I was the odd man out.
I joined over a hundred investor-relations colleagues in Dallas last week for the NIRI Southwest Regional Conference (great work, chapter team led by Brook Wooton!).
I was the only person talking about the trend in our addressable market.
More on that in a moment.
The hard part was the travel. I flew from Steamboat Springs and we were way late leaving the high country. Arriving in Denver, we pulled into Terminal A, with my connecting flight to Dallas at the far end of Terminal B, naturally, and about to board.
I hoofed it like a soldier in basic training and made it. My United app said it would take 21 minutes. I made it in half that time.
The trouble isn’t getting onboard. It’s getting your bag on the plane if you’re not in the first two boarding groups.
But at least the plane wasn’t on fire like in Basel three years ago. We saw the fire brigade racing down the runway and we observed aloud, “I wonder what’s on fire?”
Then they roared up to us. Turns out alarms were going off saying our plane was on fire. We had to swap planes.
That didn’t happen this trip but on the way back I was waiting in Denver to connect to Steamboat. I boarded the plane. Then I was upgraded to first class. It’s such a short flight that it’s pointless paying to fly up front. But hey. I’ll take it.
And then our pilot timed out. Ran out of hours to fly planes as permitted by law. So they kicked us all off the plane and went to find a pilot. Then we lost the plane too. I had to stay overnight in Denver (fortunately we have a house there so I went home).
Back to being the odd man out, I had a 15-minute presentation for a panel on the Elephant In the Room: What to Do About Passives (happy to share it — just ask me).
In case you’ve been stuck in airports for fifteen years and missed it, Passives control most of the money. One category, Passive Large Cap Blend, is about 70% of equity assets. One hundred thirty stocks with $100 billion of market cap or more are more than $50 trillion of market cap, 76% of the entire US market.
What does that money buy? Well, I just told you. Large cap value and growth (blend) stocks. What if you’re not a large cap? Passives still dominate but every small cap should have a plan to become a large cap. Because that’s where the money is – 95% of market cap (small caps are about 5%).
Outside of a half-dozen AI sessions (we beat that digital horse to death), much of the conference was on telling the corporate story. No amount of doing that will create shareholder value if the money that buys stories is a seller.
What’s our addressable market, IR folks?
Suppose I want to sell Lamborghinis. The addressable market is about 10,000 cars. In 2025 thus far, more than half the sales are in Europe, the Mideast, Africa. In North America, the biggest markets are southern California, Florida, and the tri-state area (NY, NJ, CT). Okay, now I’ve got a plan.
Shouldn’t it be a core investor-relations discipline to know the addressable market of equity assets?
Generally, more than $60 billion per month flows to equity funds, says Morningstar. But lately money is cutting exposure to US equities, increasing it in international stocks.
Derivative-income funds are hot – like covered-call funds that sell options on portfolios. Those funds have grown from about $40 billion to $160 billion in three years.
Sustainable funds are the opposite, posting 25 consecutive months of outflows including about $1.6 billion pulled in July 2025.
Active ETFs now outnumber Passive ones. But they’re not stock-pickers. They don’t have a benchmark. It’s a way to eliminate licensing intellectual property from an index provider and remove comparative performance. Pretty smart.
But all they’re doing is constructing a daily basket. Heck, we construct model portfolios for subscribers that if used to support ETFs (an objective of ours) would be classed as Active. But they’re entirely quantitative.
Blackrock has gathered $65 billion of assets the past quarter for its ETFs, says Vettafi. The firm tracks who’s got inflows and outflows.
The folks at Tidal Financial Group told me 90% of ETF assets – no matter the nuances in prospectuses – are large caps. Well, there are only 500 stocks with $20 billion or more of market cap.
I would conclude that every management team, every Board of directors, needs a strategy to be a large cap. Otherwise, be a private company.
And I would have a plan to appeal to the money using ETF baskets. You can’t talk your way in. You have to possess the characteristics ETFs buy. It’s not that hard to figure out. But our profession isn’t doing it yet.
We’re the odd ones, out helping a bunch of companies implement Passive strategies to attract and keep Passive money. It’s where the money is. It may not be odd for long.
