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

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] ​