The Hidden Governance Fight Over Who Controls Your Index Fund's Shares
If you own an S&P 500 fund or a target-date retirement account, you may soon hold a piece of a company you never chose and can't vote on. The real story behind a potential SpaceX listing isn't the rocket maker's valuation -- it's a quiet split between the major index providers over whether to admit megacap companies that hand their owners little or no voting power.
Bottom Line
The headline is SpaceX, but the substance is control. A behind-the-scenes disagreement among index providers will determine whether millions of ordinary savers end up owning slices of founder-controlled companies with little voting power -- a decision made far above the level of any individual investor. It's a reminder that 'passive' investing involves a chain of active choices someone else is making for you.