ICE sees $35 billion in AUM switched to its indices during H1 2021

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Lynn Martin, president of fixed income and data services, ICE.

Market and infrastructure operator Intercontinental Exchange has reported strong growth in its index business in the first half of 2021. This was driven by continued growth in assets under management (AUM) in ETFs using ICE fixed income, thematic and ESG-focused indices, including an increasing number of established fixed income and equity ETFs switching their underlying benchmarks to ICE indices.

The first half of 2021 saw AUM in ETFs benchmarked to ICE indices increase by US$35 billion, including US$24 billion in assets at established ETFs that transitioned their underlying benchmark to ICE. An additional $36 billion in announced transitions are planned to take place in the second half of the year. Additionally, over the last year ICE has launched over 250 new indices across its fixed income, equity and commodity index families, many of which have been selected as benchmarks for ETFs in the U.S. and in markets around the world. The new indices include a growing offering of ESG and thematic indices.

In 2020, assets under management in US fixed income ETFs jumped by US$186 billion to US$969 billion in AUM, outpacing US equity ETF growth of $165.4 billion, according to ETF.com.

It was also the second consecutive year that fixed income inflows exceeded equity ETF inflows. Additionally, thematic ETF investing, which connects disruptive macro-level trends with underlying investments such as sustainable energy or the electric vehicle (EV) industry, has surged recently. At the end of the first quarter 2021, AUM for US thematic ETFs totalled US$133 billion, compared to US$104 billion at the end of the fourth quarter of 2020, according to Global X research.

“The accelerating adoption and growth of passive investing has been an important driver of organic growth for our index business,” said Lynn Martin, president of fixed income and data services at ICE. “But even more critical has been the efforts we’ve made to dramatically increase the breadth of our offering and the flexibility we’ve introduced into our approach to index construction and risk management. This has resulted in the launch of several new ETFs benchmarked to our indices, as well as transitions of many existing ETFs to ICE indices, and demonstrates the end-to-end value proposition we provide to our customers.”

ICE Data Indices has reported double-digit annual revenue growth since the acquisition of the ICE BofA suite of indices in 2017. It asserts that a key driver of that growth has come from ETF licenses as AUM benchmarked to ICE’s indices has grown to over US$300 billion from less than US$100 billion at the end of 2017.

Phil Galdi, Head of Indices,
ICE Data Services

“ESG and thematic investing is an exciting area of the index industry that allows investors to focus on some of the hottest trends and most innovative sectors,” added Phil Galdi, Vice President of Corporate Development at ICE Data Services, “Like core fixed income and equity ETFs, ESG and thematic funds present interesting investment opportunities, and are an area where we’ve been able to apply our index construction methodologies with the greatest result.”

ICE offers a suite of over 5,000 global equity, fixed income, commodity and foreign exchange indices, and supports all aspects of the benchmarking and performance measurement process. Dedicated to innovation and flexibility, ICE offers a wide range of benchmarks and customized solutions to address the changing needs of index stakeholders globally.

©Markets Media Europe, 2021
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