iStockphoto Appearances can be deceiving.The number of passive investors who trade stocks via exchange-traded funds has surged in recent years in what some see as a sign of a dysfunctional market in the making. Strategists at Bank of America Merrill Lynch, led by Savita Subramanian, earlier this week warned in a report that the surge of ETFs is distorting the stock market and making it less efficient in the process. Bank of America Merrill Lynch ETFs currently account for nearly a quarter of U.S. stock-market trading volume versus 76% for individual stocks. Three years ago, ETFs accounted for 20%. Meanwhile, the percentage of equity-fund assets has jumped in the wake of the U.S. financial crisis, rising to 37% in 2017 from 19% in 2009, according to Bank of America. via