Managers and investors face challenges from an 'absurd' proliferation of indices

Over a million indices globally

Concerns have been raised by analysts at AB Bernstein about the huge number of indices in the market, as they point to the lack of barriers to index creation and the "total hold" benchmarking has on the asset management industry.

In a report entitled A Million Indices, the Death of Benchmarking and the Passive Singularity, seen by Investment Week, the analysts calculated there were over a million indices when taking into account all the possible approaches such as ESG overlays, currencies, and dividend treatment, despite the total number of investible liquid stocks being close to just 3,000. "The number of indices in the world far exceeds the number of stocks," said Inigo Fraser-Jenkins, head of global quantitative strategy and European equity strategy at Bernstein Research. "This state is the absurd culmination ...