Stock Market Indices; do they make money?

[Papoo]

Following on from a previous question as to what various stock market indices are, and how they work, I have another question...

Inevitably, they have been set up by individuals/companies/institutions, but, do they actually make money themselves? Ie. The S&P 500 was set up in 1957, let's say, by Mr Standard, and Mr Poors.

Did these to fine chaps make cash from it? Did they sell the rights to trade the S&P 500 on Wall St or did they do it altruistically, for the greater good of mankind?

[Neil_H]

Yes, the companies that created and maintain the indices are just that - companies, and make profits from running the indices (there are thousands) and supplying data services related to them.

[jagman21]

s&p are a rating agency who, have produced a wieghted average of all the big companies (500) to give a general over view of how the stock market is performing (in NY).

dow jones is also an index by a media company, however despite its popularity, is not as accurate (IMO) as the s&p as it is price wieghted as opposed to market capitalisation wieghted.

In fact u could make a index if u like, but the chances is that no one will take any notice as there are already established ones that people trust and use.

For example the BBC global30, is one recently made by the bbc, used to give a global equities outlook.

[2something]

There are loads of indices out there. In the last couple of years commodity ones have been the flavour of the day, the banks set them up to provide reliable benchmarks, prove that they are a player in that particular field and they often also setup instruments linked to the indices for clients to trade.