Role profile: Working in ETFs

Published on: Jul 15, 2019

Tomasz thumbnailTomasz Mazur, CFA, ETF Trader at RBC Capital Markets



What is your current role and what are your main responsibilities?

I am an ETF Trader at Royal Bank of Canada in London. My main role is helping the bank’s clients execute their ETF trades in the most efficient way. This typically involves acting as a market maker, providing liquidity and continually supplying bid and offer prices to our clients and on exchanges across Europe. I am also heavily involved in business and technology development. The role is very varied, with daily activities ranging from designing pricing methodologies, performing statistical studies or writing system specifications to executing trades and hedges, speaking to clients or planning for new business activities.

What do you most enjoy about this role?

In my role no two days are ever the same. My trading activity covers the whole universe of ETFs, spanning all asset classes. Each ETF has its own idiosyncrasies and trading days can become very intense, but that buzz is, in fact, what drives me. In addition, our business is going through a very dynamic growth phase and I really enjoy the entrepreneurial nature of what I do. Seeing direct impact of the decisions I make and the hard work I put into what we do is very motivating.

What are the most important skills for success in this role?

Due to the wide range of underlyings ETFs have, good breadth of financial knowledge is a must. This is where having completed the CFA Program proves invaluable. Given some of the subtleties of ETF trading, attention to detail is critical. A good dose of common sense and problem-solving skills also helps, as there are often complex issues that need to be considered and decisions that have to be made promptly. This is often the biggest hurdle to overcome for recent graduates, used to well-defined academic problems, with only a single correct answer and longer timeframes.

How did you get to this position and how would you advise CFA charterholders who would like to do a similar role?

My first role was as a Business Analyst within the equity derivatives division of Bank of America Merrill Lynch. It was a great entry-level role, as it gave me invaluable insight into multiple areas of trading. It also made me realise that joining a newly-formed trading desk would be a great opportunity to get a thorough understanding of the whole trade process. My rationale was that getting my hands dirty would be the best way to learn how things really work. When such an opportunity presented itself, I jumped on it. The rest has simply been a natural progression from that one decision. A good path to a career in trading is via a dedicated graduate programme, but more senior roles also exist for specialists with technology, quants, risk or operations backgrounds.

How has the role changed over the past ten years?

Advances in electronic trading and execution automation have dramatically transformed the role of a trader over the last decade. Given that the majority of trading is now performed by machines, a typical trader is nothing like Gordon Gekko anymore. Instead, most trading roles are now performed by quants and quant developers. The second main trend shaping the role of an ETF trader over the past ten years has been the rapid growth of AUM. The shift from active to passive management style has contributed to European ETF assets growing at an impressive 20% average annual rate since the early 00’s. This has created a lot of opportunity but has also attracted many new players to the market, resulting in tighter spreads, lower commissions and generally more efficient markets.

How do you see your role changing in the next ten years?

The waves of electronification and automation currently sweeping across trading desks will make them look more like something out of Silicon Valley rather than Wall Street. Greater scalability will be achieved, with more products and trades handled per trader. Further, artificial intelligence is already being used in pricing and execution of trades and this revolution will continue, altering the role of a trader even further.