More Americans own stocks than ever before, yet the passive index funds they favor are facing increasing partisan criticism. Here's why
The share of adult Americans who own stocks is approaching an all-time high of 63%, which may explain why events such as the surge in 'meme' stocks like GameStop gets such generous play in the news. But it doesn't explain why the investment vehicles that dominate Americans' portfolios — passive mutual funds tied to market indexes such as the Standard & Poor's 500 — have traditionally drawn so much less interest in the news media.
That relieves them of the chore, even the duty, of making judgments about a company's future, its competitive behavior, its prospects. A 2014 academic paper suggested that, because index fund investors are likely to own all the major competitors in a given industry , aggressive competing by one will reduce the value of the others, possibly lowering the value of the index.
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