This year marked the anniversary of the index on which the first exchange traded fund (ETF) was based: the S&P 500. In March 1957, the index that would become the most widely used U.S.-linked index was born and Standard & Poor’s has been celebrating all year long. Part of the party was in New York, where they rang the closing bell in March.
David Blitzer, Standard & Poor’s chief investment strategist, says that while he knew the index was no doubt valuable, he didn’t realize just how much of an impact it truly had until he began putting together a book about its first fifty years. A slew of contributors quickly signed on to lend their voices to the project, including such thought leaders as John Bogle and Jeremy Siegel.
"Consistently, as we went through, this history of the index was the history of everything we knew. I knew the index was pretty significant. It was present in the creation of anything significant," Blitzer said.
His favorite discovery? Learning that it was the first index to have its calculations done by computer during the trading day. "It was not quite real time. It took about an hour. But it was the first time anyone had set up an index and tried to calculate it during the day."
In 1993, the SPDRs (SPY) were launched — no doubt a nod to the S&P 500 as a major, important player in the world of indexes.
In 1995, Blitzer was appointed to be the chairman of the committee that decides which stocks are added or bumped from the index. As he settled into the role, he asked his predecessor what he could do differently than he had. "Go and tell everyone about [the index]," came the response.
"Thirty-eight years the index was around, yet we had never promoted it in a huge way in the public. That was my charge," Blitzer said. Getting it to become a household name like the Dow Jones industrial average became a goal.
It’s safe to say his mission has been accomplished.