Rajiv Silgardo led the development of Barclays Canadas family of exchange-traded funds (ETFs) and is now leading the development of BMO Financial Groups family of ETFs ( launched recently). In the following Q&A, he discusses why he left Barclays, why there is room for another ETF family in Canada, how BMO will avoid the fate of TD Bank, and where the growth areas are in ETFs.
Q. Can you give readers a bit of a background on yourself?
A. I have approximately 25 years of experience in asset management all of it in the realm of indexed and quantitative investing, including ETFs. I was with Barclays Global Investors Canada Limited for 14 years, joining them in their very early days to establish the investment side of the business. For the last four and a half years I served as President and CEO.
When BGI decided to move its investment management operations to San Francisco I elected to remain in Canada. I am extremely proud to be with BMO – the only bank that is taking a leadership role in Canada by offering ETFs to Canadian investors.
Q. Why another family of ETFs?
A. BMO has a long and strong tradition in providing investment solutions for all of the client segments that we serve we see BMO ETFs as another means of ensuring that our customers have access to an even broader range of solutions that meet their evolving investment and savings needs.
ETFs are consistent and resonate with BMO’s vision to make money make sense by providing products that are very transparent and simple to understand for the retail investor. At the same time ETFs can be the building blocks for comprehensive portfolio construction for sophisticated HNW and institutional customers .
Competition is good for the industry it will increase awareness and education regarding ETFs among clients and ultimately works to their benefit.
Q. How can BMO succeed in the ETF space in light of TD Banks experience a few years ago?
A. We will follow a two pronged strategy to ensure success:
Firstly, we intend to give investors comprehensive and efficient home-grown solutions for their ever evolving investment needs. With our four BMO ETFs that are already launched and the three more that are coming in July we are providing investors with a broad and robust initial offering. And we plan to add to these significantly in the coming months so that as investors need change we are always there for them. (TD only had four before it decided to pull back from market).
Secondly, BMO will put significant educational and sales support in ensuring that the marketplace and investors are fully aware of all the benefits that BMO ETFs bring to their portfolios. In this we will work to support investment advisors and end-clients alike.
Q. Where are the growth areas in the ETF industry?
A. ETFs are experiencing broad based growth across asset classes and across geographies.
World wide the growth has been incredible with assets increasing by 65% over the last three years.
In Canada, the growth was 8% in 2008 to over $19B, which is remarkable given that the majority of market indexes plummeted more than 30% and ETF AUM was up $7.3B compared to net redemptions of $10.5B for mutual funds.
This is a market that is forecasted to grow to $105B by 2016 in Canada and a product that our clients have expressed a need and desire for.