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Mary Hagerman, Raymond James

Canadian ETF pioneer celebrates ESG growth in the ETF space


It was the global financial crisis of 2008 and the following year of difficult returns that brought Mary Hagerman (pictured), portfolio manager and investment adviser with Raymond James Ltd in Montreal, Canada, to ETFs. She is now considered a pioneer in creating ETF-based discretionary portfolios.

“Following the 2008 to 2009 financial crisis, I had a real moment of deep introspection to evaluate what had gone wrong in the global financial system,” she says. “How products we used for clients had reacted during the 14 months of almost consistent declining markets and I came to the conclusion that, in the great majority of cases, managed money had not done its job.”

At the time she was using some ETFs and hearing more about them. “But as I gained access to financial statistics from the crisis, it became clear to me that keeping my clients invested during that period had been critical to their overall portfolio health and that having exposure to a broad-based index had done as well, if not better, than the mutual fund solutions that I and others were using at the time.”

Hagerman decided that she would move forward with building ETF portfolios for her clients and since then has been committed to an ongoing education mission on the benefits of using ETFs.

Her business subsequently transitioned to fee-based and she offers discretionary portfolio models based primarily on ETFs.

Raymond James was founded in the US in 1962 and they have become the largest independent wealth advisery firm in North America, having arrived in Canada just over 20 years ago. The firm’s investment advisers manage almost CAD60 billion in Canada and USD1 trillion worldwide.

“What drew me to Raymond James is that they are independent so solely concentrated on their advisory services, with 8,200 financial advisers around the world and close to 500 in Canada. They provide us with what we need to serve our clients and are independent in their approach so we are not required to sell any Raymond James products; as an ETFs portfolio manager, I like to have a totally independent approach to clients.”

Hagerman’s clients typically have portfolios of over CAD500,000, with an average of CAD1 million plus in family assets.

“I focus on the family approach so it’s not just one client but the family individuals I like to help.”

Her core portfolios are broad-based vanilla ETFs with satellite positions.  “I am really excited about the growth in ESG (ethical, social governance) ETF products,” she says.

“We can see that ESG investing really came to the fore during the pandemic for all of the reasons we could imagine and will continue to be very strong. It’s not a passing trend. ESG filters that are duly applied to passive indices are going to stay and will become increasingly popular as we get access to statistics that show that these products do well and possibly even better than an index without ESG filters.”

Hagerman reports that clients are curious to know what is happening in the markets within the ESG space, in developments such as electric vehicles like Tesla.

“Certainly, my clients’ children are very interested in what is accessible for them in the ESG space. It’s clear that this new generation of young investors is very interested in having their investments aligned with their philosophies and concerns about the environment.”

What excited Hagerman about putting together her ETF based portfolios was how democratic ETFs make the investment world.

“An individual can invest in the same way as an institutional investor and as we go forward, we see this more and more,” she says. “I am really curious to see what will become of fixed income in the ETF space as ETFs have shone a real light into the dark world of fixed income which couldn’t be transacted openly, as it’s an over-the-counter market. I think we will see some exciting product development in fixed income thanks to transparency that ETFs have brought to fixed income.”

Mary Hagerman will be speaking on ESG and Emerging Markets at the etfLIVE Spotlight Series. For more information and to register, please follow this link

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