[usefulcat]

> An index passively holding 99% of the market would not interfere with price discovery because the remaining 1% would go about its business as if nothing was different.

That may be true at the point in time where it's already at 99%, but consider the impact on prices as funds were poured into it over time on the way to 99%..

[whatshisface]

If the funds put in to the index were taken out of mutual funds, there might not be any impact on the prices at all.