Sunday, January 30, 2022

Trillions (Robin Wigglesworth)

Many Americans have retirement accounts at Vanguard, BlackRock, or a host of other large mutual and index fund providers. Those organizations transformed the use of the stock market and investing from one where an investor’s monies were actively managed to one run mostly on technology and passive management. This was due to the belief that the best investors in the stock market were not able to beat the performance of indexes such as the S & P or the Dow Jones Industrial Average. 

Robin Wigglesworth chronicles the transformation in investing in Trillions: How a Band of Wall Street Renegades Invented the Index Fund and Changed Finance Forever. In it, the stories of how “quants”, or individuals who used quantitative analysis and computer formulas in investing, helped develop the index fund (think Vanguard), the exchange-traded fund or ETF (think BlackRock), and other investing products that helped store over $25 trillion of wealth in them, more than the gross domestic product of the United States. The latter stages of the book touch on how this evolution in investing was not popular with all of the actors involved in early stage ETF creation and how the changing landscape of investing is leading to niche funds being established, as well as questions on how involved the investing houses should be in matters of politics and business.

Wigglesworth’s book is enjoyable if you like economics, business, and finance. Trillions takes the concept of investing, which can seem very dry if not written well, and weaves it into a great story. The personalities of Jack Bogle, Larry Fink, and others are brought to the forefront as much as the products their companies brought to the table.