Adonis Diaries

The Big Three funds own 22% of S&P 500 companies?

The Big Three are the most important players in corporate America. Whether they like it or not.⠀
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● The success of index funds has had a weird and unintended consequence. As millions of investors have done the most sensible thing financially, they’ve also concentrated shareholder power in the Big Three.

Some 22% of the shares of the typical S&P 500 company sits in their portfolios, up from 13.5% in 2008.

Their power is probably greater, given that many stockholders don’t bother to vote their shares.⠀
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● BlackRock, Vanguard, and State Street combined own 18% of Apple Inc.’s shares, up from 7% at the end of 2009. Of the four largest U.S. banks, the fund companies together own 20% of Citigroup, 18% of Bank of America, 19% of JPMorgan Chase, and 19% of Wells Fargo.

The phenomenon can be even more pronounced for smaller companies.

The Big Three own 28% of Cabot Microelectronics Corp., an Aurora, Ill., seller of materials to semiconductor manufacturers that has a market value of $4 billion.⠀
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● The index funds in your piggy bank are great investments. But at what cost? Read more by clicking the link in our bio, and follow @businessweek for more.

Of the $3.6 trillion-worth of capital managed by hedge funds globally, $340bn is handled in and around Greenwich, Connecticut.⁠
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Greenwich is a small town with one of America’s greatest concentrations of wealth. It was a powerhouse of 20th-century finance, thanks to low taxes.⁠
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Among today’s residents are Ray Dalio of Bridgewater, the world’s most successful hedge fund, Tom Brady, an American footballer, and his wife, Gisele Bündchen, a Brazilian supermodel. ⁠