Stocks Are Falling. The Economy Is Weakening. So Why Doesn’t Mike Green See Passive Flows Turning?

Mike Green of Tier1 Alpha Asset Management joins Excess Returns hosts Matt Zeigler and Justin Carbonneau to argue that passive fund flows are reshaping stock prices, market concentration and portfolio construction. He connects retirement contributions, target-date funds and index construction to buying pressure in the largest companies, and discusses why low-float index inclusions can create demand for large IPOs. He also walks through the framework he is building at Tier1 to track thousands of funds, estimate their impact on individual securities and make small portfolio tilts.

1. Green argues that understanding which funds receive money, and how they allocate it, is increasingly essential to understanding the stocks those funds own.
2. He links retirement contributions, target-date allocations and index construction to buying pressure behind the market's largest companies, and says low-float index inclusions can create demand for giant IPOs.
3. He argues liquidity does not keep pace with market capitalization, and that fund flows may help explain value, size and momentum-factor behavior.
4. Tier1's approach tracks thousands of funds, estimates their impact on individual securities and makes small portfolio tilts, with planned strategies incorporating managed futures for diversification.