The Global Rise of Index-Based Ownership of Firms
Working Paper Author/Authors
Key Finding
Index ownership has surged globally, reaching 16.9% of market capitalization by 2023, with ownership concentrated in larger firms outside the U.S. and varying substantially across regions
Abstract
We develop a simple and replicable five-variable model that identifies index-based investors with 98% accuracy. Our analysis shows that index ownership grew from 3.0% of global market capitalization in 2004 to 16.9% by 2023, driven by growth in explicit indexing. By the end of 2023, index-based investors own 10 percent or more of 5,300 firms globally. In the U.S., mid-caps have more index ownership than large-caps. In Asia and Europe, index ownership increases with firm size, and only the largest firms experience significant index ownership. Differences in market capitalization and free float help explain regional variations in index ownership.
© Bo Becker, Ruediger Fahlenbrach, Ehsan Mahdikhani, 2026
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