Wall Street Diversifies Itself

Exchange-traded funds are challenging the status quo in investment management—including who’s in charge.

- Bethany Mclean

WALL STREET IS an unlikely vanguard against corporate America’s diversity problem. The white shoes of investment management are still worn almost exclusively by white men. So it’s notable that the surging business of exchange-traded funds, or ETFs— investment funds that generally track an index like the S&P 500 and are traded on exchanges like stocks— looks a little different.

The demographics of this slice of the financial-services industry haven’t yet been studied. But I recently spoke with roughly a dozen women and people of color working in ETFs who say that they see more diversity in their business than elsewhere in finance— and the anecdotal evidence is convincing. While Mc Kinsey reports that women represent only about 20 percent of senior vice presidents and vice presidents in asset management and institutional investment, Laura Morrison, the head of exchange- traded products at Bats Global Markets, says that women make up half of the team that works to get funds listed on Bats’s exchanges around the world. At iShares, the largest provider of ETFs in the world, which was acquired by the financial giant BlackRock in 2009, seven out of the 14 members of the global executive committee are women. A group called Women in ETFs, started three years ago by five prominent female executives, now counts more than 2,000 members.

Reggie Browne, the head of ETF trading at Cantor Fitzgerald—whom Forbes in 2012 dubbed the “Godfather of ETFs,” and who is himself African American— says that at least one woman or person of color holds a senior position at every ETF company or unit he knows of. Ben Johnson, who analyzes ETFs for Morningstar, says that compared with the rest of the investment- management field, the workforce “is somewhat more diverse.”