Levine: Index managers cannot analyze company-specific performance across thousands of holdings
Matt Levine · Matt Levine – Money Stuff (Capital Allocators, EP.97) · Apr 29, 2019 · at 27:55
Bloomberg columnist Matt Levine discusses the corporate governance paradox of mega-asset managers like Vanguard compared to concentrated activist investors.
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“If you're a Vanguard, you can't process that question for thousands of companies. You don't have Industry analysts for a lot of those, you know, classic index fund. And so you're thinking about much more general questions, like what is the structure of good corporate governance? Should the board be independent? And should the chairman be the same as the CEO? And these like sort of very generic questions, which probably add value, but you tend to get generic answers if you're asking questions about 3000 companies, and you can only focus on sort of high level governance stuff.”
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