The Proliferation of Indices

The chart below shows the growth in the number of indices over time.  Just over the past couple of years, this measure has exploded.  Why is this happening?  In the past few years, there has been a push toward passive investing versus active investing. Investors are being sold on this idea by companies who provide so called “passive” investment strategies like ETFs. These ETF providers are always looking for more products to sell and, as a result, work with indexing companies to create new indices on which to base their ETFs.  Now, there are over 5,000 indices – more than the number of stocks in the Russell 3000.  RELATED:  Passive Investing is Worse than Marxism.