This week, we speak with Robin Wigglesworth, the global finance correspondent for the Financial Times. He is the author of the just-published “Trillions: How a Band of Wall Street Renegades Invented the Index Fund and Changed Finance Forever.” The book is filled with all sorts of unexpected surprises about the business’s history.
He explains how indexing began as an academic thesis but became a convenient way for Jack Bogle to escape his noncompete with Wellington which prevented him from running a “managed” fund. Since index funds are technically unmanaged, he was able to launch the Vanguard All Market fund without running afoul of that contract.
We discuss why indexing was initially not a great business, and how the first mover State Street let their advantage fade; how DFA turned academic research of “Factors” into a new form of indexing, and how BGI “blitzscaled” their ETF business.
He also explains why Blackrock’s purchase of BGI from Barclay’s for $15 billion — including all of the iShares ETFs — was the greatest acquisition in all of finance. Blackrock now manages about $9.5 trillion dollars.
You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.
Be sure to check out our Masters in Business next week with Edwin Conway, Global Head of BlackRock Alternative Investors (BAI), which runs over $300 billion in total assets. BlackRock’s global alternatives business includes Real Estate, Infrastructure, Hedge Funds, Private Equity, and Credit.
Robin Wigglesworth’s Book
Robin Wigglesworth Current Reading
Emperor of All Maladies: A Biography of Cancer by Siddhartha Mukherjee
The World For Sale: Money, Power, and the Traders Who Barter the Earth’s Resources by Javier Blas and Jack Farchy