2017 US Stock Market: The Fraction of Institutional Ownership

In 2017, the United States stock market witnessed a significant surge, with institutional investors playing a pivotal role. This article delves into the fraction of institutional ownership in the US stock market during that year, offering insights into the influence these investors had on the market's performance.

Understanding Institutional Ownership

Institutional ownership refers to the percentage of a company's shares held by institutional investors, such as mutual funds, pension funds, insurance companies, and other financial institutions. These entities typically hold large blocks of shares and often have a significant impact on the company's decision-making processes.

The State of Institutional Ownership in 2017

In 2017, the US stock market experienced a surge in institutional ownership. This trend can be attributed to several factors, including:

1. Low-interest Rates: The Federal Reserve's decision to keep interest rates low encouraged institutional investors to seek higher returns in the stock market.




2. Economic Growth: The US economy was on a robust growth trajectory in 2017, boosting investor confidence and increasing the demand for stocks.
3. Diversification: Many institutional investors focused on diversifying their portfolios, leading to increased investments in the US stock market.

The Fraction of Institutional Ownership in 2017

In 2017, institutional ownership accounted for approximately 60-70% of the US stock market. This high fraction indicates the significant influence these investors had on the market's performance.

Impact of Institutional Ownership

The high fraction of institutional ownership in 2017 had several implications for the US stock market:

1. Market Stability: Institutional investors tend to be more stable and long-term investors compared to individual investors. This stability contributed to the overall stability of the stock market.
2. Influence on Stock Prices: The decisions made by institutional investors, such as buying or selling large blocks of shares, can significantly impact stock prices.
3. Corporate Governance: Institutional investors often engage in active corporate governance, advocating for better management practices and shareholder value.

Case Study: Apple Inc.

One notable example of the influence of institutional ownership in 2017 is Apple Inc. In that year, institutional investors held a significant portion of Apple's shares. This ownership allowed them to influence the company's decision-making processes, including its dividend policy and share buyback program.

Conclusion

The fraction of institutional ownership in the US stock market in 2017 was a crucial factor in shaping the market's performance. As these investors continued to play a pivotal role in the market, understanding their influence becomes essential for investors and market participants alike.