Index funds are quietly gaining market share and attracting investors
- Index funds, specifically S&P 500 and total stock market index funds, have been increasing their market share every year for the past 10-plus years
- As of Nov. 30, the combined market share of these index funds totaled 17.5%, doubling in just under 10 years
- Total market funds have had larger net inflows than S&P 500 funds from 2013 through 2022
- S&P 500 funds have considerably more assets than total market funds due to being available to retail investors earlier
- Vanguard dominates the total market fund market with a market share of over 80%
- Index funds offer simple, low-cost, one-stop shopping for investors
Index funds, specifically S&P 500 and total stock market index funds, have been steadily increasing their market share over the past decade. As of Nov. 30, their combined market share totaled 17.5%, doubling in just under 10 years. Total market funds have had larger net inflows than S&P 500 funds from 2013 through 2022. The reason for S&P 500 funds having more assets is that they were available to retail investors earlier. Vanguard dominates the total market fund market with a market share of over 80%. Index funds offer investors a simple, low-cost, one-stop shopping solution. Despite being considered boring, index funds are becoming increasingly popular among investors.
Public Companies: Vanguard (N/A)
Private Companies:
Key People: Allan Sloan (independent business journalist), Jack Bogle (Vanguard’s founder), Russel Kinnel (Morningstar’s director of manager research)
Factuality Level: 8
Justification: The article provides data from Morningstar to support its claims about the increasing market share and popularity of index funds. The author also references a book and quotes an expert from Morningstar to provide additional context and credibility. Overall, the article presents factual information and does not contain any obvious bias or misleading statements.
Noise Level: 7
Justification: The article provides a thoughtful analysis of the increasing popularity of index funds and their market share. It presents data and examples to support its claims. However, it lacks scientific rigor and intellectual honesty as it only presents one perspective and does not explore potential drawbacks or risks associated with index funds.
Financial Relevance: Yes
Financial Markets Impacted: The article discusses the stock market and the popularity of index funds, which can impact the performance of individual stocks and the overall market.
Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The article focuses on the stock market and the popularity of index funds, which are financial topics. There is no mention of any extreme events or their impact.
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