Stock Ownership Is Expanding, But Voting Rights Remain in the Minority

Retail investment apps have made stock ownership as easy as a phone tap. However, only a limited portion of these investments reaches the companies, while voting rights are concentrated in a few large institutions. Brokers like XTB are gaining a record number of clients, and ETF savings plans are growing rapidly in Europe. In 2025, 15.1 million ETF savings plans were executed monthly across the continent, with investors transferring 22.7 billion euros. The number of people owning stocks, funds, or ETFs in Almanya reached a record 14.1 million. Yet the benefits of this growth are not distributed equally; the richest 10% hold 57.3% of net wealth, while the bottom quintile has negative net wealth. Furthermore, the voting rights of shares held through index funds are exercised by fund managers rather than investors. The 'Big Three' funds—BlackRock, Vanguard, and State Street—control about a quarter of the votes in S&P 500 companies. This prevents retail investors from having a say in corporate governance. Although BlackRock offers voting rights to some customers, most retail investors do not use this offer. Consequently, while stock ownership spreads to the broader base, decision-making mechanisms remain centralized.

Research shows that every dollar flowing into stocks increases market value by about five dollars, and this effect is permanent. This is because marginal buyers are mostly index and pension funds. Since these funds target a fixed share of stocks, prices need to move significantly to meet new demand. This can increase volatility in the markets. On the other hand, the increasing participation of retail investors helps markets reach a broader base. However, this participation risks deepening inequalities in income distribution. Because stock ownership is concentrated among high-income groups. In Almanya, half of those with a monthly income over 4.000 avro own stocks, while in the under 2.000 avro income group, this ratio is at one-eighth. A similar picture exists across Avrupa: out of a potential 383 million retail investors, only 33 million people own ETFs. Meanwhile, around 10 trilyon avro sits idle in bank accounts.

Young investors, especially those under 40, make up the largest investor group in Almanya. Since 2024, the number of investors in this group has been increasing, and there was a 24% rise in female investors compared to the previous year. However, income level remains the determining factor. Low-income households hold their savings mostly in traditional instruments like deposits and real estate. According to Avrupa Merkez Bankası data, stock and fund ownership are among the most unequally distributed assets. The richest 10% hold more than half of net wealth, while the bottom quintile has net wealth below zero. This means the rise in stock markets benefits the already rich the most. The entry of retail investors into the market, rather than reducing this inequality, could deepen it further.

From a corporate governance perspective, retail stock ownership does not change how voting rights are used. The voting rights of shares held through index funds are exercised by fund managers. This leads to the 'Big Three' funds (BlackRock, Vanguard, and State Street) controlling about a quarter of the votes in S&P 500 companies. These funds are also the largest single shareholder in 88% of companies. This makes it almost impossible for retail investors to have a say in corporate management. Even though BlackRock grants voting rights to some of its customers, the vast majority of retail investors do not exercise this right. Consequently, while stock ownership spreads to the base, decision-making mechanisms are still concentrated in the hands of a few large institutions.

In summary, thanks to retail investment apps, stock ownership has become easier and more widespread than ever before. However, this does not enable investors to have a say in corporate management. Voting rights are largely concentrated in the hands of index fund managers. Additionally, the increase in stock ownership has the potential to deepen, rather than alleviate, income inequality. Because the rise in markets benefits mostly those who are already wealthy. Therefore, the increasing participation of retail investors in the market contains both opportunities and risks. Investors being conscious and more active in exercising their voting rights can play an important role in managing these risks.