Echoing (or catching up to) the findings of VEA Chair Bob Monks in his book Citizens Disunited, this reflects increasing concerns about “drone” investors.
As more money flows into index-based stock mutual funds and ETFs, there may be less actively involved shareholders willing to push for changes during shareholder meetings.
Index funds now account for half of the U.S. stock fund market, but the people behind the money rarely influence decisions or demand better returns at the companies in which they have invested trillions of dollars, Reuters reports.
According to a Reuters analysis of shareholder-voting records, the money managers behind some of the biggest index funds, like BlackRock Inc, Vanguard Group and State Street Corp, rarely push for changes at the corporate level. For example, BlackRock voted with management 93% of the time, along with Vanguard at 91% and State Street at 84% during the proxy year ended June 30, 2018.