A Swift History of ETF Eras

What might the sensational superstar Taylor Swift have in common with exchange-traded funds? David Mann, our Head of ETF Products and Capital Markets, lightheartedly examines the different eras of the ETF industry—drawing parallels to Swift’s memorable eras as a musician.

A Swift history of ETF eras

Thanks to my daughter’s impeccable planning plus a little bit of luck, we were fortunate enough to see Taylor Swift’s incredible concert at Levi’s Stadium in Santa Clara, California. Exuding non-stop energy, Swift performed 45 songs over 3.5 hours to an ecstatic crowd that belted out every word right along with her. There is a reason they renamed the city “Swiftie Clara!” I am a little worried about recency bias but feel comfortable declaring this is the best concert I have ever attended. My daughter is still buzzing.

I was listening (and singing!) song after familiar song across all the “eras” of Swift’s long and successful musical career. And since my time in the ETF industry aligns nearly identically with Swift’s time as a performing artist, I wondered how else the products of our careers may be aligned. As a fan of both ETFs and Taylor Swift, I thought it’d be fun to reimagine her lyrics as reflections on the ever-expanding ETF industry. Here’s how I’d imagine she could have drawn inspiration from our industry based on some of my favorite songs from the concert:

Love Story (2008) – “It’s a love story. Baby, just say ‘Yes’.”

In the early 2000s, ETFs were still a bit of a novelty. Between 2000-2006, ETFs in the United States averaged around $40 billion in inflows each year.1 That changed in 2007 and 2008 when investor interest exploded, and the average inflows jumped to more than $150 billion.2 The ETF “Love Story” had officially begun!

I Knew You Were Trouble (2012) – “ ’Cause I knew you were trouble when you walked in/So shame on me now…”

ETF assets and inflows continued to grow as more and more investors began to appreciate the ETF vehicle. However, there was potential early “trouble” in the US market structure, causing irregular trading during times of heightened market volatility. These worries were sadly justified during the original Flash Crash of 2010, which negatively impacted ETFs along with single stocks.