Donald Putnam: ETFs a “Disruptive Technology”
Dec 29th, 2006 | Filed under: Portable Alpha & Alpha/Beta SeparationBy: Cecily O’Connor, Pensions & Investments
Published: December 25, 2006
When Donald Putnam (co-founder of Putnam Lovell) speaks, people listen. So when he brands ETFs a “disruptive technology”, you know someone is in for a rough ride. In this case, it’s mutual funds. Like Morgan Stanley’s Mark Baumgartner and like us at AllAboutAlpha, Putnam views recent financial trends as fundamental game-changing “technological” innovations.
We at AllAboutAlpha go one step further and describe ETF’s, liquid derivatives and hedge funds as ”technologies” (/”techniques”) that are already changing the rules and disrupting the status quo by enabling entirely new financial value propositions.
Putnam recently told P&I that his merchant bank, Grail Partners, was so convinced ETFs were going to be disruptive that it was on the hunt for acquisitions of ETF managers. And Grail is not the only one. In fact, the recognized experts in traditional “disruptive technologies”, VC firms, are also shifting their sights from Silicon Valley to Connecticut. According to P&I, VCs GrandBanks Capital and Aquiline Holdings are also exploring ETF investments.
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