Global index provider MSCI Barra will be launching some 20,000 new
indices over the next few months reports

Although some may wonder why MSCI Barra needs another 20,000 indices to add to the 80,000 they already have, the COO of the firm feels it is very much justified.

“Financial instruments are constantly being created to lower the total
cost structure of investments,” said COO David Brierwood, “and this therefore has
allowed pension funds (and others) to invest in a wider spread of assets.”

Cost is one thing, but performance is another. Most mutual funds have dramatically dragged behind their benchmarks during the past decade and investors are voting with their feet. In addition, the proliferation of ETFs have enabled advisors, institutions and individual investors to have more freedom to allocate portfolios in a diversified and less expensive manner.

So, as the number of indices grow, new ETFs will follow.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.