Institutional Investor: Passive, But Out of Control

When Mark Okada, co-founder and CIO at Highland Capital Management, saw news that index fund giant Vanguard Group’s inflows were larger than all other asset managers’ combined for the first quarter of 2016, he said he was worried.

In December of last year alone, according to Morningstar, passively managed funds took in a record $50.8 billion.

Exchange-traded funds own 6.3 percent of an average listed company’s shares, Quigg pointed out in a phone interview, citing statistics from Toroso Investments. “Relative to the larger investing industry, ETFs are a small component,” Quigg said.

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