Patrick Mattar was an early convert to the advantages of ETFs and will be joining the first panel at etfLIVE in May 2020. Mattar started his career at Standard Life Investments as an active manager and first heard of passive investing in the late 1990s when a team he was working with lost money to a passive fund.
“My interest in ETFs came from the challenge that was being thrown down to active management by passive vehicles,” he says. In year 2000, when he was at Merrill Lynch, he had the whole ETF concept explained to him when the bank launched the LDRs range. At that time, he was on the equity derivatives’ sales team and his boss sent him off to find out more about ETFs, ahead of their European launch.
“I was one of the very first people to look at them in Europe and have loved them ever since,” he says. He started marketing ETFs but then went back to equity derivatives for nine years until the opportunity to go back to ETFs arose at iShares in 2010. “I jumped at the opportunity as I have always had a deep belief in the benefits they can provide both the industry and individual investors,” he says.
A key benefit is an efficient and live connection with loads of equity and bond price movements, delivered in simple, single share price that can be traded either with a very small or very large notional amount of money. This unification across investor types focuses liquidity, meaning all buyers and sellers can benefit, Mattar says.
“The ensuing experience puts investors in control in a very modern way. The faith investors have in ETFs has, in turn, led to huge increases in fund choices, as well as cost reductions.”
At iShares, Mattar worked in the UK institutional sales team and then in capital markets with a variety of responsibilities and roles which culminated in him leading the European Capital Markets team.
“Ultimately, for ETFs to work as well as they do, there are a range of entities, a whole eco-system, that combine to achieve one goal: efficiency. ETF issuers are never at the point of execution for end investors, so collective responsibility is at the heart of the industry. Happy buyers are returning buyers, and that benefits all ETF-related companies, as well as raising the value of the broad financial services brand.”
Mattar believes ETFs benefit financial services in general because they are a reliable focus of liquidity, make investment simpler and are opening financial markets to a broader, more discerning set of investors.
“Price transparency improves the user experience of participating in capital markets,” he says, also the fee structure is totally explicit, and there is a very healthy competition amongst index and ETF providers.”
Mattar believes that anything that attracts people into interacting with the world’s capital markets is a good thing for society. “The more people feel they can participate, that their money means something, that their voice is listened to, the better the role capital markets can play in society.”
Having been central to several successful initiatives in his time at BlackRock (including raising around USD1 billion in seed for over 150 fund launches, designing the methodology and running the campaign that saw over USD35 billion in switches from futures positions to ETFs, and catalysing the adoption of Fixed Income ETFs by both end investors and bank trading teams) Mattar has worked with Aberdeen Standard Investments from the summer of 2019 as an ETF consultant. The firm has a range of commodity ETFs through its purchase of ETF Securities’ US business.
“ETFs are now an elemental part of the investment industry and all asset managers should define their relationship with that element. I am lucky in that I have experienced, first hand, ETF AUM growth and innovation for over 20 years. I can’t help but be motivated and inspired by their indefatigable evolution, and its huge fun to be part of it.” Mattar says.
“Aberdeen Standard has a successful range of commodity ETFs, but nothing, as yet, in Fixed Income, Equities, Real Estate and Multi-Asset ETFs. The talent, energy and asset class insights of the ASI teams is as good as any I have worked with and, even in my relatively short time knowing them, the post-merger momentum is obvious. That is all I can say, at present.”