Indexing hit its golden period

The week that saw ETF Express’s Fiona Nicolson talking to MerQube’s Vinit Srivastava about the growth in their indexing business, also brought us the findings of Burton Taylor International Consulting, part of TP ICAP’s Parameta Solutions division’s benchmark study which revealed that global index revenues increased 9.3 per cent in 2023, totalling a record USD5.8 billion.

MSCI, S&P Dow Jones Indices, and LSEG FTSE Russell account for more than 70 per cent of total index revenue, according to the study, while it reported assets under management in ETFs rose by 26 per cent to USD11.4 trillion.

Investments continue to flow into Fixed Income, ESG and thematic funds, but traditional equity indices still capture two of every three dollars earned by providers, the firm says. The study can be found here.

Meanwhile, MerQube’s co-founder, Vinit Srivastava, notes three key developments in indexing from his firm’s perspective. "Firstly, indexing has grown, and its use cases have expanded. Secondly, options and derivatives have become a huge part of the ecosystem of financial products, and customisation has become of significant interest to investors, whether retail or institutional. The third development is the growth of data and the different types of data that have been used to build investment strategies."

This week we also published Nasdaq’s winning piece from last year’s ETF Express US awards with an interview with Emily Spurling, SVP and Global Head of Index, on the firm’s wins as Best Index Provider – ESG ETFs and Best Index Provider – Emerging Markets ETFs.

April’s flows figures for ETFs are out across the board and report that globally ETF inflow in April was a quieter month, with investors proving cautious with concerns about interest rates. However, Invesco’s Paul Syms, head of Head of EMEA ETF Fixed Income and Commodity Product Management , notes that "Inflows into fixed income ETFs picked up in April, with NNA of USD5.7 billion taking net inflows for the year to USD17.9 billion." Syms says that safe-haven" asset classes were the main beneficiaries over the month with EUR Govts (USD2.4 billion), Cash Management (USD1.3 billion) and US Treasuries (USD1.1 billion) the leading categories for inflows.

We have our new podcast, in partnership with Truss Edge, up on the site, with Yorick Naeff of Bux Group and Nicholas Codolo of Brinker Capital Investments discussing the differing issues within distribution of ETFs from the US and Europe. Listen to their findings here.

Beverly Chandler, Managing Editor

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