What you've written is not entirely accurate.
I was accurate, just not complete. Yes, you do have input into some funds in a similar way to owning stock in a company has input into that company (though not exactly the same, see below), but you have no input into how they manage their assets (the stocks that make up the fund). Owning part of a fund is a little bit like owning part of a shell corporation (unless you own a whole lot of it by yourself, in which case you might have meaningful input by leverage (aka not "legal" but rather "effective" ownership)).
A shell corporation is a corporation without active business operations or significant assets.
A fund does not own the stocks (e.g. Mutual Fund)
Unlike stock, mutual fund shares do not give its holders any voting rights. A share of a mutual fund represents investments in many different stocks (or other securities) instead of just one holding.
The key (legal) word there is represents. A share of a fund represents investment in many different stocks. It isn't actual investment in many different stocks, it represents it.
represent: To have as a meaning, suggestion, or association; stand for or symbolize.
It symbolizes ownership in the underlying stocks, which is to say, its not in any way shape or form actual ownership in the stocks. Not one iota.
The fund manager, which might be a corporation (i.e. BlackRock) owns the stock. Whatever name is on the stock purchase order owns the stock (it must be a person (a Corporation is a legal person, a fund is not)).
A fund is a pool of money set aside for a specific purpose.
A fund is just a pool of money. That is all it is. It owns nothing, it holds no assets, its not anything at all. Just like a shell company.
The company that created the fund has contracts they must follow as a legal corporation, but the fund itself (that which you are buying) is nothing. The fund manager may have contractual obligations to purchasers of a funds "stock" (which may give you "voting rights" to influence the fund manager), but the fund itself is nothing. It's a shell, and that is what a stock in a mutual fund is; a piece of a money pool (where you don't actually own any of the money, you only have withdrawal rights). The money you put in belongs to the corporation that set up the fund to do with as they please (within the bounds of the contract that sets up the fund).
From the SEC on the definition of funds (page 8):
Lack of Control. Investors in both mutual funds and ETFs cannot directly influence which securities are included in the funds’ portfolios.
It may seem like I am splitting hairs here, but this has fundamental implications for the ownership of the underlying stocks (the REAL companies) and the money that resides in the pool of money itself (aka the fund).
The money you give them is theirs to do with as they please. You have no input into their use of the money you give them. The only thing you can do with that money is withdraw it (sell your share). When you sell a share, it doesn't in any way change any of the stock ownership of the fund (unless you sell so many that it forces them to sell shares to fulfill their contract to give you money for that withdrawal).
The point of both this video and my paper on this topic (which goes into much greater detail than the video) is that these funds own these other companies.
For example, BlackRock owns almost 8% of General Motors. They don't really, if you read my report, because BlackRock doesn't own BlackRock. But the legal entity BlackRock does have ALL legal ownership of 8% of the stock of General Motors. It doesn't matter if most of the money they used to buy that stock is from a mutual fund that got 30% of its funding from selling shares in that fund to 401k's. That funding source is irrelevant to who owns the stock; to who owns GM.
What you've written is not entirely accurate.
I was accurate, just not complete. Yes, you do have input into the fund in a similar way to owning stock in a company has input into that company (though not exactly the same, see below), but you have no input into how they manage their assets (the stocks that make up the fund). Owning part of a fund is a little bit like owning part of a shell corporation (unless you own a whole lot of it by yourself, in which case you might have meaningful input by leverage (aka not "legal" but rather "effective" ownership)).
A shell corporation is a corporation without active business operations or significant assets.
A fund does not own the stocks (e.g. Mutual Fund)
Unlike stock, mutual fund shares do not give its holders any voting rights. A share of a mutual fund represents investments in many different stocks (or other securities) instead of just one holding.
The key (legal) word there is represents. A share of a fund represents investment in many different stocks. It isn't actual investment in many different stocks, it represents it.
represent: To have as a meaning, suggestion, or association; stand for or symbolize.
It symbolizes ownership in the underlying stocks, which is to say, its not in any way shape or form actual ownership in the stocks. Not one iota.
The fund manager, which might be a corporation (i.e. BlackRock) owns the stock. Whatever name is on the stock purchase order owns the stock (it must be a person (a Corporation is a legal person, a fund is not)).
A fund is a pool of money set aside for a specific purpose.
A fund is just a pool of money. That is all it is. It owns nothing, it holds no assets, its not anything at all. Just like a shell company.
The company that created the fund has contracts they must follow as a legal corporation, but the fund itself (that which you are buying) is nothing. The fund manager may have contractual obligations to purchasers of a funds "stock" (which may give you "voting rights" to influence the fund manager), but the fund itself is nothing. It's a shell, and that is what a stock in a mutual fund is; a piece of a money pool (where you don't actually own any of the money, you only have withdrawal rights). The money you put in belongs to the corporation that set up the fund to do with as they please (within the bounds of the contract that sets up the fund).
From the SEC on the definition of funds (page 8):
Lack of Control. Investors in both mutual funds and ETFs cannot directly influence which securities are included in the funds’ portfolios.
It may seem like I am splitting hairs here, but this has fundamental implications for the ownership of the underlying stocks (the REAL companies) and the money that resides in the pool of money itself (aka the fund).
The money you give them is theirs to do with as they please. You have no input into their use of the money you give them. The only thing you can do with that money is withdraw it (sell your share). When you sell a share, it doesn't in any way change any of the stock ownership of the fund (unless you sell so many that it forces them to sell shares to fulfill their contract to give you money for that withdrawal).
The point of both this video and my paper on this topic (which goes into much greater detail than the video) is that these funds own these other companies.
For example, BlackRock owns almost 8% of General Motors. They don't really, if you read my report, because BlackRock doesn't own BlackRock. But the legal entity BlackRock does have ALL legal ownership of 8% of the stock of General Motors. It doesn't matter if most of the money they used to buy that stock is from a mutual fund that got 30% of its funding from selling shares in that fund to 401k's. That funding source is irrelevant to who owns the stock; to who owns GM.
What you've written is not entirely accurate.
I was accurate, just not complete. Yes, you do have input into the fund in a similar way to owning stock in a company has input into that company (though not exactly the same, see below), but you have no input into how they manage their assets (the stocks that make up the fund). Owning part of a fund is a little bit like owning part of a shell corporation (unless you own a whole lot of it by yourself, in which case you might have meaningful input by leverage (aka not "legal" but rather "effective" ownership)).
A shell corporation is a corporation without active business operations or significant assets.
A fund does not own the stocks (e.g. Mutual Fund)
Unlike stock, mutual fund shares do not give its holders any voting rights. A share of a mutual fund represents investments in many different stocks (or other securities) instead of just one holding.
The key (legal) word there is represents. A share of a fund represents investment in many different stocks. It isn't actual investment in many different stocks, it represents it.
represent: To have as a meaning, suggestion, or association; stand for or symbolize.
It symbolizes ownership in the underlying stocks, which is to say, its not in any way shape or form actual ownership in the stocks. Not one iota.
The fund manager, which might be a corporation (i.e. BlackRock) owns the stock. Whatever name is on the stock purchase order owns the stock (it must be a person (a Corporation is a legal person, a fund is not)).
A fund is a pool of money set aside for a specific purpose.
A fund is just a pool of money. That is all it is. It owns nothing, it holds no assets, its not anything at all. Just like a shell company.
The company that created the fund has contracts they must follow as a legal corporation, but the fund itself (that which you are buying) is nothing. The fund manager may have contractual obligations to purchasers of a funds "stock" (which may give you "voting rights" to influence the fund manager), but the fund itself is nothing. It's a shell, and that is what a stock in a mutual fund is; a piece of a money pool (where you don't actually own any of the money, you only have withdrawal rights). The money you put in belongs to the corporation that set up the fund to do with as they please (within the bounds of the contract that sets up the fund).
From the SEC on the definition of funds (page 8):
Lack of Control. Investors in both mutual funds and ETFs cannot directly influence which securities are included in the funds’ portfolios.
It may seem like I am splitting hairs here, but this has fundamental implications for the ownership of the underlying stocks (the REAL companies) and the money that resides in the pool of money itself (aka the fund).
The money you give them is theirs to do with as they please. You have no input into their use of the money you give them. The only thing you can do with that money is withdraw it (sell your share). When you sell a share, it doesn't in any way change any of the stock ownership of the fund (unless you sell so many that it forces them to sell shares to fulfill their contract to give you money for that withdrawal).
The point of both this video and my paper on this topic (which goes into much greater detail than the video) is that these funds own these other companies.
For example, BlackRock owns almost 8% of General Motors. They don't really, if you read my report, because BlackRock doesn't own BlackRock. But BlackRock does have technical ownership of 8% of the stock of General Motors. It doesn't matter if most of the money they used to buy that stock is from a mutual fund that got 30% of its funding from selling shares in that fund to 401k's. That funding source is irrelevant to who owns the stock; to who owns GM.
What you've written is not entirely accurate.
I was accurate, just not complete. Yes, you do have input into the fund in a similar way to owning stock in a company has input into that company (though not exactly the same, see below), but you have no input into how they manage their assets (the stocks that make up the fund). Owning part of a fund is a little bit like owning part of a shell corporation (unless you own a whole lot of it by yourself, in which case you might have meaningful input by leverage (aka not "legal" but rather "effective" ownership)).
A shell corporation is a corporation without active business operations or significant assets.
A fund does not own the stocks (e.g. Mutual Fund)
Unlike stock, mutual fund shares do not give its holders any voting rights. A share of a mutual fund represents investments in many different stocks (or other securities) instead of just one holding.
The key (legal) word there is represents. A share of a fund represents investment in many different stocks. It isn't actual investment in many different stocks, it represents it.
represent: To have as a meaning, suggestion, or association; stand for or symbolize.
It symbolizes ownership in the underlying stocks, which is to say, its not in any way shape or form actual ownership in the stocks. Not one iota.
The fund manager, which might be a corporation (i.e. BlackRock) owns the stock. Whatever name is on the stock purchase order owns the stock (it must be a person (a Corporation is a legal person, a fund is not)).
A fund is a pool of money set aside for a specific purpose.
A fund is just a pool of money. That is all it is. It owns nothing, it holds no assets, its not anything at all. Just like a shell company.
The company that created the fund has contracts they must follow as a legal corporation, but the fund itself (that which you are buying) is nothing. The fund manager may have contractual obligations to purchasers of a funds "stock" (which may give you "voting rights" to influence the fund manager), but the fund itself is nothing. A shell, and that is what a stock in a mutual fund is. A stock in a money pool. The money you put in belongs to the corporation that set up the fund to do with as they please (within the bounds of the contract that sets up the fund).
From the SEC on the definition of funds (page 8):
Lack of Control. Investors in both mutual funds and ETFs cannot directly influence which securities are included in the funds’ portfolios.
It may seem like I am splitting hairs here, but this has fundamental implications for the ownership of the underlying stocks (the REAL companies) and the money that resides in the pool of money itself (aka the fund).
The money you give them is theirs to do with as they please. You have no input into their use of the money you give them. The only thing you can do with that money is withdraw it (sell your share). When you sell a share, it doesn't in any way change any of the stock ownership of the fund (unless you sell so many that it forces them to sell shares to fulfill their contract to give you money for that withdrawal).
The point of both this video and my paper on this topic (which goes into much greater detail than the video) is that these funds own these other companies.
For example, BlackRock owns almost 8% of General Motors. They don't really, if you read my report, because BlackRock doesn't own BlackRock. But BlackRock does have technical ownership of 8% of the stock of General Motors. It doesn't matter if most of the money they used to buy that stock is from a mutual fund that got 30% of its funding from selling shares in that fund to 401k's. That funding source is irrelevant to who owns the stock; to who owns GM.
What you've written is not entirely accurate.
I was accurate, just not complete. Yes, you do have input into the fund in a similar way to owning stock in a company has input into that company (though not exactly the same, see below), but you have no input into how they manage their assets (the stocks that make up the fund). Owning part of a fund is a little bit like owning part of a shell corporation (unless you own a whole lot of it by yourself, in which case you might have meaningful input by leverage (aka not "legal" but rather "effective" ownership).
A shell corporation is a corporation without active business operations or significant assets.
A fund does not own the stocks (e.g. Mutual Fund)
Unlike stock, mutual fund shares do not give its holders any voting rights. A share of a mutual fund represents investments in many different stocks (or other securities) instead of just one holding.
The key (legal) word there is represents. A share of a fund represents investment in many different stocks. It isn't actual investment in many different stocks, it represents it.
represent: To have as a meaning, suggestion, or association; stand for or symbolize.
It symbolizes ownership in the underlying stocks, which is to say, its not in any way shape or form actual ownership in the stocks. Not one iota.
The fund manager, which might be a corporation (i.e. BlackRock) owns the stock. Whatever name is on the stock purchase order owns the stock (it must be a person (a Corporation is a legal person, a fund is not)).
A fund is a pool of money set aside for a specific purpose.
A fund is just a pool of money. That is all it is. It owns nothing, it holds no assets, its not anything at all. Just like a shell company.
The company that created the fund has contracts they must follow as a legal corporation, but the fund itself (that which you are buying) is nothing. The fund manager may have contractual obligations to purchasers of a funds "stock" (which may give you "voting rights" to influence the fund manager), but the fund itself is nothing. A shell, and that is what a stock in a mutual fund is. A stock in a money pool. The money you put in belongs to the corporation that set up the fund to do with as they please (within the bounds of the contract that sets up the fund).
From the SEC on the definition of funds (page 8):
Lack of Control. Investors in both mutual funds and ETFs cannot directly influence which securities are included in the funds’ portfolios.
It may seem like I am splitting hairs here, but this has fundamental implications for the ownership of the underlying stocks (the REAL companies) and the money that resides in the pool of money itself (aka the fund).
The money you give them is theirs to do with as they please. You have no input into their use of the money you give them. The only thing you can do with that money is withdraw it (sell your share). When you sell a share, it doesn't in any way change any of the stock ownership of the fund (unless you sell so many that it forces them to sell shares to fulfill their contract to give you money for that withdrawal).
The point of both this video and my paper on this topic (which goes into much greater detail than the video) is that these funds own these other companies.
For example, BlackRock owns almost 8% of General Motors. They don't really, if you read my report, because BlackRock doesn't own BlackRock. But BlackRock does have technical ownership of 8% of the stock of General Motors. It doesn't matter if most of the money they used to buy that stock is from a mutual fund that got 30% of its funding from selling shares in that fund to 401k's. That funding source is irrelevant to who owns the stock; to who owns GM.
What you've written is not entirely accurate.
I was accurate, just not complete. Yes, you do have input into the fund in a similar way to owning stock in a company has input into that company (though not exactly the same, see below), but you have no input into how they manage their assets (the stocks that make up the fund). Owning part of a fund is a little bit like owning part of a shell corporation (unless you own a whole lot of it by yourself, in which case you might have meaningful input by leverage (aka not "legal" but rather "effective" ownership).
A shell corporation is a corporation without active business operations or significant assets.
A fund does not own the stocks (e.g. Mutual Fund)
Unlike stock, mutual fund shares do not give its holders any voting rights. A share of a mutual fund represents investments in many different stocks (or other securities) instead of just one holding.
The key (legal) word there is represents. A share of a fund represents investment in many different stocks. It isn't actual investment in many different stocks, it represents it.
represent: To have as a meaning, suggestion, or association; stand for or symbolize.
It symbolizes ownership in the underlying stocks, which is to say, its not in any way shape or form actual ownership in the stocks. Not one iota.
The fund manager, which might be a corporation (i.e. BlackRock) owns the stock. Whatever name is on the stock purchase order owns the stock (it must be a person (a Corporation is a legal person, a fund is not)).
A fund is a pool of money set aside for a specific purpose.
A fund is just a pool of money. That is all it is. It owns nothing, it holds no assets, its not anything at all. Just like a shell company.
The company that created the fund has contracts they must follow as a legal corporation, but the fund itself (that which you are buying) is nothing. The fund manager may have contractual obligations to purchasers of a funds "stock" (which may give you "voting rights" to influence the fund manager), but the fund itself is nothing. A shell, and that is what a stock in a mutual fund is. A stock in a money pool. The money you put in belongs to the corporation that set up the fund to do with as they please (within the bounds of the contract that sets up the fund).
From the SEC on the definition of funds (page 8):
Lack of Control. Investors in both mutual funds and ETFs cannot directly influence which securities are included in the funds’ portfolios.
It may seem like I am splitting hairs here, but this has fundamental implications for the ownership of the underlying stocks (the REAL companies) and the money that resides in the pool of money itself (aka the fund).
The money you give them is theirs to do with as they please. You have no input into their use of the money you give them. The only thing you can do with that money is withdraw it (sell your share). When you sell a share, it doesn't in any way change any of the stock ownership of the fund (unless you sell so many that it forces them to sell shares to fulfill their contract to give you money for that withdrawal).
The point of both this video and my paper on this topic (which goes into much greater detail than the video) is that these funds own these other companies.
For example, BlackRock owns almost 8% of General Motors. They don't really, if you read my report, because BlackRock doesn't own BlackRock. But BlackRock does have technical ownership of 8% of the stock of General Motors. It doesn't matter if most of the money they used to buy that stock is from a mutual fund that got 30% of its funding from selling shares in that fund to 401k's. That funding source is irrelevant to who owns the stock; to who owns GM.
What you've written is not entirely accurate.
I was accurate, just not complete. Yes, you do have input into the fund in a similar way to owning stock in a company has input into that company (though not exactly the same, see below), but you have no input into how they manage their assets (the stocks that make up the fund). Owning part of a fund is a little bit like owning part of a shell corporation (unless you own a whole lot of it by yourself, in which case you might have meaningful input by leverage (aka not "legal" but rather "effective" ownership).
A shell corporation is a corporation without active business operations or significant assets.
A fund does not own the stocks (e.g. Mutual Fund)
Unlike stock, mutual fund shares do not give its holders any voting rights. A share of a mutual fund represents investments in many different stocks (or other securities) instead of just one holding.
The key (legal) word there is represents. A share of a fund represents investment in many different stocks. It isn't actual investment in many different stocks, it represents it.
represent: To have as a meaning, suggestion, or association; stand for or symbolize.
It symbolizes ownership in the underlying stocks, which is to say, its not in any way shape or form actual ownership in the stocks. Not one iota.
The fund manager, which might be a corporation (i.e. BlackRock) owns the stock. Whatever name is on the stock purchase order owns the stock (it must be a person (a Corporation is a legal person, a fund is not)).
A fund is a pool of money set aside for a specific purpose.
A fund is just a pool of money. That is all it is. It owns nothing, it holds no assets, its not anything at all. Just like a shell company.
The company that created the fund has contracts they must follow as a legal corporation, but the fund itself (that which you are buying) is nothing. The fund manager may have contractual obligations to purchasers of a funds "stock" (which may give you "voting rights" to influence the fund manager), but the fund itself is nothing. A shell, and that is what a stock in a mutual fund is. A stock in a money pool. The money you put in belongs to the corporation that set up the fund to do with as they please (within the bounds of the contract that sets up the fund).
From the SEC on the definition of funds (page 8):
Lack of Control. Investors in both mutual funds and ETFs cannot directly influence which securities are included in the funds’ portfolios.
It may seem like I am splitting hairs here, but this has fundamental implications for the ownership of the underlying stocks (the REAL companies) and the money that resides in the pool of money itself (the money in the fund).
The money you give them is theirs to do with as they please. You have no input into their use of the money you give them. The only thing you can do with that money is withdraw it (sell your share). When you sell a share, it doesn't in any way change any of the stock ownership of the fund (unless you sell so many that it forces them to sell shares to fulfill their contract to give you money for that withdrawal).
The point of both this video and my paper on this topic (which goes into much greater detail than the video) is that these funds own these other companies.
For example, BlackRock owns almost 8% of General Motors. They don't really, if you read my report, because BlackRock doesn't own BlackRock. But BlackRock does have technical ownership of 8% of the stock of General Motors. It doesn't matter if most of the money they used to buy that stock is from a mutual fund that got 30% of its funding from selling shares in that fund to 401k's. That funding source is irrelevant to who owns the stock; to who owns GM.
What you've written is not entirely accurate.
I was accurate, just not complete. Yes, you do have input into the fund in a similar way to owning stock in a company has input into that company (though not exactly the same, see below), but you have no input into how they manage their assets (the stocks that make up the fund). Owning part of a fund is a little bit like owning part of a shell corporation (unless you own a whole lot of it by yourself, in which case you might have meaningful input by leverage (aka not "legal" but rather "effective" ownership).
A shell corporation is a corporation without active business operations or significant assets.
A fund does not own the stocks (e.g. Mutual Fund)
Unlike stock, mutual fund shares do not give its holders any voting rights. A share of a mutual fund represents investments in many different stocks (or other securities) instead of just one holding.
The key (legal) word there is represents. A share of a fund represents investment in many different stocks. It isn't actual investment in many different stocks, it represents it.
represent: To have as a meaning, suggestion, or association; stand for or symbolize.
It symbolizes ownership in the underlying stocks, which is to say, its not in any way shape or form actual ownership in the stocks. Not one iota.
The fund manager, which might be a corporation (i.e. BlackRock) owns the stock. Whatever name is on the stock purchase order owns the stock (it must be a person (a Corporation is a legal person, a fund is not)).
A fund is a pool of money set aside for a specific purpose.
A fund is just a pool of money. That is all it is. It owns nothing, it holds no assets, its not anything at all. Just like a shell company.
The company that created the fund has contracts they must follow as a legal corporation, but the fund itself (that which you are buying) is nothing. The fund manager may have contractual obligations to purchasers of a funds "stock" (which may give you "voting rights" to influence the fund manager), but the fund itself is nothing. A shell, and that is what a stock in a mutual fund is. A stock in a money pool. The money you put in belongs to the corporation that set up the fund to do with as they please (within the bounds of the contract that sets up the fund).
From the SEC on the definition of funds (page 8):
Lack of Control. Investors in both mutual funds and ETFs cannot directly influence which securities are included in the funds’ portfolios.
It may seem like I am splitting hairs here, but this has fundamental implications for the ownership of the underlying stocks (the REAL companies).
The money you give them is theirs to do with as they please. You have no input into their use of the money you give them. The only thing you can do with that money is withdraw it (sell your share). When you sell a share, it doesn't in any way change any of the stock ownership of the fund (unless you sell so many that it forces them to sell shares to fulfill their contract to give you money for that withdrawal).
The point of both this video and my paper on this topic (which goes into much greater detail than the video) is that these funds own these other companies.
For example, BlackRock owns almost 8% of General Motors. They don't really, if you read my report, because BlackRock doesn't own BlackRock. But BlackRock does have technical ownership of 8% of the stock of General Motors. It doesn't matter if most of the money they used to buy that stock is from a mutual fund that got 30% of its funding from selling shares in that fund to 401k's. That funding source is irrelevant to who owns the stock; to who owns GM.
What you've written is not entirely accurate.
I was accurate, just not complete. Yes, you do have input into the fund in a similar way to owning stock in a company has input into that company (though not exactly the same, see below), but you have no input into how they manage their assets (the stocks that make up the fund). Owning part of a fund is a little bit like owning part of a shell corporation (unless you own a whole lot of it by yourself, in which case you might have meaningful input by leverage (aka not "legal" but rather "effective" ownership).
A shell corporation is a corporation without active business operations or significant assets.
A fund does not own the stocks (e.g. Mutual Fund)
Unlike stock, mutual fund shares do not give its holders any voting rights. A share of a mutual fund represents investments in many different stocks (or other securities) instead of just one holding.
The key (legal) word there is represents. A share of a fund represents investment in many different stocks. It isn't actual investment in many different stocks, it represents it.
represent: To have as a meaning, suggestion, or association; stand for or symbolize.
It symbolizes ownership in the underlying stocks, which is to say, its not in any way shape or form actual ownership in the stocks. Not one iota.
The fund manager, which might be a corporation (i.e. BlackRock) owns the stock. Whatever name is on the stock owns the funds (it must be a person (a Corporation is a legal person, a fund is not)).
A fund is a pool of money set aside for a specific purpose.
A fund is just a pool of money. That is all it is. It owns nothing, it holds no assets, its not anything at all. Just like a shell company.
The company that created the fund has contracts they must follow as a legal corporation, but the fund itself (that which you are buying) is nothing. The fund manager may have contractual obligations to purchasers of a funds "stock" (which may give you "voting rights" to influence the fund manager), but the fund itself is nothing. A shell, and that is what a stock in a mutual fund is. A stock in a money pool. The money you put in belongs to the corporation that set up the fund to do with as they please (within the bounds of the contract that sets up the fund).
From the SEC on the definition of funds (page 8):
Lack of Control. Investors in both mutual funds and ETFs cannot directly influence which securities are included in the funds’ portfolios.
It may seem like I am splitting hairs here, but this has fundamental implications for the ownership of the underlying stocks (the REAL companies).
The money you give them is theirs to do with as they please. You have no input into their use of the money you give them. The only thing you can do with that money is withdraw it (sell your share). When you sell a share, it doesn't in any way change any of the stock ownership of the fund (unless you sell so many that it forces them to sell shares to fulfill their contract to give you money for that withdrawal).
The point of both this video and my paper on this topic (which goes into much greater detail than the video) is that these funds own these other companies.
For example, BlackRock owns almost 8% of General Motors. They don't really, if you read my report, because BlackRock doesn't own BlackRock. But BlackRock does have technical ownership of 8% of the stock of General Motors. It doesn't matter if most of the money they used to buy that stock is from a mutual fund that got 30% of its funding from selling shares in that fund to 401k's. That funding source is irrelevant to who owns the stock; to who owns GM.
What you've written is not entirely accurate.
I was accurate, just not complete. Yes, you do have input into the fund in a similar way to owning stock in a company has input into that company (though not exactly the same, see below), but you have no input into how they manage their assets (the stocks that make up the fund). Owning part of a fund is a little bit like owning part of a shell corporation (unless you own a whole lot of it by yourself, in which case you might have meaningful input by leverage (aka not "legal" but rather "effective" ownership).
A shell corporation is a corporation without active business operations or significant assets.
A fund does not own the stocks (e.g. Mutual Fund)
Unlike stock, mutual fund shares do not give its holders any voting rights. A share of a mutual fund represents investments in many different stocks (or other securities) instead of just one holding.
The key (legal) word there is represents. A share of a fund represents investment in many different stocks. It isn't actual investment in many different stocks, it represents it.
represent: To have as a meaning, suggestion, or association; stand for or symbolize.
It symbolizes ownership in the underlying stocks, which is to say, its not in any way shape or form actual ownership in the stocks. Not one iota.
The fund manager, which might be a corporation (i.e. BlackRock) owns the stock. Whatever name is on the stock owns the funds (it must be a person (a Corporation is a legal person, a fund is not)).
A fund is a pool of money set aside for a specific purpose.
A fund is just a pool of money. That is all it is. It owns nothing, it holds no assets, its not anything at all. Just like a shell company.
The company that created the fund has contracts they must follow as a legal corporation, but the fund itself (that which you are buying) is nothing. The fund manager may have contractual obligations to purchasers of a funds "stock" (which may give you "voting rights" to influence the fund manager), but the fund itself is nothing. A shell, and that is what a stock in a mutual fund is. A stock in a money pool. The money you put in belongs to the corporation that set up the fund to do with as they please (within the bounds of the contract that sets up the fund).
It may seem like I am splitting hairs here, but this has fundamental implications for the ownership of the underlying stocks (the REAL companies).
From the SEC on the definition of funds (page 8):
Lack of Control. Investors in both mutual funds and ETFs cannot directly influence which securities are included in the funds’ portfolios.
The money you give them is theirs to do with as they please. You have no input into their use of the money you give them. The only thing you can do with that money is withdraw it (sell your share). When you sell a share, it doesn't in any way change any of the stock ownership of the fund (unless you sell so many that it forces them to sell shares to fulfill their contract to give you money for that withdrawal).
The point of both this video and my paper on this topic (which goes into much greater detail than the video) is that these funds own these other companies.
For example, BlackRock owns almost 8% of General Motors. They don't really, if you read my report, because BlackRock doesn't own BlackRock. But BlackRock does have technical ownership of 8% of the stock of General Motors. It doesn't matter if most of the money they used to buy that stock is from a mutual fund that got 30% of its funding from selling shares in that fund to 401k's. That funding source is irrelevant to who owns the stock; to who owns GM.
What you've written is not entirely accurate.
I was accurate, just not complete. Yes, you do have input into the fund in a similar way to owning stock in a company has input into that company (though not exactly the same, see below), but you have no input into how they manage their assets (the stocks that make up the fund). Owning part of a fund is a little bit like owning part of a shell corporation (unless you own a whole lot of it by yourself, in which case you might have meaningful input by leverage (aka not "legal" but rather "effective" ownership).
A shell corporation is a corporation without active business operations or significant assets.
A fund does not own the stocks (e.g. Mutual Fund)
Unlike stock, mutual fund shares do not give its holders any voting rights. A share of a mutual fund represents investments in many different stocks (or other securities) instead of just one holding.
The key (legal) word there is represents. A share of a fund represents investment in many different stocks. It isn't actual investment in many different stocks, it represents it.
represent: To have as a meaning, suggestion, or association; stand for or symbolize.
It symbolizes ownership in the underlying stocks, which is to say, its not in any way shape or form actual ownership in the stocks. Not one iota.
The fund manager (which might be a corporation (i.e. BlackRock) owns the stock. Whatever name is on the stock owns the funds (it must be a person (a Corporation is a legal person, a fund is not)).
A fund is a pool of money set aside for a specific purpose.
A fund is just a pool of money. That is all it is. It owns nothing, it holds no assets, its not anything at all. Just like a shell company.
The company that created the fund has contracts they must follow as a legal corporation, but the fund itself (that which you are buying) is nothing. The fund manager may have contractual obligations to purchasers of a funds "stock" (which may give you "voting rights" to influence the fund manager), but the fund itself is nothing. A shell, and that is what a stock in a mutual fund is. A stock in a money pool. The money you put in belongs to the corporation that set up the fund to do with as they please (within the bounds of the contract that sets up the fund).
It may seem like I am splitting hairs here, but this has fundamental implications for the ownership of the underlying stocks (the REAL companies).
From the SEC on the definition of funds (page 8):
Lack of Control. Investors in both mutual funds and ETFs cannot directly influence which securities are included in the funds’ portfolios.
The money you give them is theirs to do with as they please. You have no input into their use of the money you give them. The only thing you can do with that money is withdraw it (sell your share). When you sell a share, it doesn't in any way change any of the stock ownership of the fund (unless you sell so many that it forces them to sell shares to fulfill their contract to give you money for that withdrawal).
The point of both this video and my paper on this topic (which goes into much greater detail than the video) is that these funds own these other companies.
For example, BlackRock owns almost 8% of General Motors. They don't really, if you read my report, because BlackRock doesn't own BlackRock. But BlackRock does have technical ownership of 8% of the stock of General Motors. It doesn't matter if most of the money they used to buy that stock is from a mutual fund that got 30% of its funding from selling shares in that fund to 401k's. That funding source is irrelevant to who owns the stock; to who owns GM.