An analyst from Messari pointed out, the popular, and newby-friendly defi-indexes are not so sophisticated, and not diversified. For example, the Defi Pulse Index has more than 70% allocation only from four big tokens. And these four assets are highly correlated.
Indexes are pretty regular in traditional finance, because this is an ultimate way for diversification, and decrease the overall risk. For a few years, we also have indexes in crypto, in more form. But as you can see, where 20% allocation meets 2%, hard to say any balance, and true diversification.