[lowracle]

That doesn't solve the big part of the problem which is the co-ownership of competing companies. A blackrock manager voting for you or you voting doesn't change anything. Through the fund, you co-own multiple competing companies, therefore you won't vote for policies that would increase competition between those companies.

[njarboe]

I would say this does solve the problem. If you have enough money for your vote to matter, then you can just own all the stocks in an index yourself and get to vote. This is now even more practical as trade costs have recently been cut to zero for all major brokerages.

The average index fund owner is also not likely be spending time looking over the voting possibilities of 500 companies and aligning votes to decrease competition between them, even if that was possible. They just wouldn't vote on issues. The problem is that three funds can decided to vote on policies that reduce competition between companies and that they are big enough for the votes to matter.

Transferring votes to the underlying owners of the fund would in reality likely just cause those votes not to be cast. It is similar to just saying that the funds can't vote, but doesn't disenfranchise people who really want to vote and still gives all those shares the index funds own possible power.

[perl4ever]

I feel like the anti-competitive concerns about index funds are another example of people having concerns about everything and its opposite and not seeing that implies the problem is misidentified.

We're all worried about companies doing things to compete that are not in the interest of society, right? Less competition equals less (fewer?) externalities. Why even have companies in the first place if competition is simply always a good thing? Why was Eddie Lampert's clashing departments at Sears (supposedly) a disaster?

[darawk]

Ya you're right. I guess the correct solution then is to prevent index funds from voting entirely. If you own a company as a part of a passive vehicle, your vote doesn't count.