Jim Ross, the executive vice president of State Street Global Advisors and chairman of global SPDRs. He also serves as chairman of the board of SSGA Funds Management, and as chairman and chief executive officer of State Street Global Advisors Funds Distributors. Last year, he won the ETF Lifetime Achievement Award. He has probably forgotten more about market structure and Exchange Traded Funds then most of us will ever know.
He started his career in public accounting; he joined a new group called fund administration. Ross found that the new group he joined was not using all of his 9-5 time. With a light schedule, he went to one of his bosses, and asked for more work to do. Two months into his career at State Street, he got invited in to apply his accounting skills to this new project — the launch of a product which would trade under the symbol SPY. 25 years later, he has become known as “the father of the Spyders.”
SPY is the most liquid traded asset in the world. It trades about $15 to $20 billion dollars a day — more than the next 20 ETFs combined.
The American Stock Exchange had approached State Street about their idea for an index trading vehicle post-1987 crash. Ross explains how State Street helped developed a securitized version of S&P500 Index ETF. It eventually became the biggest exchange-traded funds. The original version of the ETF was structured as a UIT, not an ETF. Ross discusses many of the ETFs that State Street offers that are variations of have of the S&P. Shortly after our conversation, State Street launched a suite of “Ultra-Low-Cost” SPDR Portfolio ETFs.
He also discusses the origin of the Spyders Gold Trust (GLD), which in 2011 was briefly bigger than SPY. There is a fascinating backstory as to how the World Gold Council took excess gold reserves and turned it into an investable, marketable product.
We also chatted about impact/ESG, including such funds as Low Carbon (LOWC), Fossil Fuel Reserves Free (SPYX), Emerging Markets Fossil Fuel Reserves Free (EEMX), Gender Diversity (SHE), and others.
You can stream/download the full conversation, including the podcast extras, on Bloomberg, iTunes, Overcast, and Soundcloud. Our earlier podcasts can all be found on iTunes, Soundcloud, Overcast and Bloomberg.
Next week, we speak with Professor Scott Galloway of NYU Stern School of Business and author of The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google.