Document Type
Book Chapter
Publication Date
8-2024
Abstract
A robust literature describes the incentives and stewardship practices of the “Big Three” asset managers (BlackRock, Vanguard, and State Street Global Advisors), often referring to these asset managers as “passive.” This is so common that the “Big Three,” “index fund,” and “passive manager” are used almost interchangeably by both academics and practitioners. This shorthand emerged in the foundational scholarship in this area, and while it may remain useful in certain contexts, its casual use obscures important features of the market and contributes to misperceptions. In this chapter, we demonstrate that it is a mistake to equate passive investing with index funds; index funds with the Big Three; and the Big Three with giant asset managers. We further sketch some of the consequences of these distinctions and set forth questions for further research.
Disciplines
Banking and Finance Law | Business Organizations Law | Law | Securities Law
Recommended Citation
Dorothy S. Lund & Adriana Z. Robertson,
Giant Asset Managers, the Big Three, and Index Investing,
Board Shareholder Dialogue: Policy Debate, Legal Constraints and Best Practices, Luca Enriques & Giovanni Strampelli (Eds.), Cambridge University Press
(2024).
Available at:
https://scholarship.law.columbia.edu/faculty_scholarship/4834
Included in
Banking and Finance Law Commons, Business Organizations Law Commons, Securities Law Commons
Comments
This material has been published in "Board-Shareholder Dialogue Policy Debate, Legal Constraints and Best Practices" edited by Luca Enriques & Giovanni Strampelli. This version is free to view and download for private research and study only. Not for re-distribution or re-use.