The exchange-traded fund (ETF) industry has evolved from a niche market designed to improve trading efficiency into one of the world’s fastest-growing investment vehicles. Few people have witnessed that transformation as closely as Reginald “Reggie” Browne, principal at GTS Securities, who has spent nearly three decades helping launch thousands of ETFs and building liquidity across the market.
Speaking on the New York Stock Exchange’s ETF Central podcast, Browne reflected on the industry’s early days, the increasingly sophisticated products coming to market, and why investor education remains just as important as innovation.
“We’ve gone from simple benchmark, cheap-beta products to extremely complex vehicles,” Browne said. “The first question we ask an asset manager is, ‘What are you trying to build?’”
Browne entered the ETF business almost at its inception. After beginning his career on the floor of the Philadelphia Stock Exchange as a teenager, he became one of the first full-time market makers in the SPDR S&P 500 ETF (SPY), when the fund traded just 50,000 shares a day. As ETF adoption accelerated, Browne said he recognized early that the structure would fundamentally reshape investing.
“I kind of knew where it was going when SPY went from 50,000 shares a day to 500,000, then a million, then five million,” he said.
Today, Browne oversees ETF market-making activities at GTS Securities, one of the largest ETF liquidity providers in the United States. The firm serves as the official market maker for more than 600 ETFs, helping issuers launch new products while ensuring investors have continuous liquidity throughout the trading day.
Market makers often operate behind the scenes, but Browne emphasized their critical role in the ETF ecosystem.
“When investors buy an ETF, they’re generally buying it from a market maker,” he explained. “Our job is to provide continuous markets, price the underlying basket accurately, and make sure investors can trade efficiently,” he said.
That role has become increasingly complex as ETF issuers move beyond traditional equity index funds into active strategies, options-based products, derivatives and international markets.
According to Browne, every new ETF begins with the same series of questions.
“What is in the basket? How do we price it? How do we replicate it? And what is the true cost of ownership?” he said.
Those considerations extend far beyond the underlying securities. Market makers must account for foreign exchange costs, taxes, local market hours, licensing fees for custom indexes and the liquidity of underlying assets before agreeing to support a new product, he said.
“If the asset class is too thinly traded or too complex, you may have difficulty finding a market maker willing to take it on,” Browne said.
He noted that many first-time ETF issuers underestimate the importance of distribution.
Beyond creating a compelling investment strategy, firms must have a clear plan for reaching financial advisors, retail brokerages and investment platforms.
“We’re partners. Your success is my success. We want investors using your product to be successful too,” Browne said.
Despite the rapid pace of ETF launches, Browne believes the industry’s growth is far from over. He predicted the U.S. market could add another 10,000 ETFs over the next several years as mutual funds continue migrating into ETF wrappers and issuers develop increasingly specialized strategies.
Browne drew a distinction between ETFs designed as long-term investment vehicles and those intended primarily for short-term trading.
“We have to separate investing tools from trading tools. Some of these products aren’t appropriate for every investor,” he said.
That, he argued, makes education essential.
Roughly 62% of Americans currently have some exposure to the stock market through retirement plans or direct investing, leaving millions who have yet to participate in long-term wealth creation. Browne believes ETFs can help close that gap because of their transparency, accessibility and relatively low costs.
“The other 38% are not here yet. ETFs are an entry point for those additional households,” he said.
He also sees significant opportunities outside the United States, pointing to growing ETF adoption across Latin America, the Middle East and other international markets as regulatory frameworks mature.
While U.S. markets remain the deepest and most liquid globally, Browne said local ETF ecosystems are expanding as investors seek efficient investment vehicles closer to home.
Looking ahead, Browne said technological innovation will continue transforming both ETF markets and the broader financial system. He highlighted advances in fixed-income ETFs, automation and artificial intelligence as areas likely to improve market efficiency and transparency.
At the same time, he expressed concern that many workers could be left behind if they fail to develop the skills needed in an AI-driven economy.
“I’m concerned there’s a whole class of people who are going to get blindsided by this transition,” Browne said.
“Some jobs will disappear, others will be created, but people need the skills to adapt,” he added.
Despite those challenges, Browne remains optimistic about both the ETF industry and the broader economy: “I think we’re just getting started.”
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