Index investing: A threat to democracy?

A new book explores how the power of the big index funds might be checked without risking the benefits they bring for ordinary investors

Justin Reynolds

Europe law

Passive investment is hitting the political headlines and not for the right reasons. For Republican presidential candidates, those screening for ESG factors epitomise ‘woke capitalism’. Conservative governors are withdrawing money from state pension funds.

Federal legislators are threatening punitive laws and, in the UK, there are calls for passive investments to be taxed. The political grandstanding may be lurid but the legislative threat is real. Populist rhetoric is only the most visceral reaction to increasingly pressing issues raised by the rise and rise of passive investing...

This article first appeared in ETF Insider, ETF Stream's monthly ETF magazine for professional investors in Europe. To read the full article, click here.


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