New Spin on iShare
20 minutes into the talk, some of my classmates including myself, are a bit confused by the business model of iShare and having a hard time understanding its merit.
Confession of a Stanford Sloan Fellow Series EP22
20 minutes into the talk, some of my classmates including myself, are a bit confused by the business model of iShare and having a hard time understanding its merit. Looking at the glossy powerpoint slides loaded with numbers, acronyms, charts that iShare prepares for its clients, I'd probably take a different spin with only 3 slides:
- Slide 1 (why it matters?): a chart that compares ETF vs traditional index funds/mutual funds/S&P 500 (whatever benchmark it chooses) over the past XXX years, to demonstrate the key difference (either explosive growth or price return) between ETF and its competitors. The chart should have only time dimension labels, with no other labels, no numbers. Use strong contrast colors, black background. The curve of the series should speak for itself.
- Slide 2 (why it matters to me?): a comparison of two pie-charts between the primary customers of ETF vs its competitors, to establish the connection between the talk's audience (Sloan Fellows) and iShare's products. People's second question (after realizing this seems like an awesome product) is, can I buy/use it? This slide is to answer that very question, and the answer will be different for potential investors vs portfolio managers.
- Slide 3 (how is it a superior product vs others?): a comparison table between ETF and its close competitors like Vanguard's index funds (which most people are conceptually familiar with) to lay out more detailed differences such as liquidity, fees, product selections, etc.
- Everything else goes into Appendix.
There could be something interesting to talk about how iShare's founders came to this innovative product (or not?), to shed some light on its entrepreneurial spirit that could be relevant for even bigger audience in the Sloan class.
in 1999 my FMP (Financial Management Program, GE's management trainee program) class was taught the Enron case. FMP has been around for 90+ years and attracted some of the best top finance talents in GE, but none of us could understand the business model of Enron from that case. We just presumed we were not smart enough to comprehend the stroke of genius from Enron and felt thoroughly intellectually demoralized. I'm sure iShare is a cool financial instrument. It's just that a more common-sense based explanation would be helpful.