This week on the Masters in Business podcast, Barry Ritholtz sits down with Stephen Cohen, Chief Product Officer and Head of Global Product Solutions at BlackRock. With over $10 trillion in assets under management, BlackRock is the largest asset manager in the world. Cohen oversees product innovation and strategy across ETFs, active funds, digital assets like Bitcoin, and private investments. His career path, market insights, and experience at major firms like UBS, ING Barings, and Nomura give him a unique perspective on how investing products are evolving.

Stephen Cohen didn’t plan to work in finance. He studied economics in college out of interest but had no family background in investing. A neighbor working as a telecoms engineer introduced him to a trading floor — and he was immediately drawn to the energy of the markets. That experience led him to apply for jobs in banking, eventually landing at UBS, where he worked in fixed income and convertible bonds. He later moved to ING Barings and then to Nomura, gaining deeper experience in Japanese markets.

Cohen explains that Japan’s financial landscape in the 1990s and 2000s was drastically different from today. Back then, the country was still recovering from its asset bubble collapse, with persistent deflation and recurring government stimulus that barely moved the needle. Banks played a central role in lending and economic activity, meaning when banks struggled, so did the entire economy. Cohen notes that while Japan’s market has finally rebounded, it took over 30 years to recover.

In 2011, Cohen joined BlackRock shortly after its acquisition of iShares, the ETF business originally launched by Barclays. At the time, ETFs were still relatively unknown in Europe. His role involved educating investors about ETFs—what they are, how they work, and how they could be used in portfolios. He helped grow iShares from a niche product into a trillion-dollar platform in Europe.

ETFs have revolutionized investing by offering low-cost access to markets. Cohen emphasizes that ETFs challenged traditional active managers by making performance and fees more transparent. They also allowed investors to build diversified portfolios by combining passive index exposure with active strategies—something that’s now common practice but was rare back then.

When he started at BlackRock, Cohen built an investment strategy team focused on helping clients understand how to use ETFs for portfolio construction. Early challenges included simply explaining how ETFs function—from creation and redemption mechanics to how they could be blended with active funds.

Cohen believes the ETF industry still has massive room for growth. For example, fixed income ETFs only represent about 2% of the global bond market, yet they offer significant benefits in terms of liquidity and transparency. He expects fixed income ETFs to grow from about $2.5 trillion today to $6 trillion by 2030.

He also highlights how ETFs are evolving beyond indexing. Active ETFs and digital asset ETFs like BlackRock’s iShares Bitcoin Trust (IBIT) are expanding investor access to new asset classes. IBIT has quickly become one of the fastest-growing ETFs ever, nearing $100 billion in assets under management.

Cohen points out that many investors already held Bitcoin before IBIT launched but chose to switch to an ETF for simplicity and security. Managing Bitcoin through an ETF eliminates concerns about storing private keys or losing access—a key reason behind the ETF’s popularity.

Private markets like private equity, infrastructure, and private credit are another area of focus for product development. These assets have historically been hard for everyday investors to access due to complexity and limited liquidity. Cohen sees this changing as technology improves and platforms like Aladdin (BlackRock’s risk management system) make it easier to blend public and private assets in client portfolios.

He explains that BlackRock is working on ways to offer private market exposure in more accessible formats—though it may not always be through ETFs. The goal is to build better portfolios by combining different tools based on investor needs.

AI is also starting to play a bigger role at BlackRock in three main ways:
1. As an investment theme – AI-related stocks and infrastructure like data centers.
2. As a tool for portfolio management – using machine learning to analyze sentiment from earnings calls and news.
3. For product development – identifying emerging trends based on client behavior and market data.

Cohen stresses that all product development at BlackRock starts with understanding what clients need and how products can improve their portfolios—not just launching trendy funds. While many new ETFs come to market each year (more than 1,000 annually), BlackRock’s approach is more measured and focused on long-term utility.

Looking ahead, he sees continued growth in areas like digital assets, fixed income innovation, private markets, and customized portfolios that blend active and passive strategies. Even familiar asset classes like U.S. large-cap equities are being reimagined through equal-weighted indices or top-20 stock funds—highlighting how dynamic even “mature” segments can be.

When asked what investors might be overlooking today, Cohen points to two things:
– Long-term demographic shifts like aging populations and immigration patterns that influence inflation and fiscal policy.
– Ongoing impacts from COVID-19 on different sectors of the economy—many of which are still adjusting years later.

For those starting careers in investing or financial product development, Cohen advises staying curious and always learning. The investment industry is evolving faster than ever, with new technologies and strategies reshaping how portfolios are built.

Finally, he reflects on how powerful compounding can be over time—a concept that’s easy to underestimate until you’ve seen it play out over decades. Whether managing personal wealth or designing products for others, understanding compounding is key to long-term success.

Keywords: BlackRock, Stephen Cohen, ETFs, iShares, fixed income ETFs, Bitcoin ETF, IBIT, private markets, digital assets, AI in finance, financial product development, portfolio construction, passive investing vs active investing, investment strategy, asset management trends, future of investing