Matt Levine’s Money Stuff: Index Funds Are a Bit More Illegal

Are index funds illegal?

Ten years ago last month, I first wrote about a then-novel theory that index funds are illegal. The theory is:

• A handful of big asset managers run diversified funds that own large stakes in every public company. In particular, the “Big Three” managers — BlackRock Inc., State Street Corp. and the Vanguard Group — run enormous index funds that are often among the biggest shareholders of companies, and that combine to own 20% or so of most US public companies.
• If two companies in the same industry have the same owners — or even a lot of the ...