Hundreds of exchange traded funds are now offered for free on multiple brokerage platforms, eroding an important source of revenue for these firms.
Goals and Objectives
By creating proprietary indices, investment management firms become less dependable on external index providers, reducing costs related to licensing fees and improving client retention.
Real-time data and analytics to determine indices based on stock performance and fund attributes, Modeling and algorithms
Use Case Summary
Self-indexing enables fund managers to curate improved indices, create new revenue sources (through licensing fees), and reduce expense ratios.