Custom indexing is becoming a significant part of the index business. The strategic question for providers is how to serve growing demand for customization without letting operational complexity and servicing costs grow at the same pace.

The index industry is undergoing a quiet but fundamental shift. Customization, speed and client involvement are turning index providers from content suppliers into platform operators.

In our previous articles, we argued that a backtest is not an index and that an index design studio must allow researchers to understand, inspect and document every important methodological choice. There is, however, another point that is often underestimated: in systematic investing, data is not simply an input, but a central part of the methodology.

A historical performance curve is useful, but an index-grade methodology must be explicit, inspectable, documentable and capable of being operated through time. This raises a practical question: what should an index design studio actually provide to researchers and product developers?

In our previous articles, we described self-service indexing as a new infrastructure for designing, analyzing and operating systematic investment strategies. But this raises an important distinction: a platform that makes it easy to generate backtests is not necessarily an index-technology platform.

A consequence of the rise of self-service indexing may prove additionally important: asset managers and asset owners will increasingly operate their own internal systematic benchmark universes rather than relying solely on a limited set of published benchmarks.