A third of all S&P 500 trades now occur just before the close
It’s new ammo for critics of the global boom in passive investing, because index funds drive the phenomenon.
These products typically buy and sell shares at the close, since the last prices of the day are used to set the benchmarks they aim to replicate.
Assets in passive equity funds have surged over the past decade to more than $11.5 trillion in the US alone
The charge is one of a number leveled against passive investing, including that it can blindly inflate company valuations and wreak havoc when major indexes rebalance, triggering billions in one-way trades.
The litany of concerns has inspired high-profile attacks from critics such as Elon Musk, and more recently Greenlight Capital’s David Einhorn.
Bloomberg 29 April 2024
Passive investors have 'fundamentally broken' the market, David Einhorn says
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