The Dominance of Indexing Companies: A Lucrative and Influential Business

Indexing has evolved into a lucrative and influential business dominated by a select few companies, such as MSCI, S&P Dow Jones Indices, and FTSE Russell. These companies collectively generated revenues of $6.5bn last year, with profit margins ranging from 60-70%. The industry now houses over 4 million indices, but a mere 1% contributes to over 99% of its revenues. While the top 1,000 indices account for $13.5tn of assets, the top 20 indices alone represent a substantial portion. Despite predictions of a widespread shift to cheaper options, the industry's leading companies continue to enjoy substantial profits. Furthermore, the industry is expanding into direct indexing and private markets. Overall, the dominance of these indexing companies is expected to endure, with substantial growth in data gathering and data building.