The IIA’s third annual survey found the total indices fell by 20% to 2.96 million globally. In 2017, there were 3.29 million indices recorded and 3.73 million in 2018.
Waqas Samad (pictured), CEO of FTSE Russell and chairman of the IIA, explained the reason for the drop was due to index providers always looking to keep their range streamlined and efficient.
Rick Redding, CEO of the IIA, added: “Every firm continuously evaluates their indexes to see if they are redundant, which helps keep costs down for their clients.”
The majority of scrapped indices came from the equities and “other” sector while the number of fixed income indices increased by 7.2% over the past year.
Meanwhile, there was also a rise in environmental, social and governance (ESG) indices in the market driven by increasing investor demand. Across both equities and fixed income, the number of ESG indices rose 13.9% over the past year.
“With three years of data to analyse, we can see interesting trends developing in fixed income and ESG,” Redding continued. “Index providers are continuing to expand their fixed income offerings to give investors more accurate benchmarks.
“Moreover, the number and variety of ESG indexes indicate that investors are looking for benchmarks that conform to their investment objectives and beliefs.”
Samad added: “ESG and climate indices is a real focus for us as investors are asking for more of these types of solutions.”