Awar sends out two invoices. The first goes to whoever makes the bombs and artillery shells, the second to whoever rebuilds what they hit. BlackRock’s name turns up on both. Its funds rank among the largest shareholders of Lockheed Martin, maker of the F-35 fighter jet, and of RTX, Northrop Grumman and Boeing. They also control more than seven percent of the votes at Rheinmetall, Germany’s largest arms maker. Its advisers have spent four years drafting, free of charge, the blueprints for rebuilding Ukraine. Larry Fink, who co-founded BlackRock in 1988 and still runs it, promised that capitalists would be “flooding Ukraine with capital.” The flood is still pending. The dividends are not.

Index Funds, Arms Registers, and the Art of Passive Ownership

Start with the paperwork. Every large US money manager must file a quarterly list of its holdings, known as a 13F. BlackRock’s for the end of June 2026 shows its funds holding 110.5 million shares of RTX, the company formerly called Raytheon, which makes the Patriot air-defence missile. That stake, worth $21 billion and about 8.2 percent of the company, makes BlackRock’s funds RTX’s largest shareholder. At Lockheed Martin they held 18.9 million shares, worth $9.6 billion. They also held 8.3 percent of Northrop Grumman, builder of the new B-21 stealth bomber, 7.1 percent of General Dynamics, which makes Abrams tanks and nuclear submarines, and 7.8 percent of Boeing, which sells fighter jets and tanker planes alongside its airliners. Lockheed Martin pays its shareholders a dividend of $3.45 per share every quarter. With 18.9 million Lockheed shares in BlackRock’s funds, that is roughly $65 million every three months from Lockheed alone. And Lockheed is just one of the arms makers in those funds. All that money arrives before anybody has fired anything.

In Europe the pattern repeats, just with an accent. In March 2026 BlackRock reported 7.33 percent of Rheinmetall’s voting rights. Its funds also hold about 9.5 percent of BAE Systems, Britain’s largest defence contractor, and 4.1 percent of Saab, the Swedish maker of the Gripen fighter. In Italy, a June 2026 filing with the market regulator shows 5.07 percent of Leonardo, the country’s largest defence group, although Leonardo’s by-laws mute any votes above three percent.

The standard reply is that these are just index funds: the money belongs to pensioners and savers, and BlackRock merely holds the votes and collects the fees. True. Vanguard and State Street, the other two of the “Big Three” of index investing, say the same, and their numbers make the point better than any rebuttal could. At Lockheed, State Street’s funds held 33 million shares, worth $16.8 billion, at the end of June; Vanguard’s two reporting entities held another 19.8 million. At RTX the three firms are the three largest shareholders. By our own count from the June 2026 filings, their funds together hold roughly 31 percent of Lockheed Martin, a quarter of Northrop Grumman, close to a quarter of RTX and about a fifth of General Dynamics and Boeing. Holding the whole market simply means holding part of the war as well, and a passive holder of almost everything still holds everything.


The Free Blueprint

The rebuilding half of the cycle began in September 2022, when the Australian mining billionaire Andrew Forrest introduced Larry Fink to Volodymyr Zelensky. On 10 November 2022 BlackRock’s advisory arm signed a memorandum of understanding, a non-binding letter of intent, with Ukraine’s Ministry of Economy to design the “setup, structure, mandate and governance” of a reconstruction investment framework. Two months later, in Davos, Fink explained the vision.


The result was the Ukraine Development Fund, designed together with the US bank JPMorgan and to be based in Luxembourg. By March 2024 the plan was $500 million from governments and development banks plus $2 billion from private investors, enough to finance at least $15 billion of projects. Both firms worked for free. Internal slides seen by the New York Times tell the rest: $50–80 billion to be mobilised in April 2023, $15–30 billion a year later, and no sign that BlackRock planned to put in money of its own. In January 2025, after Trump’s election, BlackRock stopped looking for investors. Its spokesman explained that “you cannot launch a fund with no money in it” and said the firm no longer had “any active mandate” in Ukraine. Europe built a replacement fund with €220 million in public seed money. Washington and Kyiv set up their own $150 million fund built around critical minerals. Public money, meanwhile, never stopped moving. How much of the Western aid for Kyiv returns home as orders for Western industry is a story we told in “The Ukraine War Circle”.

By December 2025 BlackRock was back at the table, this time on the American side of it. On 10 December 2025 Fink joined Treasury Secretary Scott Bessent and Jared Kushner in the first meeting on Ukraine’s economic recovery. By January 2026 the target had grown to an $800 billion “prosperity plan”, again with BlackRock advising free of charge. According to the New York Times, Zelensky said the firm would “organize the implementation” of the plan, and the paper noted that BlackRock, as owner of Global Infrastructure Partners, one of the world’s largest infrastructure investors, could profit from the rebuilding itself. So far the firm has committed advice, not capital. Its vice chairman was candid about the order of events.


Regulators, Proxy Votes, and the Art of Looking Elsewhere

Governments are not shy about legislating. Washington has rewritten how index funds may speak to a boardroom, Texas has sued them over coal, ten US states passed laws against ESG investing (weighing environmental, social and governance goals) in 2025 alone, and Brussels used an entire notice in its Official Journal to explain that tanks can be sustainable. Nobody has asked the simpler question: should three firms sit among the top shareholders of the companies that make the weapons and ammunition and of the companies that pour the concrete afterwards? As early as 2015, BlackRock, Vanguard and State Street together were the largest shareholder in 438 of the S&P 500 companies.

The laws that do exist police how the funds behave, not how big they get. Take the biggest case. In November 2024 Texas and ten other Republican-led states sued BlackRock, Vanguard and State Street under competition law. Their claim: the three used their large stakes in US coal producers to push them, in the name of climate goals, into mining less coal, which drove up electricity prices. In May 2025 the Justice Department and the FTC, America’s two competition watchdogs, backed the states, while assuring everyone that “most index fund investing” remains protected. In other words, the case is about what the funds allegedly did with their coal shares, not about three firms holding large pieces of almost every major company in the country. Vanguard settled in February 2026 for $29.5 million and a promise to be passive, without admitting wrongdoing; BlackRock and State Street are fighting on. The FDIC, which insures US bank deposits, wants passivity pledges from fund giants holding ten percent of a bank. FERC, the federal energy regulator, lets BlackRock buy into utilities as long as it behaves. The SEC, the US stock-market regulator, has warned the fund giants not to lean on boards. Today the fund manager casts the votes at shareholder meetings on its investors’ behalf, the so-called proxy votes. Senator Sullivan’s INDEX Act would let fund investors cast their own votes; it has not left committee. The EU studied “common ownership”, the same investors holding rival companies at once, found nothing to do, and in December 2025 declared that excluding the defence industry from sustainable finance “would not be consistent” with its rules. Passivity is the price of admission: hold everything quietly, and you may hold everything, from the arsenal to the rebuild.

The state, for its part, is a client as much as a regulator. When markets crashed in March 2020, the US central bank launched an emergency programme to buy company bonds and keep firms afloat. The New York Fed, which runs such operations, hired BlackRock’s advisory arm to do the buying. Part of the money went into bond ETFs, funds that bundle hundreds of bonds into a single share, and the world’s largest maker of ETFs is BlackRock itself, under the brand name iShares. So BlackRock spent the Fed’s money partly on its own products: iShares funds made up about 48 percent of the first $1.3 billion of ETFs the Fed bought. It waived its fees on them, and after a competitive tender in 2021 it was replaced. Its risk software Aladdin, which large investors use to measure the risks in their portfolios, had about $21.6 trillion of assets on the platform as of 2020 and is used by central banks among others. The same house writes the risk models, manages the rescue programmes and drafts the reconstruction plans. It is hard to regulate someone you keep hiring.

Taiwan, Tokyo, and the Art of Pre-Positioning

Ukraine is not the last customer. Washington has approved, and notified Congress of, $29.72 billion of arms sales to Taiwan that have not yet been delivered: 28 cases, led by $8 billion of Lockheed Martin’s newest F-16 fighters, $4.05 billion of Lockheed’s HIMARS rocket launchers, $4.03 billion of BAE’s Paladin self-propelled guns and $2.37 billion of Boeing’s Harpoon anti-ship missiles. Tokyo approved its largest defence budget ever for the fiscal year starting April 2026, ¥9.04 trillion, the first above ¥9 trillion. For decades Japan kept defence near one percent of GDP; since 2022 it has been climbing to two, and Mitsubishi Heavy Industries, the country’s largest defence contractor, stands first in line for the orders. NATO members have pledged five percent of GDP for defence and related spending by 2035, including 1.5 percent for infrastructure and resilience. The order books are filling from the Baltic to the Taiwan Strait, and the names on the shareholder registers are the same as above.

What follows is our own projection, not anyone’s forecast: if the standoff over Taiwan ever turned from deterrence into war, the companies on Taiwan’s shopping list would sell far more. The Big Three’s funds would hold their shares, as they do today, and collect the dividends. And whatever was left standing afterwards would once again need money and a blueprint for rebuilding, the very business BlackRock has been rehearsing in Ukraine. The same funds already hold the other side of that bet, too: BlackRock’s funds alone held 20.1 million TSMC ADRs, worth $9.6 billion, in June 2026. ADRs are US-traded certificates for foreign shares. TSMC, the Taiwan Semiconductor Manufacturing Company, makes most of the world’s most advanced chips. Nobody needs to want any of this for it to happen. An index fund has no opinion on war; it simply holds whatever the war requires, and later whatever the peace requires.

Destroy, Rebuild, Rebalance

Put the pieces side by side and the loop needs no drawing. Governments pay for the weapons, the weapons pay dividends to funds managed by the Big Three, and one of the three offers, free of charge, to organise what comes afterwards. None of this is illegal, and none of it requires a conspiracy. It requires only a market in which the largest shareholders are allowed to hold the arsenal and the reconstruction at the same time, and a political class that would rather regulate ESG labels.

It is about time to change that. The rule would fit on a single page: no fund group may hold large stakes in the companies that make the weapons and, at the same time, in the companies that rebuild what those weapons destroy. Lawmakers who managed to define a sustainable tank can surely define that.

Nemesis, the Greeks held, punished those who grew too great. Her modern namesake does not punish; it rebalances quarterly.

---