The Passive Investing Revolution: Index Funds Now Control 50% of US Stocks

Passive index funds now control over 50% of US stock market assets, up from 15% in 2005. Vanguard alone manages $9+ trillion. This shift has dramatically reduced investment costs (average expense ratio from 1% to 0.03%), but raises concerns about corporate governance concentration and market efficiency. When three firms (BlackRock, Vanguard, State Street) own 20%+ of every major company, who holds management accountable? The irony: active managers created index funds to prove they could beat them, and the result is that most investors now know they cannot.