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Scaling up the business is the focus for ETF provider Reality Shares’ new exec VP Dochterman

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Reality Shares has added to its team with the appointment of Bob Dochterman as an Executive Vice President. Dochterman will help lead the firm’s commercial operations and work closely with Ryan Ballantyne, Executive VP of Sales and Trading, whilst reporting to CEO Eric Ervin. 

Dochterman (pictured) has more than 25 years’ experience in marketing, sales, distribution and business development. Previously roles include spending more than a decade at Hotchkis and Wiley Capital Management, where he was Chief Marketing Officer, as well as serving as a Managing Director and Western Division Sales Manager for Merrill Lynch Investment Managers.

“Whilst I was at Hotchkis and Wiley Capital Management the business grew from USD4billion to roughly USD37billion, and mutual fund growth from USD150million to well over USD10billion. After that I did some independent consulting for several boutique money management firms and it was during that time that I was fortunate to be introduced to Eric,” says Dochterman, who continues:

“In a nutshell, my remit at Reality Shares is to scale up the business as quickly as possible. That involves identifying the key markets for Reality Shares and developing an investment message that will allow us to reach that scale as quickly as possible. I will be developing a strategic focus on distribution and marketing to allow us to attract as many investors as possible to follow Reality Shares with their investment dollars.”

Reality Shares currently offers a first-of-kind ETF (NYSE Arca: DIVY) designed to isolate corporate dividend growth from stock price volatility. The ETF launched in December 2014 and as Dochterman points out, the house philosophy at Reality Shares is to bring innovative new products to market as opposed to just another version of an index that somebody has created. 

“DIVY is a fantastic strategy for many investors including institutional investors, which is I feel a segment of the US investor market that is under-represented in the ETF space, in particular endowments, multi family offices, even traditional pension plans, as they start rotating out of fixed income,” says Dochterman. 

Indeed, there are two potential drivers at work that could push investors towards alternative ETF strategies like DIVY. With respect to equities, Dochterman says that many investors are frustrated by market volatility that “seems to sneak up on them on a regular basis, and which can cause a fair degree of anxiety”. 

Offering something that delivers an attractive return with lower volatility is going to appeal to a large segment of the market, if one extends the argument. 

“Secondly, you’ve got the income investor side of the market. Most are in agreement that interest rates are going to trend upwards and as a consequence there is a tremendous pool of assets that will rotate, to some extent, out of fixed income. Where are they are going to go? 

“If we can offer strategies to bond investors that can reduce the volatility of their portfolio, and provide a decent stable (bond-like) return, that will be attractive. Bond investors can’t just wait until rates go up. The animals are already out of the barn at that point so I think you will start to see investors rotating out of fixed income sooner rather than later,” comments Dochterman.

Getting any new fund product to market, especially in the highly competitive ETF sector, is a challenge. Currently, Reality Shares is preparing to launch three additional strategies for income investors, each of which will be a twist on dividend paying stocks in DIVY. 

Talking about the challenges of getting any new ETF product noticed, Dochterman says: “It’s about presenting a value proposition to a specific audience in a consistent, repeatable fashion. We have to identify the specific audience that our message and our strategy will resonate with, and importantly provide a solution to. If we do that, we will succeed. It is a very cluttered market and unless you break through that clutter with a clear solution, you will get lost. That’s the challenge we have to overcome and that’s what excites me.” 

Dochterman adds in conclusion: “The ETF industry is still in the early innings of an exciting future. There are a lot of exciting managers entering the market and I think we’ll continue to see substantial growth. For me personally, I’m hoping to ride that wave of growth at Reality Shares. The differentiated products that we will be offering should put us in a good position to participate in that growth in a big way.

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