Allan Lane started his career at iShares back in 2008 before launching his two firms, a data science company Algo-Chain and model portfolio platform Twenty20 Investments. Prior to his ETF career, he studied mathematics at both Oxford and Cambridge University before going on to study his PhD at Washington in theoretical physics. He even had the pleasure of sitting in on a few classed led by Stephen Hawking.
How did you get into the ETF industry?
Allan Lane: I was working on the hedge fund side of Barclays Global Investors and then had the chance to Head the new research and development team for iShares back in 2008.
Your proudest moment in your ETF career?
AL: When Twenty20 Investments became the first discretionary fund manager to launch an Environmental, Social and Governance (ESG) model portfolio.
Your proudest moment outside of work?
AL: That would have to be my two children.
Your goals over the next five years?
AL: To get Algo-Chain on the map as the leading firm in the model portfolio space.
What do you do in your spare time?
AL: I’m more of a music fan than most. I’m down to my last 50,000 records after getting rid of 90,000. I have to store them all in a warehouse. Basically, when I was doing my PhD in America, I would catch a bus from Washington to LA stopping off at record stores along the way. I even put out a free music magazine to encourage record companies to give me free records to review.
After moving back to the UK, my wife came home one day and said, ‘I’ve had enough of all your records, I’ve just quit my job and I’m going to start selling them’ and so she did that for 20 years.
Other than music, we have a house in France we’ve been going to for the last 20 years and I like to read books, in particular Steve Jones which covers how systems and algorithms work and applying it to business.
How will the ETF industry evolve over the next 10 years? Or is it missing something in particular?
AL: It will go $25tn in the time frame commentators are saying of 2027 because they see ETFs as a statement for distribution and not so much about the investment product. ETFs are just a wrapper for an investment idea and so far it has restricted its attention to index tracking concepts. ETFs are the ultimate fintech product and therefore will broaden the idea of what investment funds are in an ETF wrapper. We’ve seen a recent kick in the teeth for active managers which will encourage more people to come over to ETFs.
What challenges does the industry currently face?
AL: I think the race to zero fees has consequences. Its leading to a winner takes all market. If you look at football and the Premier League, someone eighth in the table could beat the leader but that doesn’t seem to be the same for the ETF industry.
How do your companies stand out from their competitors?
AL: We think differently. We place a lot of value in usability. There can be a lot of hot air in the finance industry, but we believe the true value of content comes through and incorporating data science makes us different from the rest.
What’s your favourite ETF?
AL: Probably the Franklin LibertyQ Global Equity SRI UCITS ETF (FLXG). Its global equities incorporates ESG and factor investing. That personifies the evolution of the construction as ESG isn’t going to go away.
What would you do if you weren’t in ETFs?
AL: I would be an author.