The article's focus on the temptation for collusion seems overblown to me. Yes, the interests of Pepsi+Coke's index shareholders are served if the companies avo

The article's focus on the temptation for collusion seems overblown to me. Yes, the interests of Pepsi+Coke's index shareholders are served if the companies avoid cannibalizing each other's value, but those shareholders have no way to apply pressure on the companies to do that. Index shareholders do not vote, and by their nature cannot sell shares of a company that they are displeased with. The other concern seems more well-placed. An efficient market requires that shareholders buy and sell companies in response to performance. Index funds buy and sell companies in response to the performance of the fund, or the market as a whole, or some other arbitrary factor. If 50% or 80% or 90% of a company is owned by 'dumb' funds, what does that do to their market value? And how could that affect the choices of the CEO?