Co-Founder @ ETF Radar/ETPHQ
“Have a decent basic skill-set in finance and investing, strong inter-personal skills and a steady desire to explore new things beyond the ordinary finance world.”
JE: Please tell us about yourself?
Martin: I started my financial career in 1996 with a bank apprenticeship in Germany, a perfect way to dive into and explore the different segments. It quickly turned out that the financial markets, stock and warrant trading was the place to be and the late 90’s was a great time to learn that boom and bust are close friends.
JE: What was your way into ETFs?
Martin: After laying solid groundwork, I had associate roles within institutional asset management and climbed up the ladder with senior positions as a JV of State Street/PIMCO and BayernLB, where I ran the product development for equity and commodity linked products. Simultaneously, I studied and graduated in 2005. That was the year I started following the industry on a daily basis and still found it fascinating.
JE: In 2009 you decided to set up your own ETF business. Why did you decide to go this route and what was the pivotal moment?
Martin: I was invited to the foundation event of Source ETFs in Spring 2009. A year before we had laid the groundwork for a news platform in the U.S. already. So, the birth of Source ETF ultimately was the moment of starting with a global, mostly transatlantic, ETF organization called “ETF Radar”. Besides marketing and consulting, we started publishing the first global ETF magazine and conducted a lot of premiere projects, like one of the first ETF collateral reviews in Europe. All these things and the experience I gained helped me to build and boost my Swiss ETP business with payoff.ch
JE: You are active in the U.S. and Europe. What is your favorite place and where do you see better career opportunities in the ETF space?
Martin: There are some favorite places, not just one: Southwest Florida, the Carolinas and, of course, the Swiss Alps and the Côte d‘Azur. Speaking of career opportunities: New York City, among other U.S. locations, is the place to be. London is still the hot spot for Europe. Though, this could change dramatically due to the infamous Brexit aftermath, but I hope not.
JE: Based on your experience what would you advise someone looking to start their own ETF business?
Martin: First of all, challenge your own business plan seriously, but make sure that your enthusiasm and motivation is still vital. If you wouldn’t work 10 hours and over weekends, and you’re not a multi-talent, it’s better to remain in your corporate career. Also, try to find a niche, listen to underserviced client segments or laments of the big asset owners. For example, there are a few new index providers currently starting and some of them could overrun the established Goliaths within a decade.
JE: Give us an example of a lesson that you learned during your career?
Martin: Good question! One example is that we should have asked some ETF advertising guys earlier whether they would be able to support publications that cover multiple markets, which they did not because of their individual sandboxes. That’s why editions or content sections per country – not per continent – are recommendable sometimes.
JE: What does it take?
Martin: Try to find some mentors that find you and your idea worth supporting. To be clear: If nobody supports your idea or falls in love with the project, better skip it and try the next one or shape it. Just having the words “ETF” on your pitch slide deck doesn’t make the idea great! There are many ETF service providers and even ETF providers out there, only a few really have fun and earn decent money. Finally, care about the details!
JE: Was there a time throughout your career when you were unsure about where you were going?
Martin: Absolutely, we all have these moments. Questioning our human purpose is a great opportunity to refocus and detox your mind. I am a person with high attention to environmental, wildlife, and animal protection matters and I frequently devote money and time to such projects and campaigns. There are higher goals in life than just selling ETFs or creating great indices.
JE: How did you combat the uncertainties?
Martin: With very strong support from my family and faith.
JE: WILEY has recently published “Beyond Smart Beta”, the ultimate ETF & Index Investments book you co-authored. What is the story behind it?
Martin: With this book, my two co-authors and I want to provide a timely all-in-one resource offering a holistic view about the ETP universe plus insights, reviews, and critical aspects on the latest developments in indexing – better known as “smart beta” – and how investors could benefit most from blending active management with passive products. We also packed many practice examples, tables and charts into it.
JE: Who should read your book?
Martin: I would say it’s a publication for all types of financial professionals who want to broaden their horizons in the ETP and indexing space. It is also an excellent resource for students and academics who want to dive into the ETF industry.
JE: What is the best bit of advice you’ve received in your career?
Martin: Great question, I mostly adopted some business attitudes from direct bosses with whom I shared empathy, or successful business leaders, and mixed it with my own characteristics and management style. Finally, I would say: Fortune favors the bold!
JE: What advice would you give to those who are just starting in the industry?
Martin: Have a decent basic skill-set in finance and investing, strong inter-personal skills and a steady desire to explore new things beyond the ordinary finance world. The ETF and indexing space is still essentially a blending of traditional asset management views with new, often creative, ways to invest into themes and theories aka factors.
JE: What would you do if you were entering the industry today?
Martin: The only things, which are today in some cases overweighed within the ETF and indexing space, are quantitative credentials. So, perhaps I would add designations like the CAIA or CFA – much faster as career starters.
JE: …would you do anything differently?
Martin: No, I mostly would keep a clear focus on the financial world and strive to work for different companies and different roles.
JE: Finally, let’s talk predictions. What trends do you think are going to define the next few years in the ETF industry and ultimately impact employability?
Martin: There are some trends people should keep an eye on: For example, in the U.S. and Europe, the price war on broad assets class ETFs seems to be largely won by the big ETF issuers. Simultaneously, their USPs have somehow vanished. So, it’s all about offering additional solutions, not just being the cheapest guy on the yard. This leads to the ability of a provider to have multi-skillset employees, not just cold calling sales guys.
In the U.S. there are certain niches that still offer very attractive potential for index-linked investments. In Europe, we all should watch out for Vanguard in the next quarters – they could become one of the Top 3 in the next two years. Finally, Asia is still an underexplored market for ETFs and index-linked solutions. This is a career opportunity too.