In the ETF industry, Deborah Fuhr is one of the greats. As founder and managing partner of ETFGI (“GI” stands for “Global Insight”), Fuhr is one of the world’s foremost ETF experts. Since 1997, she has delivered in-depth, comprehensive research into all things ETF, and her insights are highly sought out by fund issuers, investors, institutions and asset managers alike.
For more than 20 years, Fuhr has thrown herself head-first into the ETF industry, chasing innovation and pushing boundaries. As Morgan Stanley’s head of research and product development in the late ’90s, she worked on the OPALS (Optimised Portfolios As Listed Securities). The OPALS was Morgan Stanley’s single-country index vehicle that launched contemporary with State Street’s early ETFs, and they inspired the World Equity Benchmark Series (WEBS), which later became the first iShares ETFs.
In 2011, Fuhr left a high-visibility position at BlackRock to found her own research consultancy, where she has been ever since. When she’s not amassing and analyzing data on the global ETP market, she’s also advocating on behalf of greater gender diversity in the industry via Women in ETFs, the mentorship and networking organization she helped found.
Recently, ETF.com chatted with Fuhr to get introspective about her career’s twists and turns, how the industry has evolved and what her future holds next.
You’ve been tracking and researching ETFs since 1997, back when these vehicles were just these weird, little institutional instruments everyone was still trying to figure out. How did you come to work in the ETF industry?
My first job at university was working for [Charles Ellis], the founder of Greenwich Associates. He wrote a paper called “The Loser’s Game,” which was one of the first studies of the performance of [active] funds against the S&P 500. (It showed what SPIVA now shows every six months.) He did not believe—and to this day doesn’t believe—that active managers can consistently deliver alpha over index funds.
When I went to get my MBA at Kellogg [at Northwestern University], I decided I wanted to go into the financial industry after I graduated. I’d always wanted to work at one of the big investment banks, and I’d always wanted to work overseas. So I found a way to do both and move to London [by getting hired at Morgan Stanley].
The initial job opening was for the marketing department of the equity division. A month later, I was put forward as the director of marketing for OPALS [and ETFs]. I was really lucky in some ways. But it was also challenging, because here I am, starting a new job, and I have no idea what these OPALS and ETFs are, and I’m supposed to be doing sales, marketing, the whole nine yards.
It was really getting thrown in at the deep end, but also a great opportunity—and just a lot of fun.
In those early days, did you have any sense that ETFs or ETF-like structures would take off as they later did?
When I first started researching ETFs, my boss told me, “I want you to pick 50 ETFs, and from now on, those are the only ones you’re going to cover.” I pushed back on that and said, “I just don’t think that’s going to be possible.” Because new funds were always going to launch, and we had to cover them for our clients. Had I lost that fight or listened to him, I think my career would have ended up very different than it is today!
I think I did see how ETFs were unique: They were the only financial product where you could offer the same toolbox to hedge funds, pensions, asset managers, financial advisors and retail—with the same annual cost and same minimum investment size. It was a really compelling proposition, from my point of view.
Over the years, it’s been rewarding to feel like I’ve had a hand in a lot of what’s happened, especially outside the U.S. And I think you can see how [the ETF] is a product that resonates with so many investors.
In 2011, you left BlackRock, one of the world’s largest ETF companies, to found a startup research consultancy, ETFGI. Why?
Well, I’d really wanted to go back and work at a sell-side firm. At least, that’s what I thought I wanted to do. A firm had made me an offer to join as the global head of delta-one strategy, and I accepted that and resigned from BlackRock. Then, two weeks later, the firm was reorganized.
Also, I discovered that they weren’t going to let me speak to the press. And that sent real alarm bells through my head. How do you gain thought leadership and get the message out there, if you can’t answer questions when the press wants to know what’s happening with a certain type of ETF, or so on?
So I thought long and hard about what really made sense and decided to put together the business plan for this company. It wasn’t a totally direct path, but it was the right path. The rest is history.