In the years since the Global Financial Crisis we have seen incredible returns in the equity markets. It has been wonderful for investors, for many of us, and for our clients. Of all the markets around the world, the US markets have done the best. As a result of home bias, the dominance of the US markets have given even more of a boost to our portfolios and our businesses. And of all the stocks inside the US markets, none have done quite as well as the largest platform technology stocks. Single stock market caps vs entire S&P 600 Source: Exponential ETFs | Data source: Bloomberg LP 1/16 ..read more

Detroit is a tough town. The weather is tough, the people are tough, the sky is grey for eight months out of each year. I didn’t grow up in Detroit so there are things I notice as an outsider. Like the fact that everyone starts work early in Detroit. They start the day early, they quit the day late, and in between they work hard. The morning in Detroit has a certain toughness. Tough people with thick old gloves and boots carrying thermoses and lunch pails to their jobs. White-collar workers walking with a touch of shame; blue collar workers with a touch of pride. That, more than anything, is a ..read more

As we head into the second half of 2019 I am very excited about what we have coming up for the ETF Experience Podcast – over the next few weeks we’ll be rolling out episodes with Catherine Wood of Ark, Craig Lazzara at S&P, “Random” Roger Nusbaum, and a few surprise guests that are going to be informative, inspirational and fun. I thought it would be a good time at the half-way point in the year to stop and take note of the shows we have had so far. Below is an index of all our guests and episodes in the first half of 2019, along with my favorite quote from each one. You can listen to the ..read more

It sure isn’t the money that motivates a true craftsman. When you love what you build, the product itself is the reward. A true craftsman wants to build things the right way, products that will stand the test of time. And it doesn’t matter one bit if the masses can tell the difference. The craftsman knows, and that is all that matters. Which is to say, in 2019, a financial product developer who fashions himself a craftsman and loves the products that he builds, those products are going to come out the finished end of the assembly line in one structure only: an ETF. Those features that make the ..read more

It’s the shoe polish that gives it away. That is how you know where you are. Standard issue is an eighth inch thick, and shiny. But for the young and hungry, the ones hoping to climb that ladder, the shoe polish can reach as much as a quarter inch thick. Shiny shoe polish; that is how you know you are at Blackrock. As an organization, iShares – built by Barclays Global Investors and now controlled by Blackrock – has done as much for investors as any company not called Vanguard. That is a fact that nobody can deny. iShares has succeeded in their mission of democratizing investments and has been ..read more

The Bunk said it best when he told Omar “a man must have a code”, and two decades before I took up the battle against market cap weighted portfolios I was writing pseudonymous posts about baseball statistics with my “code” focused on the critical missions of getting intentional walks excluded from advanced baseball metrics, and how to normalize opposing pitchers faced for pitcher evaluations in fantasy baseball (less an AL/NL issue than a SP/RP issue, it turned out). A man must have a code. Khris Davis is a .247 hitter. We all love round numbers, but it would be incorrect to call him a .250 h ..read more

There’s an order to things, a way they go. In the asset management space, an angel investment can get a new company started, after which venture capital is infused at different rounds, typically following sales targets being achieved. The venture capital is plugged into the distribution network so that the asset growth can scale up by doing more of what is already working, just with more salespeople. Do that well for a few more years and then the investment bankers come in and arrange a sale or an IPO. Champagne and options payouts ensue, followed by the good life of board seats and thrice-a-w ..read more

If you look up the word exemptive in the Oxford Dictionary, you won’t find any results. The word “exemptive”, it turns out, is actually not a word at all. ETFs have been primarily governed by the Investment Company Act of 1940, which is essentially a rule designed for mutual funds. The “40 act rule”, as the name implies, was written up almost 80 years ago in a generation that could never imagine the efficiencies and varieties of low cost investment options that would become available to investors today. To launch an ETF, an issuer has always had to go to the SEC to get a specific approval know ..read more

I should have known because we stopped sending press releases. This was back, I don’t know, 2012 or so. I was working at the New York Stock Exchange and my clients were ETF issuers. My job was to move the ball forward on market structure initiatives, help issuers get product filings through the SEC 19b4 process, and to generally keep clients happy. The easiest way to keep clients happy was to leverage the NYSE brand to help them promote their funds. And the easiest way to do that was to send out our own press release when they launched a new fund to help get them some media exposure from the t ..read more

Writing letters is hard.  I imagine writing letters that you know will be read (and read into) by literally millions of people is even harder.  The trick is the opening. If you can nail the opening sentence and plant the seed of your main point with the reader you are well on your way.  Jeff Bezos crushed this in his letter to shareholders today.  How? Before we do that let’s take a look at an excerpt from Amazon’s 1997 original shareholder letter: Obsess Over Customers “From the beginning, our focus has been on offering our customers compelling value. We realized that the Web was, and still ..read more