Indexing does not set valuations because it buys everything proportionally and therefore cannot be overweighting large stocks relative to small stocks, and index fund trading represents only 5% of daily NYSE volume, so the impact on pricing is minimal.
factualpending
Speaker
Rick FerryEvidence Quote
“indexing just takes the market as it is and buys everything so they're not over buying the big St stocks or under buying the small stocks... the amount of trading on the stock exchange that's from index funds it's only 5% of the daily volume”
Source
Passive Investing Has Had a Major Impact on the Market: Here is What It Means for Your Portfolio— Excess ReturnsCreated: 8/11/2026, 6:34:01 AM
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