4 ms·

Vanguard, BlockRock, State Street. What's the fourth one?

AlexandrB 3y ago
The thing I don't get about this meme is why stop here? The reason BlackRock & co manage so much money and own so much stock in major companies is because people keep investing in their index funds. Isn't the ultimate problem all the individual investors and 401k holders that give them this influence by buying their funds? What does the alternative look like? Everyone managing individual stocks? More index fund providers?
- bequanna 3y ago
  The alternative is pass through voting rights so control rests with the people purchasing the index funds. Blackrock & co shouldn’t be exercising any control/influence over companies by using your ownership.
  - local_crmdgeon 3y ago
    That's exactly how it works though, they send me proxy ballots every few months
  - burkaman 3y ago
    For a while I had some money invested in a fund that passed all voting decisions to me. I put in what I think is substantially more effort than most people would, but the votes are so frequent, it takes such a long time to get an even rudimentary understanding of the company and the issues, and your influence is usually so infinitesimal that it just doesn't work. If you think it's unacceptable for Blackrock to have this much influence over its portfolio then I think it would be more realistic to just ban index funds rather than expect all Blackrock clients to participate in every proxy vote. Blackrock has what appears to be a pretty good system for institutional investors that I think they should extend to everyone: https://www.blackrock.com/corporate/about-us/investment-stewardship/blackrock-voting-choice https://www.blackrock.com/corporate/about-us/investment-stew.... This offers a middle ground between "take every vote" and "let Blackrock decide", where you can define a specific policy for common issues and let Blackrock take the actual votes according to that policy. I think a lot of people would take advantage of this and it would dilute a lot of Blackrock's power.
    - hugetim 3y ago
      I'd love to see them implement a good liquid democracy system that would offer a better "middle ground between 'take every vote' and 'let Blackrock decide'."
- 7thaccount 3y ago
  I think most on HN understand that we give them the power, but the problem is we don't have much of a choice if we want to retire as the Fed's actions are leading to inflation at such a level where saving money is worthless. I'm okay with them managing an index fund. It would seem wrong for them to then use that power to influence politicians and companies.
  - deleted 3y ago
    [deleted]

The thing I don't get about this meme is why stop here? The reason BlackRock & co manage so much money and own so much stock in major companies is because people keep investing in their index funds. Isn't the ultimate problem all the individual investors and 401k holders that give them this influence by buying their funds? What does the alternative look like? Everyone managing individual stocks? More index fund providers?

bequanna 3y ago
The alternative is pass through voting rights so control rests with the people purchasing the index funds. Blackrock & co shouldn’t be exercising any control/influence over companies by using your ownership.
- local_crmdgeon 3y ago
  That's exactly how it works though, they send me proxy ballots every few months
- burkaman 3y ago
  For a while I had some money invested in a fund that passed all voting decisions to me. I put in what I think is substantially more effort than most people would, but the votes are so frequent, it takes such a long time to get an even rudimentary understanding of the company and the issues, and your influence is usually so infinitesimal that it just doesn't work. If you think it's unacceptable for Blackrock to have this much influence over its portfolio then I think it would be more realistic to just ban index funds rather than expect all Blackrock clients to participate in every proxy vote. Blackrock has what appears to be a pretty good system for institutional investors that I think they should extend to everyone: https://www.blackrock.com/corporate/about-us/investment-stewardship/blackrock-voting-choice https://www.blackrock.com/corporate/about-us/investment-stew.... This offers a middle ground between "take every vote" and "let Blackrock decide", where you can define a specific policy for common issues and let Blackrock take the actual votes according to that policy. I think a lot of people would take advantage of this and it would dilute a lot of Blackrock's power.
  - hugetim 3y ago
    I'd love to see them implement a good liquid democracy system that would offer a better "middle ground between 'take every vote' and 'let Blackrock decide'."
7thaccount 3y ago
I think most on HN understand that we give them the power, but the problem is we don't have much of a choice if we want to retire as the Fed's actions are leading to inflation at such a level where saving money is worthless. I'm okay with them managing an index fund. It would seem wrong for them to then use that power to influence politicians and companies.
- deleted 3y ago
  [deleted]