As 2026 gets underway, Tim Edwards, Managing Director and Global Head of Index Investment Strategy at S&P Dow Jones Indices, says one of the most important long-term market themes to watch is whether U.S. equity leadership broadens beyond the mega-cap giants that have dominated for the past decade. Early signs this year suggest a potential shift toward wider participation, with stronger relative performance from equal-weight benchmarks, mid-caps, and small-caps—an evolution that could reshape market dynamics if it continues. Speaking from the floor of the New York Stock Exchange, Edwards also highlighted the milestone 50-year anniversary of the first index fund created by Vanguard, pioneered by John C. Bogle, noting that indexing has transformed investing by dramatically lowering costs and expanding access, saving investors an estimated $52 billion annually compared to traditional active funds. Looking ahead, he says indexing is evolving beyond core benchmarks like the S&P 500, with innovation expanding into new frontiers including bonds, private markets, and digital assets, as firms explore ways to bring transparency, benchmarking, and scalable investment tools to sectors that have historically lacked them.
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We are joined by Tim Edwards, global head of index investment strategy and managing director of S&P Dow Jones indices.
Great to have you here.
Thank you so much for joining me.
My pleasure.
Thanks for having me.
Well, here we are as we kick off 2026, and this is the time of year that we're looking ahead.
So what would you say is the single biggest structural shift that you're forecasting, not just this year, but in the next decade?
It's, it's very early days, but I think one of the key, uh, questions that people have been asking themselves is when and if there will be a rotation in US equity market strength beyond that traditional.
Superhero set, call it, you know, Magnificent Seven or Top 10 or whichever, you know, categorization you want to take, for 10 years, we've had leadership from the very largest companies, uh, in the US.
It's very early days, but so far in 2026, we've seen what many people have been calling for, which is a rotation to, Uh, increased breadth, uh, so better performance from, for example, the S&P 5100 equal weight index, uh, or from small caps or from mid-caps, and I think that dynamic is someone, is one that's very top of mind at the moment, connects to a lot of major trends, uh, and is something that we're watching very closely.
And of course we're here on the trading floor of the New York Stock Exchange and we're continuing to monitor what's happening with the major stock averages, the indexes here, and II Singh has spent about 5 decades driving feeds towards zero.
So tell us what you Expect to see not just in the short term, but also the long term as well.
Yeah, that's right.
The uh the occasion for our event today is we're we're coming up on the 50 year anniversary of the first ever index fund, tracking the S&P 500 created by Vanguard and and particularly by, by.
Your viewers may know the name Jack Bogle, uh and it's great to be celebrating that, but you know, it took a really long time for these index funds to actually get any assets.
Uh, nowadays they are a significant way in which, uh, investors around the world, but especially individual investors through ETFs are able to access investment returns, whole markets, sectors, different pieces of the pie.
Um, the story of indexing for the past 1015 years has been one of significant growth, and that has been to the benefit of investors.
Just to give you, you know, one statistic that we use sometimes, um.
Compared to traditional actively managed mutual funds, the S&P series of US equity indices has been helping investors to save $52 billion a year in fees.
That's a lot of money going back into investors' pockets, and I think we can, something we can all celebrate.
And speaking of which, you're here at the New York Stock Exchange for this event in conjunction with Vanguard.
So tell us about the move of benefits beyond beta, and what does this mean?
So I think there there is an evolution in indexing that's gone beyond, you know, just core popular indices like the S&P 500.
So now there is a really wide range of, of different tools uh that investors can use.
And there are questions about, you know, where else will indexing become an important part of markets.
So I could say, you know, the bond markets is one.
Piece of it, there's also a lot of interest, research being done by our organizations around and others uh around spaces like crypto, uh, different tokens, um, and also private markets, so private credit, private equity is a space where currently there isn't the same level of sort of transparency and benchmarking that we're used to in the equities world.
There's a lot of effort to ask ourselves the question, how can we bring greater transparency to that space?
Um, so that's what we're talking about upstairs.
It's early days for some of those themes, but a lot of exciting innovation and development, um, expected over the next couple of years.
It was wonderful having you here join us on FinTech TV.
Thank you so much for your time and thank you so much for sharing all of your insights.
Thanks for having me.
My pleasure.