Co-founder, CEO, Innovator Capital Management
If stocks, mutual funds and exchange-traded funds can be viewed as a ladder where the investment’s complexity increases with each step, then Bruce Bond may be thought of as a creator and popularizer of products at the ladder’s highest level.
But Bond looks past the seeming complexity of the smart-beta, active and defined-outcome ETFs he has created. “I always try to focus on what a product actually accomplishes and what investors might want, which is really very simple,” Bond said.
For his new defined-outcome ETFs, the easy-to-understand deliverable is the ability to participate in an underlying asset’s upside while also enjoying a level of protection on the downside. The complicated part, at least for most non-professionals, is what goes on under the hood, which includes options trading.
“Advisers are already familiar with the concept of buffering from structured products. By using options strategies in an ETF, we can eliminate tax and other problems and deliver the same payoff in a better package. And advisers get that,” Bond said.
As the co-founder, with John Southard, of PowerShares Capital Management in 2003, Bond figured that advisers and their clients would like to invest in companies based on themes or values, not just size. That led to the creation of several firsts: smart-beta ETFs, active ETFs, an ETF of ETFs and non-gold commodities ETFs.
Bond and Southard sold PowerShares to Invesco in 2006 and when their non-compete ended in 2018, started a new ETF business, Innovator — an apt description for Bond himself.
— Evan Cooper