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As passive fund assets totaled $5.743 trillion in the U.S. in 2021, academic research explores how passive funds employ investment stewardship.

How Companies Pay Shareholders: Are Buybacks Good For Shareholders In The Long Run?  Share   Share Trending Given the dynamics we've discussed earlier regarding buybacks, it should be no surprise to see that they tend to be additive to performance. Of course, critics acknowledge that buybacks tend to boost short-term prices. How could anyone deny that an increase of buying any asset, ceteris paribus, increases its price? But what critics miss is that gains are not limited to the short run. "Buybacks do increase the short-term stock price – but they increase the long-term stock return ev...

How Companies Pay Shareholders: Buybacks Don’t Subtract From Wages  Share   Share Trending Another root of misunderstandings is a simple lack of knowledge about the basics of accounting practices. Buybacks aren't a subtraction from worker salaries or research and development. They are financed out of profits, i.e., what's left over after workers and suppliers and the tax man, etc., have been paid. Politicians should know better before they speak, but often they do not. "For example, when Senators Schumer and Sanders launched their anti-buyback proposal, they wrote: ‘When more than 90 p...

Don’t Let the Short-Termism Bogeyman Scare You Summary.    The author, a professor at Harvard Law School, argues that concerns about the perils of short-termism—and support for measures that would insulate corporate leaders from the outside pressures that allegedly make them myopic—are long on alarming rhetoric and short on empirical evidence or economic logic. Furthermore, he writes, the threat of hedge fund activism should be expected to discourage managerial slack and underperformance, thus playing an important disciplinary role and incentivizing leaders to enhance shareholder v...