January 9, 2026
Lunch and Learn Events are hosted by CFA Society Chicago’s Professional Development Advisory Group. The intent of these events is to provide career and networking information for CFA Society Chicago Members. These events provide an overview of the participating firm(s) as well as related career advice. Many of the insights may be applicable to the broader industry.
The panelists for this event were the following professionals from Invesco:
Garrett Glawe, CFA – Head, Asset Owner and Consultant ETF Specialists
John Feyerer, CFA – Head, US Product Development
Introduction
Invesco is a global investment management firm, trusted with over $2 trillion in assets across 120+ countries. With more than 8,300 professionals, the firm delivers innovative strategies spanning equities, fixed income, exchange traded funds (ETFs), and alternatives—empowering institutions and advisors to unlock new opportunities for growth.
For this discussion, Glawe and Feyerer focused on Invesco’s ETF offerings. Invesco ranks among the leading ETF sponsors by assets. A significant portion of Invesco’s ETF presence is driven by Invesco QQQ, which is one of the most actively traded and recognizable ETF products in the market (tracking the Nasdaq-100 Index). QQQ and other offerings play a central role in Invesco’s ETF platform, providing liquidity, visibility, and scale, and supporting both long-term investors and tactical users.
Glawe and Feyerer then outlined the history of ETFs while highlighting Invesco’s unique contribution to ETF products and innovation through the years.
Early Phase: ETFs as Beta Vehicles (1990s–Early 2000s)
Initially, ETFs were largely limited to emulating market-weighted benchmarks. This usage was primarily tactical, focused on liquidity, intraday trading, and low-cost exposure to
broad equity indices. During this period, ETFs were viewed as complements to mutual funds rather than as a distinct strategic category.
Meanwhile, Invesco’s early engagement with ETFs reflected a different approach. Invesco viewed ETF construction as a potential source of return differentiation. The firm emphasized alternative weighting methodologies and factor-based frameworks, establishing an early presence in what later became known as smart beta. In this way, Invesco demonstrated that ETFs could be used to deliver systematic investment solutions rather than simply replicating traditional benchmarks.
Expansion and Institutional Acceptance (Mid-2000s–Mid-2010s)
As ETF usage broadened, investors increasingly recognized their structural advantages, including tax efficiency via in-kind creation and redemption, daily transparency, and operational scalability. Over this period, ETFs began to migrate from tactical tools into strategic portfolio allocations. ETF managers also began expanding across asset classes, particularly into fixed income.
Invesco participated proactively in this expansion, applying its systematic and risk-aware investment capabilities to new segments. Invesco viewed ETFs as vehicles capable of supporting both rules-based and discretionary strategies. This laid the groundwork for the firm’s later positioning in active ETFs.
Regulatory Inflection and the Rise of Active ETFs (Post-2019)
A critical inflection point for the ETF industry is the adoption of the SEC’s ETF Rule in 2019. This regulatory change reduced certain frictions associated with launching ETFs and expanded the feasibility of active strategies within the ETF framework. In the years following the rule’s implementation, the ETF market experienced a pronounced shift. While passive ETFs continued to dominate assets under management (AUM), active ETFs accounted for the majority of new product launches and an increasing share of net flows. The panelists noted that, by the mid-2020s, approximately 90% of newly launched ETFs were actively managed.
Invesco viewed the rise of active ETFs as confirmation that investor demand had shifted decisively toward the ETF wrapper itself. During this period, Invesco also observed that the active-versus-passive label was becoming less informative. Some index strategies
exhibited active characteristics while some active ETFs exhibited more passive characteristics due to systematic constraints.
Recent Years: Income, Differentiation, and Scale (Early–Mid-2020s)
In the most recent phase, investor demand has increasingly centered on outcome-oriented strategies, particularly income. Derivative-based income ETFs emerged as one of the fastest-growing segments of the ETF market. This reflects investor sensitivity to volatility, drawdowns, and yield uncertainty.
Invesco’s role during this period is characterized by selective participation and consideration of portfolio behavior across market environments. Rather than pursuing yield maximization alone, Invesco focuses on how risks are managed and strategies perform through different market regimes. This approach places greater emphasis on durability, differentiation, and long-term relevance rather than short-term product proliferation.
Forward Outlook: Structural Growth and Selective Innovation
Looking forward, the ETF industry is entering a phase of consolidation and structural dominance. Flow trends indicate continued migration from mutual funds to ETFs, suggesting that ETFs are likely to surpass mutual funds in AUM. One of the next major growth opportunities for ETFs is defined contribution plans. Adoption has been somewhat constrained by the legacy operational limitations of 401ks and other similar plans. However, as these platforms evolve, the operational limitations will be lifted, and ETF growth will accelerate accordingly.
The panelists cautioned that mutual fund–to–ETF conversions are not a “magic bullet” to ensure future growth. To be successful, the underlying strategy must align with investor needs while also retaining operational feasibility and long-term strategic viability. Additionally, the investor and tax profile of certain mutual fund share classes may not make sense to convert.
Active ETFs will remain a key element of Invesco’s future growth strategy. Emphasis on this area is consistent with a broader industry shift toward using the ETF structure to deliver both active and systematic investment strategies. Invesco will continue to scale its core franchises while selectively expanding active ETFs where they can deliver meaningful solutions that support client investment outcomes.
This article was prepared by Thomas Prendergast, based on a transcript summarized with the assistance of ChatGPT (OpenAI). All content was revised, edited and reviewed for accuracy and clarity by the author.