Rise of Index ETFs Could Result in Complacent Corporate Governance | ETF Trends

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…

Are Index Funds a Trap For the Passive Minded? – Barron’s

“At current rates of asset inflows, it will not be long before index funds effectively control Corporate America and the corporations of many foreign countries,” [Pershing’s Bill] Ackman writes. “The Japanese system of cross corporate ownership, the keiretsu, has been blamed for decades of Japanese corporate underperformance and economic malaise. Large passive ownership of Corporate…