Fourth, the development of ETF has led to the increase of volatility of its underlying. Lin Xiaodong said that most of the competition of ETFs is in the secondary market, which has not affected the market volatility of its asset classes.
Fifth, index investment leads to market concentration. Lin Xiaodong said that from 1979 to 2016, the market share of Small cap stocks in US listed companies had been maintained at 1.5%, and there was no change in the market structure due to the development of index funds.
Sixth, passive investment can not participate in corporate governance. Lin Xiaodong believes that as a passive investor, he will look at the whole corporate governance from four aspects: the board of directors, the governance structure and compensation, as well as the risk management of the whole company.