President and CIO @ Frame Global Asset Management
“Technology is key as the ETF industry evolves.”
JE: Please tell us about yourself, your experience and your first job in the ETF industry.
Deborah: My career began in the broader investment industry over thirty years ago as an investment analyst, covering individual Canadian listed companies for Ontario Hydro’s internally managed pension plan. My degrees are in Business and Economics and a concentration in Finance when I did my MBA.
I was lucky to meet the CIO from Manulife while working at an unrelated summer job while I was attending university. He offered me a job the following summer on the investment desk and it was that experience that convinced me that I wanted to become a Portfolio Manager. I worked for five years as an analyst and then was promoted to a portfolio manager and was hired back to head up the Canadian equity desk at Manulife about seven years into my career. I worked at three additional firms and over twenty-three years headed up the portfolio management teams including as Chief Investment Officer at Empire Life until 2009.
The experience of 2008 highlighted the vulnerabilities of the institutional approach to managing portfolios and the restrictions of investment policy guidelines that result in removing from the portfolio manager the power to avoid losses. I approached a firm that had a global tactical asset allocation and loss minimization focus. They used ETFs to create their global tactical allocation models. I was a portfolio manager at that firm from 2009 until they were sold in early 2015.
JE: In 2015 you decided to set up your own business. Why did you decide to go this route and what was the pivotal moment?
Deborah: The pivotal moment for me was the sale of my previous firm. I saw that there was a growing interest in both the U.S. and Canada for portfolio strategies that focused on minimizing losses through optimizing asset allocation based on macro-economic factors.
Using ETFs there are a number of ways to create portfolio solutions at a low cost that satisfy these goals. We have developed and evolved our approach since our inception to improve on outcomes. It has been a great benefit to me to have the varied experience that I have had. While a CIO, I had the back office reporting to me and gained an appreciation for the systems that must support your product delivery. I was also head of compliance at my last firm and became very familiar with the process of becoming regulated and maintaining compliance in both Canada and the U.S.
These skills, in addition to the many years managing active portfolios, including trading basically came together to allow our new firm to cover all the bases with a small complement of people who have the skill-set required.
JE: Based on your experiences, what would you advise to someone looking to start their own ETF business? What does it take?
Deborah: The ETF business is a complex ecosystem: ETF issuers, index providers, exchanges, support in legal and accounting and strategists like Frame Global Asset Management who use ETFs to build portfolio solutions.
The biggest benefit when starting a business such as ours would come from having a core of strong and sizeable committed clients at the outset. In addition to that, the core competencies of the people that you start with need to be very broad. When first starting any business, a few people need to successfully accomplish what your competition is achieving with many more people. I am so fortunate to have a small, extremely competent team.
JE: What are the things you work on, what are some of the challenges that you face in your role and what do you enjoy the most?
Deborah: We produce global, tactical asset allocation models, using ETFs exclusively that are focused on client risk tolerance thresholds as defined by downside risk, rather than the traditional measure of risk as volatility or uncertainty.
Our models are client goal focused and all are highly successful at preserving capital. Our clients are currently SMA and high net worth accounts in the U.S. and Canada. We are registered as a Portfolio Manager with the OSC and as an non-resident RIA with the SEC. I work with the two portfolio managers on my team. We do research at the Macroeconomic, asset class/index and ETF levels. I also do ongoing research on work done in the investment research field regarding aspects of our investment process including downside risk and portfolio optimization.
I work with our team to write the monthly portfolio updates and quarterly review and outlook. I am also focusing on business development. While I enjoy everything that I do and appreciate the variety, I enjoy the research aspect the most. I will always be a researcher as I am innately curious about all aspects of global economies and markets.
JE: Was there a time throughout your career when you were unsure about where you were going? How did you combat the uncertainties?
Deborah: I have been fortunate to have a career that involves doing what I am passionate about. The most difficult times have been when there have been changes in the companies where I worked that resulted in changes in my own employment situation.
I have experienced this a few times, which is common in our industry. Great investment teams are often broken apart by these sort of changes and it is always disheartening when something that has worked is destroyed for an external reason. I have become resilient as a result and my resolve to focus on what I do best and what works grows each time. Our investment approach is considered different and our greatest challenge is securing the opportunity to explain this approach and why it overcomes many of the shortcomings of traditional asset management to prospective clients.
JE: What has been the highlight of your career to date?
Deborah: The highlight of my career has been to start my own firm. We have the opportunity to offer to our clients, portfolios that will meet their investment goals.
JE: What is your role in the Women in ETFs Association?
Deborah: I am Co-Head and one of the founders of the Canadian Chapter of Women in ETFs.
Women in ETFs is a global organization founded in January 2014. WE is a non-profit organization that brings together over 2,500 members, in chapters in major financial centers across the United States, Canada, EMEA and Asia Pacific to further the careers of women by leveraging their collective skill and ambition. The mission is:
To Connect with our colleagues in the ETF Ecosystem;
To Support each other and allow an easy way for like-minded people to develop networks;
And to Inspire- to highlight key talent in a unique way to develop role models, mentors and sponsorships.
JE: What is the best bit of advice you’ve received? And what advice would you give to those who are just starting in the industry?
Deborah: The best advice that I have received is to hire well, especially people who are much more competent than I am at their jobs. Along with this advice goes making sure all team members know that they are valued and respected.
JE: What key skills do you think professionals need in order to be successful in the ETF industry?
Deborah: The ETF ecosystem includes ETF issuers, index providers, exchanges, support in legal and accounting and strategists like Frame Global Asset Management who use ETFs to build portfolio solutions. Almost every aspect of it involves leading edge technology. This is key as the industry evolves. It ties into the bigger requirement of embracing change and adapting to change to remain relevant in this industry.
JE: If you had a magic wand, what one thing would you change in the ETF industry?
Deborah: As the ETF industry is a relatively young part of the investment industry, I would like to see the rules about years of track record and minimum assets under management set aside so that new strategists have an opportunity to offer their models to institutions and advisors.
For managers like me with many years of track record that is in the public domain, starting a new firm but being held to that criteria mean that our portfolio models are not being offered to those institutions and advisors that could use then to the benefit of their clients.
JE: Finally, let’s talk predictions. What trends do you think are going to define the industry in the next few years?
Deborah: I expect to see technology play a bigger part. More robo advisors, more technology in the way we deliver portfolio solutions and use of faster and more robust software to manage and learn from the data that we analyze in creating our portfolios.