It is hard to believe that 2020 will mark the 30th anniversary of the first ETF listed in Canada, the 27th anniversary in the United States, and the 20th anniversary in Europe. Having been involved in the ETF industry since before ETFs existed in Europe it has been interesting, frustrating and rewarding to watch many of the early sceptics become users and vocal supporters of the benefits of the product.
Exchange-traded funds (ETFs) are structured to provide liquid, cost-effective and transparent access to global markets, with the ability to also offer intraday pricing to investors. The benefits of the ETF wrapper have contributed to the huge popularity of ETFs over the past two decades. Until recently, ETFs have been synonymous with passive investment strategies. However, fund providers and investors are increasingly realising that the ETF wrapper is also an ideal home for actively managed investment solutions.
Changes in regulation, technological advances and an increasing focus on costs are reshaping the industry in Europe. Traditional models of long-term saving are feeling the strain. Savers have to contend with rising life expectancy, increasing personal liability for funding retirement, and lower interest rate and return expectations compared with historical standards. As a result, people have to move from being savers to being investors as they bear greater responsibility for securing their own financial futures. Our industry’s future success depends on how well we can service and support these individuals.
Jim Ross is an executive vice president of State Street Global Advisors and chairman of Global SPDR. In these roles, he is responsible for leading engagement with ETF stakeholders including regulators, mutual fund and ETF boards of directors, industry associations, key clients, partners and the media. Jim leads positioning on important issues related to ETFs and is responsible for advancing long-term ETF strategy and innovation. He is frequently quoted in the media due to his extensive history with these assets. As well as being responsible for State Street Global Advisors’ global funds management organisation, Jim is a member of the Executive Management Group and Global Product Committee.
When the new legislative framework MiFID II came in effect on 3 January 2018 already many hours went into the preparation from the participants of the ETF ecosystem but many more were to follow. Now one year into MiFID II we like to look into the challenges and implications with Stephan Kraus, Deutsche Boerse, and Jim Goldie, Invesco. What has been the biggest challenge for you?