Practical Applications of The Perceived Advantages of Self-Indexing for Institutional Equity Investors

In The Perceived Advantages of Self-Indexing for Institutional Equity Investors, from the Fall 2023 issue of The Journal of Beta Investment Strategies, Benjamin Herzog, Jenna Jones, and Shahyar Safaee of EDHEC Business School argue that self-indexing has significant potential to help institutional equity owners incorporate customization preferences, such as ESG considerations, while fulfilling their fiduciary duty. The authors present a history of passive equity investing and the role of index providers to highlight the issues and opportunities in self-indexing compared to market-capitalization-weighted indexes. The authors report key findings of EDHEC's 2023 self-indexing survey of institutional asset owners. The results from the EDHEC survey point to rising expectations for customization among institutional asset owners.