'We're Not A Cathie Wood Part Two': Insights From Sylvia Jablonski, The New CEO At Defiance ETFs

In March, Defiance ETFs, an exchange-traded funds (ETF) sponsor and registered investment advisor focused on thematic investing in technologies, announced its co-founder and CIO Sylvia Jablonski would become the new CEO.

To learn what this development means for Defiance, Benzinga spoke with Jablonski about her motivations and vision for the company, as well as planned actions as both a CEO and CIO.

The Move From Classic Banking: Prior to Defiance, the Fordham University and Boston College alumnus worked in sales and trading, as well as leadership and strategy at Deutsche Bank AG DB, Societe Generale Sa SCGLY and Direxion.

At the time of her arrival in the fund business, Direxion was in the early stages of disrupting the leveraged and inverse exchange-traded product industry.

“They had a strong mutual fund business but were sort of nothing of note on the ETF side,” she said in a discussion around reasons for joining Direxion. “You were starting to see this seismic shift of interest by investors in that product type.”

While there, she developed a passion for the ETP space, particularly in those products that were structured around investment themes.

“Thematic ETFs are different than the classic sector and stock index ETFs, which are great portfolio staples,” Jablonski said.

Near the end of her tenure at Direxion, she and Defiance co-founder Matthew Bielski went after the opportunity to cater to those younger investors who’ve started to inherit trillions in wealth from their parents, the baby boomers, and beyond.

“The older generations did not have that trading mentality and, long story short, … we saw that the world was changing and there was going to be this massive growth in demand for things other than classic and leveraged ETFs.”

Getting To Billions The Thematic Way: Last year, when Jablonski joined Defiance, the firm had less than a billion in assets under management. Fast-forward to today, the firm’s sitting at just shy of $2 billion in assets, which are invested in technologies and practices that are set to transform the existing paradigms of how people live and work.

By definition, thematic investing is characterized by the identification and investment in large, marcro-level trends. Everything from quantum computing to psychedelics, Defiance’s structures provide investors access to sustainable business models.

“Our goal is two-pronged. It’s to be a leader in thematic ETFs in disruptive technology. It’s also to be a leader in crypto and digital assets,” she said.

Essentially, up until today, Defiance’s focus was to develop a stable business with a good base for expansion into emerging markets like crypto. That’s, in part, why Bielski stepped down as CEO. “He’s going to run that mission that gets us success in that space,” Jablonski said.

‘We’re Not A Cathie Wood Part Two’: Defiance is a provider of passive, rules-based funds at a very low cost, palpable to younger, less capitalized investors.

Products like the Defiance Next Gen Connectivity ETF FIVG, whose holdings include Advanced Micro Devices Inc AMD and Nvidia Corporation NVDA, provide access to disruptive innovation in 5G, for instance, to companies destined to perform now and in the future.

“We’re not a Cathie Wood part two,” she said in pushback her firm has received for its interest in disruptive technologies. Defiance is investing in businesses that are more likely to withstand monetary tightening, among other things.

“We think these companies are already here, and they’re only going to get more creative, which makes me super excited looking at the companies of today and tomorrow, and packaging them in a way that is interesting for investors,” Jablonski added.

Also Read: 'Venmo Meets Robinhood': How Staax Will Let You Pay Your Friends In Stocks And More

True Fintech Asset Management: Defiance is by no means at the level of BlackRock Inc’s BLK iShares, Vanguard, or State Street Corp STT when it comes to assets under its management.

Notwithstanding, its unique offer, coupled with a commitment to educating investors and innovating into other spaces like crypto, will turn Defiance into a true fintech asset management firm that people should not ignore.

“The sky’s the limit and we would like to build the biggest ETF company,” she said about her desire to accrue $5 billion in assets. “My goal is to really grow, develop, and gather assets while providing education and awareness in those products, along the way.”

Giving Edge To The Bulls: Jablonski is incredibly passionate about markets and trading, in general.

So, we asked her about perspectives on the current environment and how risk assets may behave with tightening by the Federal Reserve, as well as balance sheet reductions.

Simply put, investors have a great opportunity to buy a repriced market.

“I think this is a tradeable bottom; you have very strong growth in jobs and savings, as well as record buybacks and dividends paying,” she explained. “It’s appropriate to raise rates because we have an economic expansion and, historically, you don’t see recessions in the year of rate hikes.”