Revenues collected by index providers globally reached a record $5 billion in 2021, representing an increase of 23.1% from the previous year, according to data collected by Burton-Taylor International Consulting.

Revenues collected from ESG indices increased 123% in 2021.

Burton-Taylor’s research offers a comprehensive analysis of the index industry with detailed reviews of all leading providers including FTSE Russell, S&P Dow Jones Indices, MSCI, Nasdaq, STOXX, Bloomberg, Alerian, Intercontinental Exchange, Solactive, Morningstar, CRSP, and SIX.

According to the report, income increased across all major indexing segments in 2021 with asset-based fees representing 51% of total revenue and subscription-based fees comprising 39%. Revenues from non-recurring transactions and licensing for derivatives, OTC contracts, and structured products made up the remainder.

The three largest index providers accounted for approximately two-thirds of the industry’s total revenue – MSCI, FTSE Russell, and S&P Dow Jones Indices brought in $1.3bn, $1.1bn, and $1.1bn, respectively.

However, seven different index providers each reported year-over-year growth in excess of 15%, illustrating how strong demand supported the entire industry.

While traditional equity indices captured two-thirds of the total income, revenues from ESG and smart beta indices are increasing at a much faster rate than the industry average. Revenues from socially responsible indices grew 123% in 2021, while revenues from factor-based indices increased by 32%.

Commenting on the results, Robert Iati, Managing Director at Burton-Taylor, said: “Market volatility combined with unprecedented demand for ESG had a positive impact on index industry revenues in 2021. Index providers continued to see strong growth in 2021, as they expand their offerings to facilitate market demand, with extension in thematic, factor, and ESG indices leading the way.”