FTSE Russell

Evolving investment landscape offers index providers opportunity to shine

The markets are undergoing a period of profound change.

Continued economic globalisation, rising geopolitical tensions, tightening central bank policies and new technologies are combining with changing market structures and regulatory shifts to create a very dynamic landscape. As a result, buy- and sell-side participants alike are facing multiple challenges such as fee compression, a persistent shift toward passive investment and evolving business models for financial firms. And, ten years on from the financial crisis, all of us in financial services must continue our efforts to rebuild the trust in our industry.

These forces are changing the way our money is managed. Investment flows are predominantly into low cost passive funds: a recent report from professional services firm PWC predicts that global passive assets will almost double in size by 2025, from US$84.9 trillion in 2016 to US$111.2 trillion by 2020, and then again to US$145.4 trillion by 20251. Active managers, some of whom have been accused of being closet index trackers, are having to take on more active risk to justify their higher fees and deliver performance that beats the benchmark in a meaningful way.

Read the complete white paper at the link beneath Related Files

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What’s new

  • Appraising home bias exposure

    Appraising home bias exposure

    White papersTue, 22 Oct 2019

    Studies have shown that pension funds have inherent biases to their domestic markets within their equity allocations. In this paper, FTSE Russell seeks to understand the impact of home bias in the equity allocations of five large pension fund markets—the US, UK, Japan, Canada, and Australia—by examining the extent of their home biases and analyzing their effects over a 12-year period.

  • Why climate change also matters for government bond investing

    Why climate change also matters for government bond investing

    White papersMon, 21 Oct 2019

    Henry Odogwu, Head of the asset owner group Europe at FTSE Russell discusses how European asset owners are looking to extend environmental, governance and social (ESG) considerations beyond equity into fixed income

  • Benchmarking the Value of Indexes Among Active Managers

    Blog | Benchmarking the Value of Indexes Among Active Managers

    White papersMon, 21 Oct 2019

    Active managers primarily use index data to benchmark investment performance, but a new study by Greenwich Associates suggests there are significant opportunities for active managers to derive more value from data and partnerships with index providers.

  • A defining moment for US small-cap stocks

    Blog | A defining moment for US small-cap stocks

    White papersFri, 18 Oct 2019

    According to global index provider FTSE Russell, the US small-cap Russell 2000 Index has returned 6.6% annually over the past 20 years on a price basis as of September 30 as compared to a 4.6% annual price return for the US large-cap Russell 1000 Index for the same period. 

  • Is economic pessimism nearing a nadir?

    Blog | Is economic pessimism nearing a nadir?

    White papersFri, 18 Oct 2019

    The rapid deterioration in leading indicators this year has cast a pall over equity markets and kept their performance relative to bonds in check. However, with financial conditions easing globally, are markets now underestimating the potential for the economic data to improve?

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