Exactly 31 years ago today, the stock market fell 23 percent, the worst day ever for stocks two times over. It was in the aftermath of that crash that the idea for exchange-traded funds was born. And it came from a very unlikely place: the U.S. Securities and Exchange Commission. 

Exactly 31 years ago today, the stock market fell 23 percent, the worst day ever for stocks two times over. It was in the aftermath of that crash that the idea for exchange-traded funds was born. And it came from a very unlikely place: the U.S. Securities and Exchange Commission.

The creation story of the first exchange-traded fund is actually the best way to understand how they work. And it's not just educational, it's entertaining. Like the PC and the MP3, the story of the creation of SPY -- which turned 30 this year -- is full of characters, twists and turns, and subplots. In the end, the product launched an industry that's reshaping not just investing but the entire financial ecosystem. This six-episode miniseries will weave together interviews with the founding fathers and other key players that help investors better understand the ETF and how we got here.

A six-episode miniseries weaving together interviews with the founding fathers and other key players that help investors better understand the ETF and how we got here.

The ETF Story

The Crash

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/409437e2-8738-42ea-85a1-ae3c00049cab/transcript

SPY wasn’t just a hit product, it was an inspiration for an entire industry to take off. But it didn’t happen overnight. It took about 10 years for the ETF structure to be utilized for other asset classes and strategies, which today seem normal but at the time were revolutionary.

On this installment we look at many of the game changing products that followed, including the first bond ETF, the first gold ETF, Vanguard’s entry and the rise of smart-beta, which was active management’s way to get into the action. 

SPY wasn’t just a hit product, it was an inspiration for an entire industry to take off. But it didn’t happen overnight. It took about 10 years for the ETF structure to be utilized for other asset classes and strategies, which today seem normal but at the time were revolutionary.On this installment we look at many of the game changing products that followed, including the first bond ETF, the first gold ETF, Vanguard’s entry and the rise of smart-beta, which was active management’s way to get into the action.

The Revolution

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/89977aa2-751d-4652-b0c5-ae3c00038c36/transcript

SPDR S&P 500, or SPY, is the world’s largest ETF today with about $240 billion in assets, but it wasn’t much to look at when it debuted in 1993. Some days it was on “volume life support,” trading as little as 18,000 shares; there was even talk of pulling the plug. Yet true believers, guerrilla marketing, and a booming 1990s stock market helped the product gain favor. And once SPY took off, the markets were forever changed. This episode also explores how SPY soon inspired a host of other ETFs, from international and sectors to fixed income and gold.

SPDR S&amp;P 500, or SPY, is the world’s largest ETF today with about $240 billion in assets, but it wasn’t much to look at when it debuted in 1993. Some days it was on “volume life support,” trading as little as 18,000 shares; there was even talk of pulling the plug. Yet true believers, guerrilla marketing, and a booming 1990s stock market helped the product gain favor. And once SPY took off, the markets were forever changed. This episode also explores how SPY soon inspired a host of other ETFs, from international and sectors to fixed income and gold.

The Sleeper

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/42aa43cb-46b6-44e3-afab-ae3c00038c34/transcript

Just as Steve Jobs and Steve Wozniak weren’t the only two geeks in a garage working on a computer in the 1970s, the AMEX wasn’t the only exchange looking to get a market basket instrument listed. The late 1980s saw multiple attempts to create something like an ETF, including SuperShares, Equity Index Participation Shares, Cash Index Participation Shares and the Toronto 35 Index Participation Units. 

Ultimately, SPY gets – and deserves – the lion’s share of the credit as the first ETF. But by no means was AMEX alone in the race; they were just the winners. This episode looks at the race, the players involved and why their products became historical footnotes. 

Just as Steve Jobs and Steve Wozniak weren’t the only two geeks in a garage working on a computer in the 1970s, the AMEX wasn’t the only exchange looking to get a market basket instrument listed. The late 1980s saw multiple attempts to create something like an ETF, including SuperShares, Equity Index Participation Shares, Cash Index Participation Shares and the Toronto 35 Index Participation Units. 
Ultimately, SPY gets – and deserves – the lion’s share of the credit as the first ETF. But by no means was AMEX alone in the race; they were just the winners. This episode looks at the race, the players involved and why their products became historical footnotes.

The Competition

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/4608bf7c-e14e-42fd-aa06-ae3c000336ef/transcript

The Crash

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