This year the Index Industry Association (IIA) conducted our fifth annual global benchmark survey, states Rick Redding, of Index Industry Association.
We survey our member organizations in order to better gauge the activity of the index industry, which involves compiling the total number of indices each member organization has in each asset class and geography.
The results this year are indicative of an industry that is innovating and diversifying. They are also indicative of index providers that are adapting their products and services to meet investor needs. Our survey this year has shown that one of the biggest contributors to this growth and diversification is indices that measure ESG criteria. The total number of these ESG indices increased by 43% from 2020. This is the greatest year-to-year increase we have seen in a single category since we started conducting our benchmark survey. As the number of ESG indices continues to surge, we see a corresponding growing need by asset managers for ESG asset classes beyond equity.
This year’s survey results also demonstrate a continued rise in fixed income. The number of indices covering fixed income grew 8% in the past year. Over the past two years, fixed income markets have grown 15%. Within this growth, we saw ESG fixed-income indices, specifically, increase by 61%, a record in fixed income index growth. Which is a really significant increase – it’s a record in fixed income index growth. High yield and composite indices also showed significant growth within fixed income, although to a lesser extent than ESG indices. In analyzing the geography of our results, the Americas saw the largest increase in fixed income in 2021.
Our equities section’s results this year show us that the number of equity indices have, generally, stabilized – although they did still undergo an increase of 3%, regardless of global volatility due to the pandemic.
If we look at the big picture of our fifth annual benchmark survey’s results, we see IIA members successfully responding to investor demand by continuing to diversify indices. As the industry continues to evolve, we see increasing innovation and competition.