A 43% increase in the number of indices measuring environmental, social and governance (ESG) criteria in the past year, a new record for the survey.
Indices covering fixed income markets grew approximately 8% in the past year and nearly 15% in the last two years.
Fixed income ESG indices increased by 61%, a new record for any category ; High yield and Composites also showed significant growth within the fixed income category.
NEW YORK–(BUSINESS WIRE)–The Index Industry Association (IIA), the industry trade group for the global independent index provider community, is pleased to share the results of its fifth annual global benchmark survey. This year’s survey results show an industry that is growing and diversifying its products and services to meet expanding and changing investor needs. Main contributors to this growth and diversification include indices that measure environmental, social, and governance (ESG) criteria—which increased by 43.2%—and fixed income indices, which increased by 7.7%.
Rick Redding, IIA’s CEO, commented: “The index industry continues to broaden and innovate its offerings in this highly competitive environment to address investor demand. For the second consecutive year, we have seen record-breaking growth in the number of ESG indices, with fixed income continuing to be the asset class benefitting the most from that growth. Indices are an indispensable piece of the global investing landscape and are a reliable and transparent measure of what the markets are telling investors.”
Another Year of Index Industry Growth Amid Global Uncertainty
While 2021 has seen continued global volatility and uncertainty amidst the Covid-19 pandemic, the overall number of indices climbed by approximately 5%, a slight increase from the 3% growth recorded in the 2020 benchmark survey. IIA members continued to diversify and innovate in accordance with investor demand and have continued to bring indexing to asset classes beyond equities.
The number of ESG indices globally rose by 43.2% in the past year—following a 40.2% rise from 2019 to 2020— continuing its significant growth to meet rising investor demand.
The growth in ESG-related indexes confirms the findings of the IIA’s ESG survey earlier this year, which found that 85% of asset managers consider ESG a high priority for their companies and anticipate the proportion of ESG assets in their portfolios to rise from an expected 26.7% in twelve months’ time to 43.6% in five years’ time.
Fixed income growth over the past two years has been impressive. The number of indices measuring global bond markets has risen nearly 15%. And within fixed income there has been a record-breaking 61% growth in ESG as product issuers look to build more diversified and ESG-compliant products. Within fixed income, High Yield grew by 12.32 %, and Composites grew by 9.18%.
On the equity side, independent index providers continue to push into more thematic investments. The number of thematic indices grew by 27.25%, while still making up a relatively small percentage of equity indexes. Equities continued to be the largest asset class, comprising 76% of indices, compared with 23% focused on fixed income.
“The growth in fixed income indices has been driven primarily by the tremendous growth in ESG along with diversification into high yield and composites. Fixed income growth shows no signs of slowing and mirrors the larger index industry in its capacity for ESG growth and diversification,” Redding said.
About the IIA Annual Benchmark Survey
This survey among IIA members seeks information only about the number of indices in each of the identified asset classes. It covers historical information submitted to the IIA separately and independently by its members. The IIA does not share the information among its members or others except in the aggregate form made available to the public. The survey does not seek or provide information about the amount of assets under management benchmarked to these indices.
About Index Industry Association (IIA)
IIA is an independent, not-for-profit organization based in New York. Founded in March 2012 to provide a voice for the global index industry, and will celebrate its 10th anniversary in 2022. The IIA works with market participants, regulators, and other representative bodies to promote competition and sound practices in the index industry in an effort to strengthen financial markets and help them better serve the needs of investors. Our members have been calculating indices since 1896, and today administer more than 3 million indices. These indices cover a wide variety of asset classes, including equities, fixed income, commodities, and foreign exchange.
Many of the leading index providers in the world are members of the IIA, including Bloomberg Indices, Cboe Global Markets, Chicago Booth Center for Research in Security Prices (CRSP), China Central Depository and Clearing, FTSE Russell, Hang Seng Indexes, Intercontinental Exchange (ICE) Data Services, IHS Markit, Morningstar Indexes, MSCI Inc., Nasdaq Global Indexes, Qontigo (DAX and STOXX indices), Shenzhen Securities Information Co., Ltd., S&P/Dow Jones Indices, and the Tokyo Stock Exchange. Visit the IIA website for more information at www.indexindustry.org.
For further information:
- Josh Passman, Lansons Intermarket: (914) 391-1199; email@example.com