.jpg)
- MSCI, S&P and FTSE Russell earn the most of all providers
- Growing demand for ESG-related investing fuels global revenue growth
London and New York, April 26, 2023 – Global index revenues increased 5.9% in 2022, totaling a record $5.33 billion, according to a benchmark study published by Burton-Taylor International Consulting, part of TP ICAP’s Parameta Solutions division. The new study provides a comprehensive analysis of the index industry with detailed reviews of leading index providers, including FTSE Russell, S&P Dow Jones Indices, MSCI, Nasdaq, STOXX, Bloomberg, Alerian, Intercontinental Exchange, Solactive, Morningstar, CRSP and SIX.
Index industry revenues increased across all revenue segments in 2022, with asset-based fees rising 12.8% annually over the last five years, representing 49% of total and subscription fee revenues. The remaining index revenues comprise non-recurring transaction revenue and revenue from index licensing for use with derivatives, OTC contracts, and structured products. Higher AUM in ETPs drove growth for most providers, specifically those generating the most revenues from asset-based fees.
Key findings in the study include:
- FTSE Russell, S&P Dow Jones Indices, and MSCI account for more than 2/3rds of total index revenue.
- Assets under management in ETFs declined slightly by 4.6% to $9.552 trillion.
- Investments continue to flow into ESG and similar thematic funds, but traditional equity indices still capture 2 of every 3 dollars earned by providers.
“Targeted indices, led largely by sustainable themes related to ESG, capitalize on investors’ desire for exposure to more specific slices of the market and will continue to have a positive impact on index industry revenues,” said Robert Iati, Managing Director at Burton-Taylor. “However, turbulent markets that characterize the current environment are likely to slow the growth of inflows to indexes as investors seek more specific, defined investments to beat, rather than track, the market,” he added.
