ETFs Drive Diversification Across Public, Private, and Digital Markets

Key Quotes

"I'm not sure I had a plan I studied economics at school and then at university and I was always I was always intrigued by this kind of concept of the markets I didn't have any background no family background in in markets or investing but I always found reading up about markets interesting and what kind of got me in it was a slight fluke we were talking about flukes before the show one of my neighbors was a telecoms engineer and he used to go round to all the banks installing the dealer boards like various atms automatic tele machines we call them here dealer boards the phone phone systems that you used on the trading floors you know the company with all the with all the hoot and holler and all that kind of stuff."

Stephen Cohen explains that his entry into the financial markets was not a direct plan but rather a result of serendipity and curiosity. He describes how an interest in economics and markets, combined with an intriguing experience on a trading floor, led him to pursue a career in investment strategy.

"So I worked I originally started in fixed income and then and then went into convertibles bonds and a lot of what I spent my time doing was kind of more market strategist type of roles so talking to clients about what was going on in the markets what was going on in the bond markets trade you know developing trade ideas for clients and that's also how I got involved in spending quite a lot of time on the Japanese markets which I found you know incredibly interesting and really got to understand kind of the Japanese culture and and the way the country operated."

Stephen Cohen details his early career experiences in fixed income and convertible bonds, highlighting his role as a market strategist. He emphasizes how this work involved client interaction, market analysis, and the development of trading ideas, which also led to a deep engagement with the Japanese markets and culture.

"It feels incredibly different I think for Japan it's completely different you know if you go back to as you say the late 90s early 2000s you know the banking crisis that was part of the bubble and the collapse had still not been solved and the collapse had still not been solved and it was only really in the early early to mid 2000s that they finally kind of got their arms around the banking system and one thing you read about history and unless you can get the banking system operating properly and lending you really struggle to get an economy going."

Stephen Cohen contrasts the Japanese economy and markets of the late 1990s and early 2000s with the present day. He points out that the banking system's issues from the bubble and collapse were a significant drag on the economy, and it was only after addressing these that recovery became possible.

"So I had an opportunity you know having had a lot of great experiences in 2011 BlackRock was probably 18 months into the integration of the ishares business or the indexing business and really focused on how do we expand this business particularly how do we expand ishares this you know this etf business and back in 2011 Europe European etfs were still a very nascent industry you know now it's like a two and a half trillion dollar industry I European ishares is over a trillion dollars back then it was very much still the very early days and you could see what was what was happening in the states."

Stephen Cohen explains his transition to BlackRock in 2011, noting the firm's strategic focus on expanding the iShares ETF business, particularly in Europe. He highlights that the European ETF market was nascent at the time, contrasting it with its significant growth in the US and its current scale.

"Honestly it was talking to the people at ishares it was having kind of been introduced to them and having been approached to to go and talk to them it was I learned a lot from just sitting down and understanding this I'd sat in banks we traded etfs they were to be honest a very very small component of what we of what we did it was only really when I spoke to the people at ishares and BlackRock and understood the history of how ishares had grown and where it was then and the that sense of mission that sense of kind of the purpose of giving more access to investing to people you know and creating more transparency that they had lived as they grown the US business and they were growing the European business and that kind of just captured you."

Stephen Cohen attributes his realization of iShares' future potential to conversations with the people at iShares and BlackRock. He explains that understanding their mission of increasing investment access and transparency, coupled with the company's growth trajectory, was a key factor in recognizing the opportunity.

"I think we're seeing AI in probably three areas the first one is obviously AI as an investment theme which is very well publicized etc and we're seeing that through things like data centers obviously stocks credit etc the second one is AI in terms of investment strategy for example BlackRock were very fortunate to have a systematic group investment group that has a 40 year track record and history of delivering really great performance and you know they would argue they were doing AI well before it was called AI when it was called machine learning or whatever it was called before that it's been around a while."

Stephen Cohen outlines three primary areas where Artificial Intelligence (AI) is impacting the investment industry. He identifies AI as an investment theme, its application in investment strategy through systematic groups with long track records, and its role in product development.