The Index Industry Association (IIA) today celebrates World Statistics Day with the publication of an educational primer, “Measuring Markets: The Origins and Benefits of Indexes.” The IIA is a global education and advocacy organization representing 17 index providers worldwide.

“We’re proud to celebrate World Statistics Day – a theme central to the IIA’s mission, as we raise awareness of the valuable role of indexes as statistical constructs and their wide-ranging use cases,” said Kirsten Wegner, CEO of the IIA.

World Statistics Day, established by the United Nations, highlights the vital role of statistics in social and economic life across governments, markets, and society. “Financial indexes are, at their core, statistical constructs – a way to measure markets. For more than 150 years, they have served as public resources, designed to support decision-making and track the performance of defined groups or sectors of assets,” said Wegner.

The research is co-authored by IIA CEO Kirsten Wegner and Adjunct Professor John Jacobs of Georgetown University’s McDonough School of Business, and explores the evolution, functions, and future of financial indexes as tools not only for benchmarking, but for investment decision-making, and as statistical measurements in an era of rapid technological change.

“Indexes are often the invisible scaffolding of the financial system. They are independent, rules-based tools that underpin transparency and endless investor choice,” said Wegner. “This primer is intended to demystify misconceptions around indexing and reinforce how these vital tools support resilient, efficient, and accessible capital markets.”

Notable highlights include:

• The Role of Indexes – Indexes are a statistical measurement from independent firms, designed to track the performance of predefined groups or sectors of assets like stocks, bonds, fixed income and commodities. This data is commonly used by investment management firms to create investment vehicles like ETFs and mutual funds as well as for benchmarking, research and as economic indicators.
• Benefits of Indexes – Indexes offer a range of valuable benefits, including: 1) enhanced transparency and independence in measuring units of assets; 2) endless choice and innovation for diversification of strategies; and 3) significant cost efficiencies for institutional and individual investors for investment vehicles tied to an index.
• The Value of Data – Using advanced models and data science, indexes capture the complexities of new asset classes and industries, offering investors and the financial ecosystem data in an increasingly intricate financial landscape. Data quality is a core responsibility for index providers as the demand for comprehensive and accurate data continues to grow as index adoption grows.
• Emerging Key Trends – The report identifies six key trends shaping the index industry globally, including: the use of artificial intelligence for index construction, management and customization; the growing use of derivatives to hedge risk and manage volatility; and the growing demand for tailored, thematic indexes such as emerging markets indexes.

“As we describe in the report, indexing has played an important role on the development of markets, investing and the flow of capital into different industries,” said John Jacobs, Adjunct Professor and Distinguished Policy Fellow at Georgetown University's McDonough School of Business. “As we enter a new era with the rapid expansion of AI, the index industry is poised to empower investors with the next generation of sophisticated tools.”

From their origins as basic market benchmarks, indexes have evolved to occupy an important place in the global financial ecosystem, supporting a wide range of investment strategies. As the IIA’s primer underscores, indexes continue to play a critical role in helping market participants navigate a rapidly changing global financial environment.

This content is part of the IIA’s ongoing mission to educate and engage the broader public about the vital function of indexes across today’s global financial landscape. To better understand how indexing is shaping the future of investing and to download the full report, “Measuring Markets: The Origins and Benefits of Indexes,” visit the IIA’s website.

About the IIA

Many of the leading independent index providers in the world are members of the IIA, including Bloomberg Indices, Cboe Global Indices, the Chicago Booth Center for Research in Security Prices (CRSP), China Bond Pricing Co. Ltd., China Securities Index Co. Ltd., FTSE Russell, Hang Seng Indexes, ISS-STOXX, JPX Market Innovation and Research (Tokyo Stock Exchange), Korea Exchange, Morningstar, MSCI Inc., NASDAQ OMX, Parameta Solutions, Shenzhen Securities Information Co. Ltd., and S&P Dow Jones Indices LLC.

IIA members administer over three million indices for their clients, covering many asset classes, including equities, fixed income, and commodities. Part of the IIA’s mission is to consider ways to promote best practices for index providers, which makes it a natural supporter of appropriate and proportionate industry standards. Our members are dedicated to promoting transparency, competition, sound operational practices, intellectual property rights, education, and effective index management practices. IIA members are independent index administrators who neither trade the underlying component securities of their indices nor directly create products for investors. Moreover, our members publicly make available their methodologies and explain how their indices are created, calculated, or maintained.

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