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by thekyle
2274 days ago
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> If there's a lot more index fund money than hedge fund / active money it would probably mess with prices, right? No, assets under management is irrelevant to price discovery. Trading is what sets prices not holding stocks. According to a 2018 Vanguard paper index funds only made up around 5% of trading volume despite holding about 50% of assets. So active managers are still responsible for 95% of price discovery even if they hold only 50% of assets. https://personal.vanguard.com/pdf/ISGBEL.pdf |
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