It’s a great time to enter the exchange traded fund industry. Once dismissed as an esoteric corner of capital markets, ETFs are a burgeoning force to be reckoned with around the globe, from the US and Europe to the Middle East and Australia. It’s all down to these 5 reasons why the ETF industry remains a popular choice amongst the brightest.
1) A Steady Career
Your career in the world ETFs may, like any other, have its ups and downs, but one certainty is that the ETF market is resilient. While hedge funds and actively managed funds tanked in assets during the financial crisis of 2008 – causing mass job redundancies – assets in ETFs continued to grow. Since they track an underlying index and are not dictated by the whims of an active manager, they were also the first funds to recover in line with markets. ETFs have grown from zero to $3.408 trillion US dollars at the end of Q3 2016 worldwide (according to ETFGI), and PricewaterhouseCoopers estimates the industry will reach $7 trillion in assets by 2021.
2) A Dynamic Industry
There are more than 2,000 ETFs listed in Europe alone, across multiple stock exchanges. And it’s not just US equities or German bunds. ETFs can invest in anything: from African small caps to Israeli tech companies and socially responsible bonds. Providers are always looking for the next big innovation, whether it’s in the index construction, smart beta funds or constructing an ETF that is actively managed. An ETF is essentially a wrapper, and the world of investments is your oyster.
3) Transferable Skills
As ETFs grow on a global scale, it might be best to check your passport is still up to date. According to interviews with industry participants on Jobs in ETFs, skills are transferable – whether you’re on the buy or sell side – and can take you abroad. Kris Walesby, head of ANZ ETFs, for example, spoke about his entrepreneurial drive and his desire to live abroad. He made that happen when he was asked to start up the ETF Securities’ client-facing capital markets business in Australia. He said that although every market was different, the one thing that did not change was the technical knowledge of how ETFs work – and that knowledge in itself was highly transferable.
4) Making The World A Better Place
Socially responsible investing (SRI) and environmental, social and corporate governance (ESG) are two of the biggest themes in the ETF industry right now. One of the most popular ETF launches in the US this year was the SPDR SSGA Gender Diversity Index ETF (SHE), which has already gained more than $282 million in assets.
According to independent consultant and market expert Robert Broadwell, one of the key developments in the space over the last year is the launch of additional ETFs that weight portfolio companies on environmental, social and governance scores (ESG) without negative screens for specific industries.
Index and product providers are constantly developing ways to exclude unethical securities, from companies that employ child labor to corporations that work to please their highly-paid executives rather than their shareholders. The bottom line is that ETFs are not like hedge funds, with so-called ‘2 and 20’ fees and opaque investments. ETFs are about transparency, low fees, and – increasingly – working to align investors’ ethical concerns with their portfolios.
5) Networking Potential
Despite all the advantages outlined above, the ETF industry is still rather cozy. You might bump into familiar faces at awards events and cocktail receptions, but this allows you to build a solid professional network in a short time. For women, the highly successful Women in ETFs networking group is building its membership, hosting events, educational seminars and offering possibilities of mentorship. Men are also encouraged to join the group and participate.
The person you met over that smoked salmon canape could turn out to be the contact you need in six months’ time. Let’s raise a toast to that.