Passive Investing and ETF Benchmark Transitions Drive Strong Growth in ICE’s Index Business

Rhea-AI Summary

Intercontinental Exchange (NYSE: ICE) reported robust growth in its index business in the first half of 2021, bolstered by a significant rise in assets under management (AUM) in ETFs utilizing ICE indices. Notably, over $60 billion in AUM transitioned to ICE benchmarks, fueled by a $186 billion increase in U.S. fixed income ETFs in 2020. The AUM for U.S. thematic ETFs also grew to $133 billion. ICE has launched over 250 new indices, including ESG-focused offerings, contributing to its double-digit revenue growth since acquiring the ICE BofA suite of indices in 2017.

Positive

• ETF licenses for ICE indices have grown AUM to over $300 billion from less than $100 billion since 2017.
• AUM in ETFs benchmarked to ICE indices increased by $35 billion in the first half of 2021.
• ICE launched over 250 new indices, expanding its offerings in fixed income, equity, and commodities.

Negative

• None.

Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today announced 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 - equivalent to over $60 billion in AUM - switching their underlying benchmarks to ICE indices.

In 2020, assets under management in U.S. fixed income ETFs jumped by $186 billion to $969 billion in AUM, outpacing U.S. 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 U.S. thematic ETFs totaled $133 billion, compared to $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, LLC has seen double-digit annual revenue growth since the acquisition of the ICE BofA suite of indices in 2017. A key driver of that growth has come from ETF licenses as AUM benchmarked to ICE’s indices has grown to over $300 billion from less than $100 billion at the end of 2017. Notably, the first half of 2021 saw AUM in ETFs benchmarked to ICE indices increase by $35 billion, including $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.

“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.

For more information on ICE Data Indices, LLC please visit www.theice.com/market-data/indices.

About Intercontinental Exchange

Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500 company that designs, builds and operates digital networks to connect people to opportunity. We provide financial technology and data services across major asset classes that offer our customers access to mission-critical workflow tools that increase transparency and operational efficiencies. We operate exchanges, including the New York Stock Exchange, and clearing houses that help people invest, raise capital and manage risk across multiple asset classes. Our comprehensive fixed income data services and execution capabilities provide information, analytics and platforms that help our customers capitalize on opportunities and operate more efficiently. At ICE Mortgage Technology, we are transforming and digitizing the U.S. residential mortgage process, from consumer engagement through loan registration. Together, we transform, streamline and automate industries to connect our customers to opportunity.

Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange. Information regarding additional trademarks and intellectual property rights of Intercontinental Exchange, Inc. and/or its affiliates is located here. Key Information Documents for certain products covered by the EU Packaged Retail and Insurance-based Investment Products Regulation can be accessed on the relevant exchange website under the heading “Key Information Documents (KIDS).”

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 -- Statements in this press release regarding ICE's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in ICE's Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on February 4, 2021.

SOURCE: Intercontinental Exchange

ICE-CORP

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FAQ

What was the AUM growth for ICE indices in the first half of 2021?

In the first half of 2021, assets under management (AUM) in ETFs benchmarked to ICE indices increased by $35 billion.

How much did U.S. fixed income ETFs grow in 2020 according to ICE?

According to ICE, U.S. fixed income ETFs grew by $186 billion in 2020, reaching a total of $969 billion in AUM.

What trends are driving the growth of ICE's index business?

The growth of ICE's index business is driven by the increasing adoption of passive investing and the transition of existing ETFs to ICE indices.

How many new indices has ICE launched recently?

ICE has launched over 250 new indices, focusing on fixed income, equity, and ESG-themed products.