Managing Director, Global Head of Exchange Traded Products @ S&P Dow Jones Indices
John Davies is Managing Director, Global Head of Exchange Traded Products at S&P Dow Jones Indices where he leads the global effort for ETF licensing, playing a key role in engaging with ETF stakeholders and managing ETF partner relationships. He also serves as President of S&P DJI Netherlands BV.
John recently sat down with Jobs in ETFs to discuss career challenges and highlights, culture at S&PDJI and challenges ahead for the ETF industry amongst other topics.
“it’s not a question of whether the glass is half full or half empty . . . is it refillable?” . . . It doesn’t matter if you’re positive or negative on something, you can always find a solution.”
Jobs in ETFs (JiE): How did you get into the ETF business?
John Davies (JD): I got into indexing and ETFs purely by accident having been made redundant from Schroders. After spending six months enjoying sporting events and gardening I actually thought that I wouldn’t go back to the City until I wound up having lunch with Mark Makepeace where we talked about a project for FTSE.
Initially, we discussed working for six months, but I ended up spending two years at FTSE working with pension funds and governments on indexing.
I then moved to S&P Dow Jones Indices after getting a call from them and have spent the last 15 years there.
JiE: How have you known when to move jobs?
JD: I never really considered the right time to move as the opportunities just presented themselves.
Roles have grown as a result of the passive industry growing. There were around 100 people at S&P globally when I started here now there are over 500. This can be directly linked to the growth in the indexing business.
When I first joined, the company was small and so I had the chance to work on pretty much anything. My role involved everything apart from calculating the actual index.
JiE: Are there particular elements of culture at S&PDJI that drew you to the business and keep you there?
JD: S&P Dow Jones Indices has a relatively flat, open management structure and so I have direct access to the senior leadership team. It is something that is available to everybody and has purposely been designed that way.
We also offer flexible working if the job allows it. This sort of approach has shown new joiners how cognisant of work life balance we are.
JiE: What do you look for in people that you hire? What do they need to bring to the team in terms of skills or attitude?
JD: We are a lean operation and again, this is intentional.
We are aware that not everyone has an outgoing personality and even those who are outgoing might not always be right for a certain role but we do like people who are not afraid to ask questions and are able to work independently.
They need to be inquisitive because – while there is a certain level of intelligence and experience expected – the industry is constantly evolving, so people who are keen to learn more work well in this industry.
JiE: Have you made any bad hires and how do you avoid this?
JD: It’s a testament to the environment at S&P Dow Jones Indices that our staff turnover is extremely low. We have had a few people who have come across really well in interviews but were not quite the right fit.
It’s a continuous learning process and you end up with a gut sense or a feeling about people and you have to trust that.
JiE: Is there a killer question you like to ask candidates at interviews?
JD: One question I always ask in an interview is: if the answer is 42, what is the question?
I get a lot of maths-based answers to this, but really it’s about thinking outside the box and the answer is from the Douglas Adams book Hitchhikers Guide to the Galaxy…….”42 is the meaning of life, the universe and everything!”
JiE: What has been the biggest challenge of your career?
JD: Being relevant in terms of the business is massively important as it has changed a lot over the last few decades.
The changes over 30 years are quite outstanding and keeping on top of this is the biggest challenge. My main focus is our ETF business and keeping up with the innovation and everything that comes with that globally is a challenge.
One of my key responsibilities is keeping abreast of regulation across all markets globally and ensuring that we are cognisant of the potential impacts to our clients and our products.
JiE: What has been the highlight of your career?
JD: I hope it’s yet to come.
I’ve had some amazing experiences with my work so far, it has given me the opportunity to travel around the world and meet amazing people. I have presented to the UN and have met the finance ministries of a number of countries such as India, Japan, Russia and Argentina. We were also instrumental in the biggest single ETF launch at the time for the Indian Government. These are all memorable and I look forward to many more.
JiE: What is the best piece of professional advice you have received?
JD: I was told once: “it’s not a question of whether the glass is half full or half empty, but whether it’s refillable”
This stuck with me because it’s true. It doesn’t matter if you’re positive or negative on something, you can always find a solution.
For example, one of the things we see changing is that we used to have off the shelf products but now clients want more bespoke solutions and we have adapted to work even more collaboratively with our clients because of that.
JiE: Is having a mentor important?
JD: I have both had a mentor and been a mentor.
We have a mentoring program at S&P Global and I was assigned a mentor in 2006. In fact, I had Michelle Ferguson who was one of the founders of the program and she was exceptional, so much so we still speak today. A few years after this I was asked to be a mentor for a colleague from our Frankfurt office.
The system works well as you don’t mentor anyone in your own group/department. This is a good thing because it stops you getting bogged down in the minutiae of how your day-to-day business works.
I personally think it’s extremely important – we see it works well in the industry, groups like Women in ETFs have been a good thing, and it helps that they also include men!
JiE: What advice would you give to people starting out in the ETF industry today?
JD: It really helps to understand the whole ecosystem, how it works, fits together and the nuances. The other piece of advice I would give is to network. To have a successful career in this industry, it’s a combination of what you know AND who you know!
JiE: What is the greatest challenge on the horizon for ETFs and what are you most excited about for the ETF community?
JD: There are a lot of challenges and exciting developments on the horizon.
In Europe, the industry needs more collaboration from all participants in the ETF Ecosystem but we won’t know how the business will develop post Brexit.
In Asia and China we are waiting to see whether these markets will open up and if ETF Connect will happen. At the same time, there are recent developments in South America that allows the passage of ETFs.
In the U.S., there is the entry of the Precidian Non-Transparent ETF model (active ETFs) and one of the challenges here is one of education. Understanding how they work is really important now.
From a product perspective there is increasing interest in ESG. This is an exciting challenge for the product space. We expect more clients and investors will incorporate ESG principles in more mainstream investment decisions.
There is still a lot of work to be done. ETF assets are still only 10% of mutual fund assets. It’s also key to remember that ETFs are not an investment solution in themselves, they are a wrapper.
JiE: What is work-life balance for you and how do you achieve it?
JD: I have two teenage children who are more or less independent now. I spend on average, three out of five weeks out of the country, so when I’m here I make sure they are OK, spend time with them.
I travel so much that I get a good level of downtime in whichever country I am in. The last time I was in Japan I had a weekend there, it meant I could go to Mount Fuji, which was amazing. I get to see more of the cities I go to now. I make time to enjoy where I am.
I also have a rule that I won’t leave the country on business in August or between Christmas and the middle of January.
I’m very fortunate to love what I do, the people I meet and the places I visit.