In this exclusive interview with Invesco’s Global Head of Invesco ETFs & Indexed Strategies, Anna Paglia, ETF Trends Director of Research Dave Nadig grabbed a quiet moment to talk about how the global pandemic has affected the company, its employees, and its customers in what ended up being a banner year for the business. The key, Anna argues, is connection.
Dave Nadig: Obviously this past year has been a year like no other. And yet your business seems to be growing and expanding, despite the chaos. Have there been any key factors driving Invesco forward?
Anna Paglia: It may sound a bit corny, but at Invesco we’ve always say that it’s our clients that drive our success. That’s true not just in the ETF business, but across all our business. We’ve just tried to stay focused on having high quality products and client experiences, and still innovating.
What are we doing with clients? We’ve really tried to get past the “active vs. passive” question and focus on outcomes. Our clients are out there making active decisions, even when they’re using passive products, and they expect certain returns and performance. I think we’ve done a great job at integrating both sides of the business and providing investors with the tools to get them the outcomes they want, regardless of the product wrapper.
So we’ve just kept that as a north star: maintaining our top position as a provider of innovative and value-added ETFs, and delivering great, no-surprises outcomes to our clients.
Nadig: So you talk about the client experience – but that’s obviously had to change. How is Invesco working with clients during a time without face-to-face meetings?
AP: It’s been great, honestly. We were really well positioned. As early as March, we worked closely with our marketing and analytics teams to accelerate a data-driven approach to distribution, including virtual engagement. Our team was tireless in engaging virtually with clients – zoom calls, phone calls, emails, whatever it took – answering questions about volatility, bid/ask spreads, the trends affecting the market and economy, and the best ideas for finding opportunities amidst the volatility.
Now it seems that this non-normal environment is becoming the new-normal environment, and we’ve really tried to embrace it. The team has a real innovative spirit. That drove product development in ETF business, and now it’s driving how we work with clients. Invesco continues to build our capabilities to put our clients first in this impossible time.
As one of our clients put it: “I need a partner that, in addition to offering great products, can help me better serve my own clients and be better at my job.” That’s honestly a pretty big ask of any firm, but we’ve really tried to deliver through the deployment of our teams of specialists, through the timely production of reports, data, market analysis, and thought leadership. Since the start of the pandemic, Invesco has increased its client interactions by around 300% as compared to the year before. It’s an incredible pace of communications.
Nadig: How’s it been for the employees? Has COVID changed the workplace culture?
AP: Maintaining the health and safety of our employees has of course been a huge priority for us. Thankfully, we had a very easy transition to work-from-home. We continue to work on fostering the camaraderie of the office in a virtual environment and making sure our teams use technology to interact as they did in-person.
But the most interesting thing is how it’s changed how we work with our clients. Before COVID halted travel, in-person meetings were always a top priority. Now we can schedule a video conference, and that gives everyone more flexibility but has a lot of the same value as a face-to-face discussion. So we can increase the number of clients we’re talking to individually, and that’s been great at explaining some of our bigger, suite-like capabilities to clients, like the Invesco BulletShares ETFs.
Personally I’m trying to lead by example: meeting on, camera on, even if it’s just a catch-up with one of my direct reports and I am having a bad hair day. It encourages our whole team to use video, and they don’t need to feel like it requires business attire or a special Zoom background. There is an expectation that a kid or dog is going to wander into view – often it may be my kids – and that’s ok! It has gotten to the point that we are so comfortable with video calls that I’m almost surprised when I get an ‘old fashioned’ telephone call. In an interesting turn of events, this forced distance has actually made us closer as human beings.
Nadig: 2020 was a big year for Invesco. Over $14 billion in new assets and some very successful product launches. What’s next for you all as you look to 2021?
AP: While the U.S. has been the trendsetter for a lot of ETF ideas, EMEA and Canada are leading development in a few interesting areas. For example, we’ve had ESG ETFs on the shelf in the U.S. for decade, and we’re just starting to see investor growth that mirrors other regions. ESG will continue to be a key area of focus – we have launched four ESG ETFs in Canada this year, including one with the ticker “ESG,” and an active, fixed income ETF (BESG) that integrates ESG criteria. In late December, we launched two additional active U.S. ESG ETFs, including a unique real-assets ESG ETF, as part of our active non-transparent ETF suite. This is particularly exciting because each new ESG Portfolio will use proprietary Invesco ESG screens to exclude certain issuers in specific industries or business, as well as considering ESG characteristics of issuers when selecting stock from the eligible universe.
In 2021, Canada will continue to be a market to watch and Invesco plans to allocate resources accordingly. It’s a forward-thinking region for ETFs, both in terms of regulatory and product structure. We’re also well-positioned in the Asia-Pacific region with Invesco Great Wall, and we are thinking more about our footprint there.
The focus in each region, including the U.S., is on innovation. Each team has been challenged to expand their vision of what that means locally. It’s not just about launching the next big thing, it’s about driving interest in our current strategies in an interesting way. It’s about solving actual problems we know our clients have. And when it comes to solving investment problems, there aren’t really any better tools than ETFs!
Nadig: So…what does that mean for the product line?
AP: Well first, we have a real obligation to our ETF shareholders. We have to be the stewards of good outcomes for our clients and it is our responsibility not just to create products we believe in, but to look under the hood and continually make adjustments to our ETFs in order to put our clients first. Not every improvement is a flashy new fund with a catchy ticker.
Since I joined Invesco, I have been continually impressed at the creativity of our team. The skills that you find in the Invesco ETF community are quite unique. We succeeded in pushing the envelope so many times and we did so because we never stopped at “no” when a client presented a problem to solve. Innovation takes a proverbial village. I see it over and over again. For example, when we were wrestling with active non-transparent ETFs, we flew more than 30 people to Chicago to solve one particular challenge associated with the construct, and we agreed that no one were to leave the room until we found a solution. And you know what, it worked, and it continues to work.
Our strength in the ETF business has always been our agility. We’re a big firm with startup-genes. Listen hard, solve problems, make sure our clients are happy, and our employees engaged. It may sound simple, but that’s the truth.
For more on Invesco and the Invesco product line, visit the Innovative ETFs Channel.