1 00:00:07,040 --> 00:00:09,800 Speaker 1: Hey, this is Trillions presents the e t F Story. 2 00:00:10,280 --> 00:00:13,320 Speaker 1: I'm Joel Weber and I'm the editor of Bloomberg Businessman. 3 00:00:14,360 --> 00:00:16,639 Speaker 1: During the series, we've been tracing the story of the 4 00:00:16,640 --> 00:00:22,840 Speaker 1: exchange traded fund from its origin in the SEC's market 5 00:00:22,880 --> 00:00:26,840 Speaker 1: break report, to building its legal structure to finally bringing 6 00:00:26,880 --> 00:00:31,200 Speaker 1: it to market. Today, it remains the largest GTF with 7 00:00:31,240 --> 00:00:35,000 Speaker 1: two D seventy billion in assets. But when Spy first 8 00:00:35,080 --> 00:00:38,400 Speaker 1: launched in let's just say, it didn't exactly take the 9 00:00:38,440 --> 00:00:43,239 Speaker 1: world by storm. Gary Eisenrich is a managing partner at 10 00:00:43,320 --> 00:00:47,440 Speaker 1: fair Field Advisors. At the time of spies launch, he 11 00:00:47,600 --> 00:00:51,519 Speaker 1: was a specialist at spear Leeds and Kellogg, tasked with 12 00:00:51,600 --> 00:00:56,160 Speaker 1: providing liquidity as the product's first market maker. A market 13 00:00:56,160 --> 00:00:59,000 Speaker 1: maker is someone who matches buyers and sellers and then 14 00:00:59,040 --> 00:01:02,640 Speaker 1: takes a small On its first day, Spy traded about 15 00:01:02,640 --> 00:01:05,400 Speaker 1: a million shares, and eisen Rick says there was a 16 00:01:05,400 --> 00:01:08,520 Speaker 1: lot of fanfare. There was the big spider, and there's 17 00:01:08,640 --> 00:01:10,920 Speaker 1: all the T shirts and the hats, and a lot 18 00:01:10,920 --> 00:01:12,840 Speaker 1: of dignitaries and a lot of people because it was 19 00:01:12,880 --> 00:01:16,600 Speaker 1: a new issue. And then they put up the first print. 20 00:01:16,640 --> 00:01:18,240 Speaker 1: It was two hundred shares and they had it on 21 00:01:18,240 --> 00:01:20,199 Speaker 1: the ticker tape. I've got a copy of it, and 22 00:01:20,560 --> 00:01:22,520 Speaker 1: they had a few of those, and and so I 23 00:01:22,560 --> 00:01:26,119 Speaker 1: have the initial thing, and then some initial orders happened, 24 00:01:26,120 --> 00:01:31,760 Speaker 1: and then it just sat. Yep, it just sat. Then 25 00:01:31,800 --> 00:01:35,360 Speaker 1: over the next six months that volume went down very 26 00:01:35,480 --> 00:01:38,720 Speaker 1: rapidly to where it was trading eighteen thousand years a day. 27 00:01:38,959 --> 00:01:42,280 Speaker 1: Eric Baltunas and E. T. F analysts with Bloomerican Intelligence 28 00:01:42,280 --> 00:01:46,319 Speaker 1: and our resident historian, says it was disappointing, and rumors 29 00:01:46,319 --> 00:01:49,440 Speaker 1: about whether Spy would live on became spread. So kind 30 00:01:49,480 --> 00:01:52,480 Speaker 1: of had this big hype first day, and but then 31 00:01:52,480 --> 00:01:55,360 Speaker 1: it kind of trailed off. And I don't know if 32 00:01:55,360 --> 00:01:57,040 Speaker 1: they were looking to close it. I heard that, but 33 00:01:57,080 --> 00:01:59,080 Speaker 1: I'm not sure if that's totally true that. In fact, 34 00:01:59,080 --> 00:02:00,440 Speaker 1: I had a number of people say, and Gary, are 35 00:02:00,440 --> 00:02:02,640 Speaker 1: wasting your time. It's not gonna make it. But I 36 00:02:02,720 --> 00:02:04,800 Speaker 1: really felt strongly that it was a good enough product. 37 00:02:04,800 --> 00:02:06,920 Speaker 1: It was only twenty five basis points, and to be 38 00:02:06,960 --> 00:02:09,200 Speaker 1: able to go in and trade that into day was great. 39 00:02:09,840 --> 00:02:13,160 Speaker 1: So getting it adopted was the hard part. So how 40 00:02:13,160 --> 00:02:15,600 Speaker 1: did they do it? How did Spy go from treating 41 00:02:15,639 --> 00:02:19,280 Speaker 1: eighteen thousand shares a day to being the world's largest ETF. 42 00:02:21,160 --> 00:02:24,839 Speaker 1: Gary Eisenrich was leading these guerilla marketing efforts. He said 43 00:02:24,880 --> 00:02:28,560 Speaker 1: he was able to sell people on spiders structure, and 44 00:02:28,560 --> 00:02:31,040 Speaker 1: when those people had success with it, they ended up 45 00:02:31,080 --> 00:02:33,520 Speaker 1: telling others. Besides, if they have a good experience trading 46 00:02:33,600 --> 00:02:35,680 Speaker 1: hunter of those shares, they're going to tell the guy 47 00:02:35,720 --> 00:02:38,079 Speaker 1: that's going to trade ten thousand shares. And that's basically 48 00:02:38,120 --> 00:02:41,400 Speaker 1: how Spiders was from word of mouth and and a 49 00:02:41,520 --> 00:02:45,400 Speaker 1: cheap product, and and people that money managers that we 50 00:02:45,400 --> 00:02:47,360 Speaker 1: didn't want to buy an expensive product that had an 51 00:02:47,400 --> 00:02:49,400 Speaker 1: embedded hundred basis points. They wanted to have it at 52 00:02:49,440 --> 00:02:51,919 Speaker 1: twenty five basis points. And it sort of had to 53 00:02:51,960 --> 00:02:55,760 Speaker 1: be word of mouth because brokers had no incentive to 54 00:02:55,840 --> 00:02:58,680 Speaker 1: sell Spy. So he hit the road with people from 55 00:02:58,760 --> 00:03:03,120 Speaker 1: the American stock Age or am X to talk about Spy, 56 00:03:03,200 --> 00:03:04,919 Speaker 1: and and it was a sale on the m X too. 57 00:03:04,960 --> 00:03:07,160 Speaker 1: I mean, it didn't have the best reputation of that, 58 00:03:07,200 --> 00:03:09,760 Speaker 1: you know, and I don't know that that was warranted 59 00:03:10,040 --> 00:03:12,120 Speaker 1: at all. But I would go to people places and 60 00:03:12,160 --> 00:03:13,959 Speaker 1: they say, I'm not trade on the antics, but to 61 00:03:14,000 --> 00:03:16,440 Speaker 1: get that going, and after a while you would talk 62 00:03:16,480 --> 00:03:18,959 Speaker 1: to people and say, I will make you with fair 63 00:03:19,080 --> 00:03:22,840 Speaker 1: market and trade. So it caught on because people were 64 00:03:22,880 --> 00:03:25,919 Speaker 1: happy with the experience, they were happy, they were happy 65 00:03:26,000 --> 00:03:29,600 Speaker 1: with the return that they were getting. Eric says, people 66 00:03:29,800 --> 00:03:34,360 Speaker 1: including Eisenrich, who are advocating for SPY early on were 67 00:03:34,360 --> 00:03:37,520 Speaker 1: true believers in the product, and that got things moving. 68 00:03:37,600 --> 00:03:43,480 Speaker 1: That's important because repetition, guerrilla marketing, that stuff matters. But 69 00:03:43,560 --> 00:03:46,280 Speaker 1: then you need that plus some kind of an outside catalyst. 70 00:03:46,360 --> 00:03:48,760 Speaker 1: And the outside catalyst was the nineties economy kicked in 71 00:03:48,840 --> 00:03:53,000 Speaker 1: right around and that's just the good year to be 72 00:03:53,080 --> 00:03:56,760 Speaker 1: offering SMP hundred exposure. So you had that outside catalyst 73 00:03:56,840 --> 00:03:59,280 Speaker 1: mixed in with the guerrilla marketing at the bottom of 74 00:03:59,280 --> 00:04:01,839 Speaker 1: from true believers, and that's when you started to see 75 00:04:01,840 --> 00:04:04,920 Speaker 1: the assets grow and then from there basically double disassets 76 00:04:04,960 --> 00:04:08,480 Speaker 1: every year for the next whatever decade. Whether it's a 77 00:04:08,520 --> 00:04:10,680 Speaker 1: happy accident or whether it was the hard work of 78 00:04:10,720 --> 00:04:13,480 Speaker 1: the folks at the m X really getting everybody to 79 00:04:13,600 --> 00:04:17,479 Speaker 1: play ball at the same time for their own enlightened 80 00:04:17,520 --> 00:04:21,320 Speaker 1: self interest reasons, it wouldn't have ever worked. Dave Nodded, 81 00:04:21,760 --> 00:04:25,000 Speaker 1: the long time managing director of et F dot Com, 82 00:04:25,160 --> 00:04:28,679 Speaker 1: says there was skepticism lurking in the background. As Spy 83 00:04:28,800 --> 00:04:32,080 Speaker 1: and others moved into the marketplace, the skepticism was around 84 00:04:32,120 --> 00:04:34,279 Speaker 1: whether or not you would ever get both sides of 85 00:04:34,320 --> 00:04:36,440 Speaker 1: the market to participate. And what I mean by that 86 00:04:36,560 --> 00:04:40,560 Speaker 1: is you had to have institutions willing to buy these things, 87 00:04:40,560 --> 00:04:43,800 Speaker 1: willing to buy Spy to get their SMP exposure. But 88 00:04:43,880 --> 00:04:46,520 Speaker 1: at the same time you needed to have people willing 89 00:04:46,600 --> 00:04:50,480 Speaker 1: to be market makers and authorized participants that would arbitrage 90 00:04:50,560 --> 00:04:54,160 Speaker 1: out price discrepancies. And I will admit when I first 91 00:04:54,200 --> 00:04:58,120 Speaker 1: started waiting into this, I was enormously skeptical that that 92 00:04:58,320 --> 00:05:01,160 Speaker 1: second part would show up, because there is a real 93 00:05:01,279 --> 00:05:03,160 Speaker 1: chicken in the egg problem. Right If you only end 94 00:05:03,200 --> 00:05:06,000 Speaker 1: up with one institution that buys fifty million dollars of 95 00:05:06,080 --> 00:05:08,960 Speaker 1: them and then they never trade again, then the second 96 00:05:08,960 --> 00:05:12,120 Speaker 1: side that that ap and market maker side never comes online, 97 00:05:12,440 --> 00:05:15,479 Speaker 1: and the whole thing is a failure. So once Spy 98 00:05:15,680 --> 00:05:18,520 Speaker 1: kind of took off and other people thought to use 99 00:05:18,640 --> 00:05:21,640 Speaker 1: this structure in and track other things, not just the 100 00:05:21,720 --> 00:05:25,000 Speaker 1: SMP five hundred. So one of those things was international, 101 00:05:25,920 --> 00:05:28,640 Speaker 1: and so they had a line of ets from Morgan 102 00:05:28,720 --> 00:05:31,679 Speaker 1: Stanley that came out that were called Webbs, Bob Tole 103 00:05:31,800 --> 00:05:34,960 Speaker 1: began working with Nate Most on this very project from 104 00:05:35,000 --> 00:05:38,679 Speaker 1: Morgan Stanley. So Nate and I start formulating what became 105 00:05:38,760 --> 00:05:41,839 Speaker 1: eventually the filing for WEBS. I have to work with 106 00:05:41,960 --> 00:05:46,359 Speaker 1: Nate because he's so far advanced into thinking compared to 107 00:05:46,400 --> 00:05:51,160 Speaker 1: anybody else at Morgan Stanley. Even so, it's probably October 108 00:05:51,240 --> 00:05:53,400 Speaker 1: ninety three. We get back together right after the summer, 109 00:05:53,680 --> 00:05:56,720 Speaker 1: and we're gonna take and create what we know from 110 00:05:56,720 --> 00:06:01,799 Speaker 1: our commodities world is a receipt. We draft the prospectives, 111 00:06:01,839 --> 00:06:05,200 Speaker 1: We worked with the lawyers from Solomon and Cromwell and 112 00:06:06,080 --> 00:06:09,400 Speaker 1: Lo and Behold, we designed the filing that goes in 113 00:06:09,839 --> 00:06:15,039 Speaker 1: its world equity benchmark shares hence webs. Toll says he 114 00:06:15,120 --> 00:06:19,120 Speaker 1: was very strategic about presenting this new webs product. He 115 00:06:19,240 --> 00:06:22,800 Speaker 1: and Nate Most carefully educated people about what the product 116 00:06:22,880 --> 00:06:25,359 Speaker 1: would really look like. One of the things that was 117 00:06:25,400 --> 00:06:29,320 Speaker 1: so paramount in our thought process was that we wanted 118 00:06:29,480 --> 00:06:32,120 Speaker 1: e t S to be a no fail environment. Even 119 00:06:32,160 --> 00:06:35,400 Speaker 1: though we were trading international securities and packaging them all up. 120 00:06:35,839 --> 00:06:39,000 Speaker 1: We didn't want to fail. Long story short, Spy was 121 00:06:39,040 --> 00:06:41,520 Speaker 1: always known as the Spiders even when M d y 122 00:06:41,640 --> 00:06:43,600 Speaker 1: CA met. That was also sort of the Spiders. That 123 00:06:43,680 --> 00:06:46,640 Speaker 1: was just what they called them. So when they Morgan 124 00:06:46,720 --> 00:06:49,640 Speaker 1: Stanley wanted to put out something that used this this structure, 125 00:06:50,400 --> 00:06:53,479 Speaker 1: but they wanted to have it track international markets, you know, 126 00:06:53,560 --> 00:06:56,920 Speaker 1: like Brazil and Mexico and that kind of thing, because 127 00:06:57,279 --> 00:06:59,839 Speaker 1: traders like to trade the whole country at once and 128 00:07:00,000 --> 00:07:02,840 Speaker 1: not just pick a stock. When they came out with 129 00:07:02,920 --> 00:07:06,760 Speaker 1: their idea for these international type ETFs, they didn't have 130 00:07:07,160 --> 00:07:09,760 Speaker 1: They couldn't use Spider because that's the state street name. 131 00:07:09,920 --> 00:07:11,280 Speaker 1: So they said, you got to come up with a 132 00:07:11,320 --> 00:07:15,560 Speaker 1: different term so that there's no investor confusion. So the 133 00:07:15,680 --> 00:07:19,040 Speaker 1: first use of the name Exchange Traded Funds is in 134 00:07:19,200 --> 00:07:22,280 Speaker 1: the web perspectives because we had to create something different. 135 00:07:22,320 --> 00:07:25,160 Speaker 1: And so that's what's interesting is that the acronym and 136 00:07:25,240 --> 00:07:29,320 Speaker 1: the name wasn't really put out there until six years 137 00:07:29,400 --> 00:07:32,960 Speaker 1: after Bloom and most you know, actually filed for it. 138 00:07:34,200 --> 00:07:37,640 Speaker 1: WEBBS was important because it coined the term exchange traded 139 00:07:37,720 --> 00:07:42,000 Speaker 1: fund but it was also significant because WEBBS was driven 140 00:07:42,040 --> 00:07:46,920 Speaker 1: by client demand, not a says. Unlike Spy, which was 141 00:07:46,960 --> 00:07:53,640 Speaker 1: innovation driven, WEBBS was addressing specific demands. WEBBS was wells 142 00:07:53,640 --> 00:07:57,840 Speaker 1: far ago of Brian Stanley realizing that there was this 143 00:07:58,000 --> 00:08:01,800 Speaker 1: demand from a sophisticated insta cousinal trading market that wanted 144 00:08:01,840 --> 00:08:05,160 Speaker 1: exposure to international markets in a way that they couldn't 145 00:08:05,200 --> 00:08:07,120 Speaker 1: get access. And the way the reason they couldn't get 146 00:08:07,120 --> 00:08:10,480 Speaker 1: access was primarily a custody problem. Um, you know, back 147 00:08:10,480 --> 00:08:13,960 Speaker 1: in those days, if you wanted to trade uh, you know, Argentina, 148 00:08:14,120 --> 00:08:16,080 Speaker 1: which I think was one of the very first in 149 00:08:16,360 --> 00:08:18,920 Speaker 1: the first ones in the sleeve, you had to have 150 00:08:18,960 --> 00:08:21,360 Speaker 1: a local desk that knew how to trade Argentina. You 151 00:08:21,360 --> 00:08:23,040 Speaker 1: had to have a local bank that was going to 152 00:08:23,160 --> 00:08:26,440 Speaker 1: custody those assets. Maybe you know, Bank of New York 153 00:08:26,560 --> 00:08:31,000 Speaker 1: might have an affiliate relationship with somebody down there, but 154 00:08:31,080 --> 00:08:33,280 Speaker 1: it was it was a pain in the neck to 155 00:08:33,400 --> 00:08:37,760 Speaker 1: include Argentina in your international portfolio. And m c I 156 00:08:37,880 --> 00:08:40,040 Speaker 1: was really trying to build out where them Morgan Stanley 157 00:08:40,080 --> 00:08:43,080 Speaker 1: was really trying to build out their international chops, if 158 00:08:43,120 --> 00:08:46,120 Speaker 1: you will. And so what they did was solicit from 159 00:08:46,360 --> 00:08:49,400 Speaker 1: their biggest clients where do you want to trade? And 160 00:08:49,400 --> 00:08:51,240 Speaker 1: so you look at that list of the fifteen or 161 00:08:51,280 --> 00:08:57,120 Speaker 1: sixteen initial webs products, it's a bizarre list. Also, this structure, 162 00:08:57,679 --> 00:09:01,839 Speaker 1: although it followed the same rapper concept Spy didn't follow 163 00:09:01,920 --> 00:09:06,200 Speaker 1: the same unit investment trust or u I T structure. Well, 164 00:09:06,200 --> 00:09:09,360 Speaker 1: the u I T structure is extremely restrictive, right, and 165 00:09:09,880 --> 00:09:11,520 Speaker 1: for the SMP five hundred, and makes a ton of 166 00:09:11,559 --> 00:09:14,160 Speaker 1: sense because you're never gonna not own one of the 167 00:09:14,200 --> 00:09:16,720 Speaker 1: five d stocks in the SMP five hundred. They're all liquid. 168 00:09:17,120 --> 00:09:20,640 Speaker 1: Everybody obviously wants all that exposure. So instead, Webbs used 169 00:09:20,679 --> 00:09:24,280 Speaker 1: mutual funds because mutual funds were less limiting than a 170 00:09:24,400 --> 00:09:27,520 Speaker 1: u I T. When working with international markets, when you 171 00:09:27,600 --> 00:09:31,000 Speaker 1: talk about Argentina, it's a little bit different, and the 172 00:09:31,040 --> 00:09:34,920 Speaker 1: custody issues in some of those countries were in the 173 00:09:34,920 --> 00:09:39,120 Speaker 1: mid nineties still intractable. I mean, I literally remember a 174 00:09:39,559 --> 00:09:43,480 Speaker 1: phone call in the mid nineties with our custodian bank 175 00:09:43,520 --> 00:09:46,640 Speaker 1: in India at Wells Fargo, Nico, who was talking about 176 00:09:46,679 --> 00:09:48,360 Speaker 1: the fact that we had to dec a whole bunch 177 00:09:48,360 --> 00:09:50,960 Speaker 1: of trades because the courier got hit by a truck 178 00:09:51,400 --> 00:09:53,160 Speaker 1: and there and all of the trades were on a 179 00:09:53,200 --> 00:09:56,360 Speaker 1: paper in a knapsack going between the brokerage and the 180 00:09:56,400 --> 00:09:59,520 Speaker 1: custody shop. So like that's the kind of stuff we're 181 00:09:59,520 --> 00:10:02,720 Speaker 1: dealing with. Oh, in that environment, you had to have 182 00:10:03,000 --> 00:10:06,200 Speaker 1: some latitude again, not that you weren't managing an index fund. 183 00:10:06,200 --> 00:10:08,679 Speaker 1: You were managing an index fund. But um, I think 184 00:10:08,679 --> 00:10:11,200 Speaker 1: there's a misconception that managing an index fund means that 185 00:10:11,280 --> 00:10:14,720 Speaker 1: you own precisely everything, exactly when you're supposed to it exactly. 186 00:10:14,720 --> 00:10:17,719 Speaker 1: They're a price and that's just not true unless you're 187 00:10:17,720 --> 00:10:19,680 Speaker 1: a U I T, in which case you have to 188 00:10:19,720 --> 00:10:22,480 Speaker 1: do it that way. Bob Tole says, the managing director 189 00:10:22,480 --> 00:10:25,840 Speaker 1: at Morgan Stanley, didn't think et s would amount to anything, 190 00:10:26,080 --> 00:10:31,280 Speaker 1: so he was happy to unload them. Eventually, Barkley's Global 191 00:10:31,320 --> 00:10:34,800 Speaker 1: Investors bought webs from Morgan Stanley and it was a 192 00:10:34,920 --> 00:10:40,599 Speaker 1: steal a dollar if I remember correctly, a dollar. Yeah. 193 00:10:40,880 --> 00:10:43,320 Speaker 1: I had to have four phone calls with Bob Diamond, 194 00:10:43,320 --> 00:10:45,520 Speaker 1: who was the president of Barclays in London, who was 195 00:10:45,559 --> 00:10:48,080 Speaker 1: ex Morgan Stanley and a friend of mine. And he 196 00:10:48,160 --> 00:10:50,600 Speaker 1: calls me four times to say, you know, what are 197 00:10:50,600 --> 00:10:53,040 Speaker 1: they trying to do to me? You know, what's where's 198 00:10:53,080 --> 00:10:56,160 Speaker 1: the land mine? Right? And I'm going just by it, 199 00:10:56,520 --> 00:10:59,520 Speaker 1: I said, he goes. I said, what do you want 200 00:10:59,559 --> 00:11:01,680 Speaker 1: as bar plays? He said, we don't have a retail 201 00:11:01,720 --> 00:11:04,720 Speaker 1: footprint in the United States. The largest capital markets in 202 00:11:04,760 --> 00:11:09,880 Speaker 1: the world. And nobody knows Barclays from IOTA, right. B 203 00:11:10,080 --> 00:11:13,600 Speaker 1: g I is named at But if you asked a 204 00:11:13,640 --> 00:11:16,120 Speaker 1: person on the on the street who heck Barclays bank 205 00:11:16,320 --> 00:11:18,360 Speaker 1: was they they look at you like, I don't know. 206 00:11:19,320 --> 00:11:24,240 Speaker 1: So here was the golden opportunity for Barclays to develop 207 00:11:24,280 --> 00:11:28,240 Speaker 1: a retail brand in the United States for a dollar 208 00:11:28,840 --> 00:11:33,000 Speaker 1: and get paid for doing it. Webbs eventually became I 209 00:11:33,160 --> 00:11:37,120 Speaker 1: Shares after the Barclay's acquisition, and Noddix says, this is 210 00:11:37,120 --> 00:11:39,920 Speaker 1: when the brand really started to change. And one of 211 00:11:39,960 --> 00:11:42,319 Speaker 1: the consultants working in that process was a guy named 212 00:11:42,400 --> 00:11:44,680 Speaker 1: Lee crane Fis. He was a consultant as part of 213 00:11:44,679 --> 00:11:47,520 Speaker 1: that process, working with Patty Dunn, who would later become 214 00:11:47,600 --> 00:11:51,319 Speaker 1: the head of b G I. And you know, he, 215 00:11:51,440 --> 00:11:53,719 Speaker 1: I think recognized even more than me or any of 216 00:11:53,760 --> 00:11:55,880 Speaker 1: the people who were in the business at the time, 217 00:11:56,360 --> 00:12:00,240 Speaker 1: that these products were actually a solution not just for 218 00:12:00,240 --> 00:12:03,640 Speaker 1: those big institutions, uh, and not just for people who 219 00:12:03,679 --> 00:12:06,800 Speaker 1: needed to equitize cash, but but they were products that 220 00:12:06,840 --> 00:12:12,239 Speaker 1: could solve real long term asset allocation investment needs for clients. 221 00:12:12,320 --> 00:12:14,959 Speaker 1: And was really the guy who pushed for the rebranding 222 00:12:14,960 --> 00:12:18,320 Speaker 1: of those into what is inarguably a more retail brand, 223 00:12:18,440 --> 00:12:21,320 Speaker 1: I Shares. Tol says Lead craned, this was lucky to 224 00:12:21,320 --> 00:12:23,559 Speaker 1: be in the position he was in as I Shares 225 00:12:23,600 --> 00:12:26,679 Speaker 1: became more retail focused. But he wasn't the only reason 226 00:12:26,800 --> 00:12:29,240 Speaker 1: for its success. It was the money that the AMEX 227 00:12:29,400 --> 00:12:33,000 Speaker 1: kept telling him to spend. Right, and so what's Lead do? 228 00:12:33,240 --> 00:12:35,520 Speaker 1: He tries a couple of things. If you remember, at 229 00:12:35,559 --> 00:12:40,640 Speaker 1: one point every bus stop in Lower Manhattan from n 230 00:12:40,800 --> 00:12:44,360 Speaker 1: y U South had an EYE Shares sign on it, 231 00:12:44,559 --> 00:12:47,080 Speaker 1: and people kept saying, what does I Shares? Right? Then 232 00:12:47,120 --> 00:12:50,400 Speaker 1: they started sponsoring Circus sole events and then they so 233 00:12:50,480 --> 00:12:54,480 Speaker 1: they were targeting. In my opinion, League got the luck 234 00:12:54,480 --> 00:12:58,560 Speaker 1: of the draw. The real brains who I think deserves 235 00:12:58,600 --> 00:13:04,360 Speaker 1: tremendous amount of credit is Bruce Levine, Jim Polison, Craig Friedman. 236 00:13:04,480 --> 00:13:07,760 Speaker 1: All of those guys saw the vision of how to 237 00:13:07,920 --> 00:13:12,480 Speaker 1: convert basically an institutional money manager, which was the old 238 00:13:12,480 --> 00:13:18,079 Speaker 1: Wells Fargo Investment Advisors, into a retail brand name. Today, 239 00:13:18,400 --> 00:13:20,840 Speaker 1: I Shares, which is now owned by black Rock, is 240 00:13:20,880 --> 00:13:23,679 Speaker 1: the largest et F brand not exasts. When you step 241 00:13:23,760 --> 00:13:26,680 Speaker 1: back and think about it, Spy paid the way for 242 00:13:26,760 --> 00:13:29,320 Speaker 1: I shares. If Spy had come out and continued to 243 00:13:29,360 --> 00:13:31,720 Speaker 1: fail and not gotten any traction, I don't think there 244 00:13:31,760 --> 00:13:34,439 Speaker 1: would have been a lot of move to to push 245 00:13:34,440 --> 00:13:37,560 Speaker 1: webbs forward. Even so, it's a little bit of a 246 00:13:37,559 --> 00:13:40,600 Speaker 1: miracle to me that Webbs ever launched. It wasn't something 247 00:13:40,720 --> 00:13:43,400 Speaker 1: that I recall at the time. There was a tremendous 248 00:13:43,400 --> 00:13:46,960 Speaker 1: amount of management enthusiasm and excitement about it was seen 249 00:13:47,040 --> 00:13:48,959 Speaker 1: as sort of a bit of a flyer that we 250 00:13:48,960 --> 00:13:52,200 Speaker 1: were doing to service a bunch of very high end customers. 251 00:13:52,480 --> 00:13:54,679 Speaker 1: Not says it took a while for these products to 252 00:13:54,760 --> 00:13:57,600 Speaker 1: start catching on, but they did, and there was a 253 00:13:57,640 --> 00:14:00,679 Speaker 1: massive shift in how people started thinking about and it 254 00:14:00,720 --> 00:14:04,360 Speaker 1: wouldn't be, honestly, I think until the early two thousands 255 00:14:05,000 --> 00:14:09,120 Speaker 1: where most people started realizing, holy cats, these things really 256 00:14:09,360 --> 00:14:12,920 Speaker 1: can change how we think about investing. He says. The 257 00:14:12,960 --> 00:14:15,720 Speaker 1: same goes for him personally. He was on those original 258 00:14:15,720 --> 00:14:18,520 Speaker 1: marketing teams for I Shares, but it wasn't until he 259 00:14:18,559 --> 00:14:21,560 Speaker 1: actually used in e t F himself that he got it. 260 00:14:21,680 --> 00:14:24,160 Speaker 1: I was not one of those guys that recognized greatness 261 00:14:24,160 --> 00:14:26,120 Speaker 1: and jumped in. I'm not going to claim any of that. 262 00:14:26,440 --> 00:14:28,880 Speaker 1: It wasn't until I was sitting on a trading desk, 263 00:14:28,920 --> 00:14:30,640 Speaker 1: and all of a sudden, I could like hit a 264 00:14:30,680 --> 00:14:33,120 Speaker 1: button and get a million dollar exposure to the cues. 265 00:14:33,800 --> 00:14:40,280 Speaker 1: I was all in. Next time on Troyon's Presents, The 266 00:14:40,400 --> 00:14:43,640 Speaker 1: E t F keeps getting bigger and bigger and bigger. 267 00:14:43,840 --> 00:14:46,120 Speaker 1: It got to a billion dollars in three days. That's 268 00:14:46,120 --> 00:14:48,040 Speaker 1: a record. As you know. It's that I called the 269 00:14:48,120 --> 00:14:52,120 Speaker 1: Joe DiMaggio hitting Still the standing record easily, is it? 270 00:14:52,320 --> 00:14:56,640 Speaker 1: You know what number two is? Can you guess? Bnd? Yeah, 271 00:14:56,680 --> 00:14:59,600 Speaker 1: that's true nerd nerds him right there. Hardly anybody knows that. 272 00:15:00,720 --> 00:15:02,720 Speaker 1: Thanks for listening to The E t F Story Until 273 00:15:02,800 --> 00:15:05,040 Speaker 1: next time. You can find us on the Bloomberg Terminal, 274 00:15:05,320 --> 00:15:09,400 Speaker 1: Bloomberg dot com, Apple Podcasts, Spotify, and wherever else you 275 00:15:09,440 --> 00:15:11,640 Speaker 1: like to listen. The E t F Story is produced 276 00:15:11,680 --> 00:15:15,320 Speaker 1: by Jordan Bell, with some production help by Magnus Hendrickson. 277 00:15:15,480 --> 00:15:18,000 Speaker 1: Francesca Levy is the head of Bloomberg Podcasts.