Industry Updates

Solactive sees fastest growth across index providers in 2019

Tom Eckett

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Solactive saw the fastest growth across all index providers in 2019, according to a report by Burton-Taylor International Consulting.

The German index providers posted revenue growth of 21.9% last year, outpacing its rivals.

Timo Pfeiffer, chief markets officer at Solactive, said the growth was driven by increasing demand for the firm's environmental, social and governance (ESG) offerings and its global benchmark series.

Pfeiffer (pictured) commented: "We have enjoyed continued, strong growth over the past years including 2019. Even in a tricky and difficult new year 2020, we managed to keep that positive momentum but, for obvious reasons, at a slightly lower pace though."

Overall, global index industry revenues increased 8% in 2019 taking them to a record $3.7bn.

This was mainly driven by index licence fees based on assets under management (AUM) which increased 9% to a record $1.9bn.

Meanwhile, subscription fee revenue grew 8.3% to $1.4bn last year while other index revenue such as licensing for derivatives and OTC contracts grew 3.3% to $457.5m.

In terms of market share, MSCI is the number one index provider with 24.74% of industry revenues, closely followed by S&P Dow Jones which has a 24.66% market share. FTSE Russell rounded-off the top three with a 20.5% market share of revenues.

ESG indexing saw a big increase in revenues jumping 31.3% last year. This area has been of major focus for index providers as sustainable investing increasingly plays a crucial role within portfolios.

David Tabaka, analyst at Burton-Taylor, commented: “A convergence of rising asset valuations, trend towards passive investing strategies and record derivatives trading volumes all supported industry revenues.”

“Index providers continued to see strong growth in 2019, with ESG and factor indices an area that will support rising revenues in 2020 and beyond.”

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