Transparency in Benchmark Costs

Transparency in Benchmark Costs

October 2015


Market indexes are frequently used by institutional investors as an important aspect of the investment allocation and performance evaluation process. These indexes are not free.

Index vendors incur costs in creating, maintaining and distributing indexes, and investors and custodians who include even top level index data in reports are subject to licensing requirements and often fees. The costs of index data have been increasing dramatically over the past several years, but these costs have been invisible to many institutional investors.

Responding to this issue, Frances Barney, Head of Global Risk Solutions Consulting – Americas, and David Spaulding, CEO and Founder, The Spaulding Group, discuss the launch of “Custodian Guidelines for Transparency in Benchmark Cost,” an initiative with The Spaulding Group, BNY Mellon, and other large custodians that seeks to improve transparency on embedded fees for benchmark data, and enable investors to make informed decisions by understanding the details behind the fees they are paying.

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