ESG continued to be the main thematic for indices in the first half of 2023 while biodiversity and artificial intelligence are expected to make inroads in H2.

Some 819 structured products worth an estimated €8m (US$8.7m) were linked to a single equity index in France during the first half of 2023 – representing almost 50% of total sales for the period.

At €3.3 billion, 42% of all index-linked volumes was attached to structured products tied to a broad index, including benchmarks and broad decrement indices. In the former category, the Eurostoxx 50 was above the competition, claiming more than 90% of all benchmark related sales, while the Euro iStoxx Equal Weight Constant 50 and Euro iStoxx 70 Equal Weight Decrement 5% were among the bestselling broad decrement indices.

Sales of products linked to ESG indices totalled €2.1 billion – the equivalent of a 25.6% share of the index-linked market. Their exposure was split between broad ESG indices (9.6%), ESG climate (5.6%), ESG social (4.6%), ESG Paris-Aligned (4%), and ESG biodiversity (1.8%).

Despite a market share of just 1.8% in H1 2023, ESG biodiversity indices are expected to be much more prominent in the second half of the year, according to delegates at the SRP France conference which was held in Paris on 29 June. In a poll held at the event, 48% of respondents said they see biodiversity as the main ESG thematic for H2 2023, ahead of Paris-Aligned (27%), the circular economy (18%) and social (7%).

Artificial intelligence (AI) was also seen as an important thematic for indices, with 69% of voters at SRP’s Paris event claiming AI would be their number one non-ESG theme for H2 2023, followed by inflation (28%), and, at some distance, metaverse (3%) and luxury goods (2%).

Sectorial thematic indices captured 15% of the market in H1 and were dominated by banks, especially the Eurostoxx Banks, which was seen in 110 products worth an estimated €1.2billion during the period, while single stock indices held a six percent market share.

The remaining 12% was linked to other thematics, including auto manufacturers, luxury goods, technology, telecom, and basic materials, among others.

The SRP Index Report 2023: Thematic/Decrement indices is available for download here.