Vol. 19, No. 2, 2021
Ananth Madhavan, Aleksander Sobczyk and Andrew Ang
The proliferation of funds juxtaposed against the decline in individual stock listing since the mid-1990s raises questions about crowding in individual stocks or style factors. We examine these issues by characterizing the common components of funds from 2007 through 2018. A key difference from the previous literature on common factors in fund returns is that we explicitly look at fund holdings over time for all US-listed equity active mutual funds
and exchange-traded funds and contrast their differences. We also explore the implications of this proliferation in funds for the pricing of individual securities and funds.