Navigating the Evolving Landscape of ETF

Eric M. Pollackov is the head of U.S. ETF Capital Markets at Invesco Ltd. His focus has been on the global listing and trading of Exchange Traded Products (STPs), corporate mergers and acquisitions due diligence, and business integration.

At Invesco, he proactively develops relationships with see-side trading desks, implements IVZ ETF capital markets strategies globally, and develops and measures the success of clients’ business plans. Eric shared his expert insights and valuable thoughts.

Journey Inspired by Mentors

From the humble beginnings on the floor of the American Stock Exchange to now, I have been groomed by my parents never to let anyone outwork me. I still hold on to this philosophy and have enjoyed watching the growth of an amazing technology that is known as the Exchange Traded Fund or ETF. Meeting people like Jack Bogle and Charles Schwab helped me focus on being a leader and wanting to take the next step in my career. Along the way, I also learned that surrounding yourself with strong mentors and adapting to market changes are just as important as hard work.

Leadership Philosophy in Capital Markets

I once had a manager, early in my career, who asked me Do you want to know a lot about a little or a little about a lot? I was not sure of the answer at that time in my life, but I have grown fond of knowing a lot about a little. Studying the ETF wrapper, market structure, and the overall motivations of people sitting across from you has guided me to where I am today. Over time, I have also come to realize that leadership involves listening and fostering an environment that encourages collaboration.

 ​Actively managed strategies are growing faster than any other type of ETF and have led to a whole new type of investor in those ETFs 

Balancing the Demands of Market Structure

The industry is a multi-pronged one with asset managers, exchanges, regulators, and investors all playing an important role. The Regulation National Market System was a vital market structure change that was passed in 2005 and benefited most investors compared to the prior environment, where price protection was not guaranteed. Balancing oversight with innovation requires an understanding that regulation should safeguard investors while still allowing creative financial products to flourish.

Exchange-Traded Fund Rule (ETF Rule)

Successful ETFs are an artful mix of marketing, sales, concept, and price. Finding the right combination has become increasingly challenging as more entrants enter the market following “The ETF Rule,” which lowered the barriers of entry but raised the barriers of success. Over 4,500 ETFs are vying for investors’ attention, which is no easy task. In global markets, local regulations, investor familiarity, and cultural nuances all add another layer of complexity.

Role of Global Trends in Reshaping Capital Markets

When ETFs were first created in the United States, in the early to mid-nineties, they were developed based on indexes and with retail investors in mind. The increasing sophistication of what can be packaged into an ETF has continued to grow ever since. Actively managed strategies are growing faster than any other type of ETF and have led to a whole new type of investor in those ETFs. Institutional adoption is also increasing rapidly. Over the next five years, I anticipate that customization and more investor-driven solutions will become an even larger part of the landscape.

Advice to Strategically Lead and Combine Technical Expertise

My philosophy is simple and potentially cliché! Be a sponge, ask questions at all times, and study your craft. There is no substitute for curiosity and preparation. Learn from everyone around you, even from areas of the business not directly in your scope. The ability to connect dots across different functions, while maintaining deep knowledge of your specialty, will set you apart.