I’m European and even I’m part of the American institutional investor class.
Retirement funds in stock based ETFs = everyone is part of these large insitutional funds. Until my requested change taked place, my fund mostly holds Blackrock (iShares) run ETFs and a few other American ones. Soon it’ll be Xtrackers and a few other European ones with no US specific fund, but I’m not rich so this is a drop in the sea.
Lol, you are not part of the American institutional investor class. You invest through an American fund.
Those are not the same thing.
But even granting you this fantasy, it would still be in Europe’s best interest that European retail investors invest through European funds instead of American ones.
These institutional investors are literally made up of millions of people’s retirement funds. That’s what they are, the biggest ones anyway. If you hold their ETFs, you’re also part of it.
I’m not saying you or I hold any sway over them, I’m saying that’s where Blackrock’s huuuuge ass AUM is derived from.
It’s both irrelevant and extremely relevant though.
It’s irrelevant if you only consider who gets to make management decisions. It’s relevant if you consider who the beneficiaries are. Yes the fund manager gets a significant management fee regardless of performance, etc, but when stock go up, it’s the people whose money is in the funds that see their number go up. I’m saying there’s still a lot of European money that’s growing through these American funds buying European companies. So it’s not like all the value is going away to the US suddenly. Just most of it, which is still just as bad.
Obviously it would be even better if Europeans’ retirement money was invested through European-managed funds. But I’m saying American funds probably have a larger share of European investors than European funds have American investors, as the American ones are more famous globally. It’s not a 1:1 comparison between European funds investing in the US vs American funds investing in the EU.
The GDP of the US is about $30 trillion USD while the GDP of the EU + UK is about $23 trillion USD. Europe has enough capital to effectively compete with the US, and it does. “American institutional investors” include a ton of foreign capital. This isn’t a “David vs Goliath” situation
We definitely can compete. But we don’t really compete.
We have always given the US first pickings in exchange for the security umbrella.
Things like the Plaza and Louvre accords and supporting dollar supremacy and the wars in Iraq and Afghanistan are the obvious examples. But there are many, many smaller examples, such as not fully enforcing our tax codes on American multinationals.
If we would actually compete, we would be significantly richer and more powerful.
P.s. when comparing major economies, PPP makes more sense, because Americans paying $6 for a beer when we pay €3 doesn’t actually make them any richer in any real sense.
No, you are attacking a straw man.
Of course it’s not black and white, but the overall balance is much more towards American capital than European capital.
Even for a company like Unilever, American institutional investors hold a much larger share than European investors hold in Mondelez.
That’s the point I was making.
I’m European and even I’m part of the American institutional investor class.
Retirement funds in stock based ETFs = everyone is part of these large insitutional funds. Until my requested change taked place, my fund mostly holds Blackrock (iShares) run ETFs and a few other American ones. Soon it’ll be Xtrackers and a few other European ones with no US specific fund, but I’m not rich so this is a drop in the sea.
Lol, you are not part of the American institutional investor class. You invest through an American fund.
Those are not the same thing.
But even granting you this fantasy, it would still be in Europe’s best interest that European retail investors invest through European funds instead of American ones.
These institutional investors are literally made up of millions of people’s retirement funds. That’s what they are, the biggest ones anyway. If you hold their ETFs, you’re also part of it.
I’m not saying you or I hold any sway over them, I’m saying that’s where Blackrock’s huuuuge ass AUM is derived from.
What you say isn’t false, but totally irrelevant to the point I am making. To the point that it is either naive or purposefully misleading.
Congratulations for understanding the basics of how mutual funds work.
But you are not in a position to discuss how the EU can get better in control of our own capital assets.
It’s both irrelevant and extremely relevant though.
It’s irrelevant if you only consider who gets to make management decisions. It’s relevant if you consider who the beneficiaries are. Yes the fund manager gets a significant management fee regardless of performance, etc, but when stock go up, it’s the people whose money is in the funds that see their number go up. I’m saying there’s still a lot of European money that’s growing through these American funds buying European companies. So it’s not like all the value is going away to the US suddenly. Just most of it, which is still just as bad.
Obviously it would be even better if Europeans’ retirement money was invested through European-managed funds. But I’m saying American funds probably have a larger share of European investors than European funds have American investors, as the American ones are more famous globally. It’s not a 1:1 comparison between European funds investing in the US vs American funds investing in the EU.
The GDP of the US is about $30 trillion USD while the GDP of the EU + UK is about $23 trillion USD. Europe has enough capital to effectively compete with the US, and it does. “American institutional investors” include a ton of foreign capital. This isn’t a “David vs Goliath” situation
We definitely can compete. But we don’t really compete.
We have always given the US first pickings in exchange for the security umbrella.
Things like the Plaza and Louvre accords and supporting dollar supremacy and the wars in Iraq and Afghanistan are the obvious examples. But there are many, many smaller examples, such as not fully enforcing our tax codes on American multinationals.
If we would actually compete, we would be significantly richer and more powerful.
P.s. when comparing major economies, PPP makes more sense, because Americans paying $6 for a beer when we pay €3 doesn’t actually make them any richer in any real sense.
And the EU+UK is about 10% larger than the US.
China is 39T, EU+UK is 33T, US is 30T.