Episode Transcript
Carole Okigbo :The bad news is that market volatility is not inevitable. It's kind of like death or taxes. It's going to happen. But the good news is that investor panic does not have to be. And so one of the key tenants in our core messaging is don't panic.
Dana Moody : Welcome to FTSE Russell convenes. I'm Dana Moody. And in this session we're talking about ETF trends in the wake of market volatility. Today I'm joined by Carole Okigbo Vanguard's Global Head of ETF capital markets and index and broker relations. And just to set the stage for today's discussion, as I alluded to, we'll be talking about trends in the ETF market.
But before we dive into that actually want to touch on a key milestone that's taking place at Vanguard this year. So Carole, this year marks the 50th anniversary of Vanguard. Well one congratulations.
Carole Okigbo : Thank you.
Dana Moody : So I'm sure you and Vanguard, you're taking a look back over the last 50 years outlining some of those key achievements, milestones, but also the impact Vanguard has had on investors. But financial markets more broadly, what some of those key achievements or milestones that stand out to you.
Carole Okigbo : Thanks, Dana. First of all, thank you for having me. It's such a pleasure to to be here and discuss ETFs, in broader Vanguard with you. So thank you very much. So interestingly, I think the old adage of it's not about the destination, it's about the journey feels really apt. When I think about Vanguard Journey, and it really is one that is focused on innovation but really grounded in purpose.
And you see that in our history starting from our start in 1976 with the first index mutual fund. You know, it was the first democratization of access. And you see the proliferation of it all across the globe, which is quite exciting. And then secondly, your foray into ETFs, which happened in 2001. ETFs, as you know, have now become the cornerstone of modern portfolio construction.
The again, the democratization of this to not just institutional investors but to the retail space really speaks to Vanguard's ethos. Personally, I'd say I'm really proud of our ability to provide, market structure, liquidity and transparency in this vehicle. And it's just been a really successful story to date. But looking back, I would say the most meaningful achievement for Vanguard is really our unwavering commitment to our clients.
To me, I think it's foundational in or corporate structure. Right. So the clients own the funds, the funds on Vanguard, it means that we're unwavering and we're not focused on short term. And really, really focus on long term enduring impacts to our clients. And honestly, that feels like a history worth celebrating.
Dana Moody : So you outlined some of Vanguard's key achievements over the last 50 years. So I'm curious to hear how Vanguard is making forward leaning investments to the future to sustain the firm's market leading position. So what are some of those focus areas where Vanguard is allocating resources moving forward?
Carole Okigbo : I would say, for the next 50 years or ethos will not change. We will continue to innovate. But with a purpose. And there are three main areas that we're focusing on. The first is technology. We've made significant investments in the last couple of years to really modernize our technology and move from, native to more cloud native, infrastructure.
And we think that this will increase client experience, lead to operational efficiencies, and really, help us achieve that global scale. Secondly, we continue to innovate in the product space. And this is as a result of evolving client preferences. Since the end of 2023, we've launched 12 fixed income products. And some of them have been interactive space, to kind of showcase our active managers best thinking.
And I think you can expect to continue to see more innovation from us in that space. Lastly, we continue to innovate in the private space. This isn't completely new to us because we have, a partnership with Harper West since 2020 where we provide, private equity solutions to qualified investors who are looking for that increased diversification and increased returns.
Most recently, we announced a partnership with, Blackstone and Wellington, who, you know, we know quite well. And we're really excited about this opportunity. As you know, the private space is one that, is becoming increasingly important to the client base. We find that private companies are staying private longer. Either as a result, structural or secular, considerations.
And therefore, that ability to provide access to this market, to the retail space and further democratize it is something that is of, increased interest to, to, to Vanguard. And so, you know, I would say by and large, you know, it's all part of the same story that I spoke about earlier, that focus on innovation. Absolutely.
But always, always, always with a purpose.
Dana Moody : So it sounds like Vanguard is making those key investments to advance the firm's mission or continue to advance the firm's mission. As you alluded to, in terms of technology, but also product development and private assets, but also ETF. So let's dig a little deeper on ETFs. So Vanguard's mission is to take a stand for all investors to give them the best chance at investment success.
And I believe this is evidenced in Vanguard's ETF offering. However, in the wake of market volatility that we've experienced this year, how has Vanguard approach client engagements to educate them on how to best position their portfolios and make a resilient to whether any storm, if you will?
Carole Okigbo :That's a really great question. So I would say that the bad news is that market volatility is not inevitable. It's kind of like death or taxes. It's going to happen. But the good news is that investor panic does not have to be. And so one of the key tenants in our core messaging is don't panic. Stick to your long term, goals and remain disciplined.
Thankfully, that message seems to be resonating with our client base when we look at the data. At looking at the most recent volatility compared to other times, investor behavior hasn't significantly changed, which is great. The second key message we try to, give to our clients is actually to take advantage of market volatility. And ETFs can be a great source of use for that.
So when there's a bit of dislocation in the market and prices have come down, it's a great opportunity to rebalance and maintain your long term asset allocation. And given the resilience, the efficiency tax structure and liquidity that ETFs provide, we find that that is a great avenue to be able to execute on those strategies.
Dana Moody : Thank you Carole. So it sounds like Vanguard is going to continue to educate investors on ETFs. And I'm sure that's going to lead to further adoption in the space. But we're out of time. But I want to thank you again for, joining us today. I'm sure our listeners gain a lot of insights on ETF markets. More importantly, what are those four leading investments Vanguard is making to sustain its position as a market leader?
So thank you again.
Carole Okigbo : Thank you for having me, Dana.
