Passive proliferation slows, with 770,000 indexes scrapped in 2019

Passive proliferation slows, with 770,000 indexes scrapped in 2019
But the number of fixed-income indexes expanded, as did ESG indexes.
OCT 16, 2019
By  Bloomberg
The seemingly inexorable march of passive investing looks to have hit a roadblock. The number of indexes around the world fell more than 20%, to 2.96 million, in 2019 as benchmark providers scrapped some of their gauges, according to a new report from the Index Industry Association. For the first time since the organization started conducting its now annual survey two years ago, the decommissioning of redundant measures outweighed the creation of new benchmarks. [More: Passive investing hasn't taken over the world]​ "Every firm continuously evaluates their indexes to see if they are redundant, which helps keep costs down for their clients," Rick Redding, the IIA's chief executive, said in a press statement. "Ultimately, our members are focused on providing the quality of indexes investors demand that they administer and not necessarily the quantity." [More: Active managers putting pressure on index funds]​ However, it wasn't all bad news for benchmark providers. The number of fixed-income indexes grew 7.2% from a year earlier, largely thanks to expansion in Europe, the Middle East and Africa. The region now has almost as many debt gauges as the Americas. Indexes that reflect environmental, social and governance metrics also proliferated, with the number of ESG measures expanding almost 14% from a year earlier. [Recommended video: How advisers can be a gamechanger for women investors]

Latest News

NASAA moves to let state RIAs use client testimonials, aligning with SEC rule
NASAA moves to let state RIAs use client testimonials, aligning with SEC rule

A new proposal could end the ban on promoting client reviews in states like California and Connecticut, giving state-registered advisors a level playing field with their SEC-registered peers.

Could 401(k) plan participants gain from guided personalization?
Could 401(k) plan participants gain from guided personalization?

Morningstar research data show improved retirement trajectories for self-directors and allocators placed in managed accounts.

UBS sees a net loss of 111 financial advisors in the Americas during the second quarter
UBS sees a net loss of 111 financial advisors in the Americas during the second quarter

Some in the industry say that more UBS financial advisors this year will be heading for the exits.

JPMorgan reopens fight with fintechs, crypto over fees for customer data
JPMorgan reopens fight with fintechs, crypto over fees for customer data

The Wall Street giant has blasted data middlemen as digital freeloaders, but tech firms and consumer advocates are pushing back.

The average retiree is facing $173K in health care costs, Fidelity says
The average retiree is facing $173K in health care costs, Fidelity says

Research reveals a 4% year-on-year increase in expenses that one in five Americans, including one-quarter of Gen Xers, say they have not planned for.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.