiner, Oregon State Treasurer
Stacy Garrity, Pennsylvania Treasurer
James A. Diossa, Rhode Island Treasurer
Curtis Loftis, South Carolina Treasurer
Josh Haeder, South Dakota Treasurer
Mike Pieciak, Vermont State Treasurer
Michael J. Pellicciotti, Washington State Treasurer
Larry Pack, West Virginia Treasurer
Curt Meier, Wyoming Treasurer

Dear State Treasurers and other State and Local Financial Officers,

We write in response to the letters from 26 Republican state financial officers dated July 29 and 17 Democratic state and local financial officers dated August 15. We are proud to serve your states, and to help people save and invest for retirement. It is an honor for BlackRock to partner with you to help millions of hardworking Americans experience financial well-being. However, these letters continue a concerning trend by both parties of politicizing the management of public pension funds.

Fiduciary duty is one of our foundational principles – as an asset manager, we always put our clients and their interests first. We take this duty seriously and are proud to help 35 million Americans save and invest for retirement, including many who reside in your states.¹ Indeed, our fiduciary-first mindset has helped us grow into the company we are today.

The strength of our business reflects the trust clients continue to place in us. Our industry is highly competitive and diversified, and we understand that our business can only succeed if we consistently deliver for our clients. Over the past three years, the assets BlackRock manages on behalf of our clients have grown by $4 trillion to $12.5 trillion.²

BlackRock’s growth over time has enabled us to broaden market access and lower costs for investors. Since 2009, we’ve offered products with fees as low as 3 cents per $100 invested, compared to $1–$2 a generation ago, when such costs could have significantly eroded long-term savings.³ Since 2015, our iShares ETFs have saved clients $642 million in fees.⁴ Today, we offer more quality ETFs than anyone else according to Morningstar, an independent ratings organization. Of the 2,900 top performing funds across the entire ETF market, almost a quarter of them — 725 — are BlackRock’s. That’s more than double our next highest performing competitor.⁵

Investment Stewardship

Many of the questions raised in your letters concern our approach to investment stewardship activities on behalf of clients. Investment stewardship is one of the ways we fulfill our fiduciary duty as an asset manager to our clients, as most of our clients authorize BlackRock to vote on their behalf. For those clients, and as a fiduciary, BlackRock is legally required to make proxy voting determinations in a manner that is consistent with clients' investment objectives, as documented in clients' and funds' contractual arrangements with BlackRock, and BlackRock engages with companies to inform these voting decisions. The fiduciary standards set by federal and state law also require BlackRock to prudently and loyally adhere to our clients' investment guidelines and objectives, including those specified by the pension funds in your states.

At BlackRock, most investment stewardship activity is conducted by BlackRock Investment Stewardship (BIS), a dedicated function within the firm, which is responsible for engaging with public companies on behalf of index strategies. The vast majority of our clients have elected to follow the BIS benchmark proxy voting policy, which is solely focused on advancing long-term financial interests. These policies are clear and transparent, publicly available, and regularly updated.⁶ The guidelines focus on financial materiality, including in areas like disclosure gaps or risk oversight that could pose long-term financial risks to shareholders. BlackRock also makes the full BIS voting record public.

Many of our clients value having BlackRock act as an engaged shareholder on their behalf. Indeed, many clients believe that shareholder participation also encourages a healthier capital market system and serves as a foundational element of America’s strong capital markets. At the same time, BlackRock is not an activist investor: it does not file shareholder proposals or seek to nominate directors for election to a company’s board. BIS does not act collectively with other shareholders or organizations in voting shares and does not rely on any proxy research firm’s voting recommendations. Nor does it dictate company strategy, as we view setting, executing, and overseeing strategy as the responsibility of management and the board.

Various federal, state, and local regulators monitor BlackRock’s compliance with standards and commitments that require us to refrain from being an activist shareholder. We have always complied with these regulations. As recently as this month, in an Order issued on August 6, the Federal Energy Regulatory Commission concluded that there is no evidence that “BlackRock has used its holdings for purposes of influence or to exert market power.”⁷

Expanding Stewardship Choice

To ensure that BlackRock’s stewardship activity best meets our clients’ investment needs and expectations, we are continuing to expand the stewardship options available to them. BlackRock pioneered and continues to expand our industry-leading Voting Choice program, designed to offer clients the broadest possible range of options for expressing their views through proxy voting. Launched in January 2022, BlackRock Voting Choice enables eligible clients to apply their voting preferences to their pro-rata share of the funds in which they are invested. Eligible clients may choose to implement their own voting policies or select from 16 third-party policies.

As of June 30, 2025, clients representing over $3 trillion in assets under management are eligible to participate in Voting Choice, with approximately $784 billion in index equity assets currently exercising this option. We remain focused on continually expanding the program to give clients even more options to express their proxy voting preferences.

Thank you for the opportunity to respond. As a growing number of studies continue to show, the politicization of pension fund management ultimately costs savers and retirees. Our clients depend on all of us to help them retire with dignity, and we are grateful to work with you to help them achieve their goals. We would be happy to provide any additional information that may be helpful.

Sincerely,

S. Jane Moffat,
Managing Director, US Government Affairs & Public Policy