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Kathleen Moriarty, aka 'Spider Woman,' Helped Launch Exchange-Traded Funds -- WSJ

The Wall Street Journal · 01/06/2023 10:00

By James R. Hagerty and Jason Zweig

As a securities lawyer, Kathleen H. Moriarty was known for her ability to persuade staff members at the Securities and Exchange Commission that they could live with strange new types of investments.

Her greatest triumph was exchange-traded funds, or ETFs, a type of asset that regulators pondered for years before approving. In 1993, she helped launch the hugely successful SPDR S&P 500 ETF.

For that triumph, she earned the nickname of SPDR Woman, or 'Spider Woman.' She embraced that distinction by wearing a gold brooch in the form of a long-legged spider and decorating her office with arachnid memorabilia.

In recent years, as a lawyer at Chapman & Cutler, she delved into the digital asset industry and represented funds aiming to invest in cryptocurrencies. She was a board member of the nonprofit Women in ETFs, which promotes women in finance.

"I tend to concentrate on more exotic products," Ms. Moriarty told The Wall Street Journal in 2016. She added: "Zero of my plans include retirement."

Ms. Moriarty, who never retired, died at a Manhattan hospital Dec. 20. She was 69 years old and had been under treatment for a severe case of diverticulitis.

Though Ms. Moriarty loved the challenge of pitching novel ideas to the SEC, she had her limits. "If it's really completely ludicrous you don't want to waste regulators' time," she said.

Unlike traditional mutual funds, most ETFs aren't run by a staff of highly paid portfolio managers. Instead, they mechanically seek to match the returns of a market index like the S&P 500. ETFs charge as little as a few hundredths of a percentage point in annual expenses, a fraction of the costs at most traditional mutual funds. A wrinkle in their structure also helps ETFs minimize investors' tax bills.

Introduced in the U.S. in 1993, ETFs struggled at first: They were more complicated than mutual funds and, in those early days, couldn't be bought or sold without a commission. The SPDR S&P 500 ETF shrank in size early on, finishing 1994 with only $424 million in assets, and it remained the only ETF in the U.S. until the following year. In the mid-1990s, though, as stocks kept booming, more ETFs rolled out. By the end of 1999, 30 ETFs held $33.9 billion.

The brutal bear markets of 2000-02 and 2008-09 were good for ETFs. Investors in traditional mutual funds lost large amounts of money as their portfolio managers were unable to sidestep down markets, and investors got hit with big tax bills. In response, they began fleeing to ETFs, an exodus that is still under way. Assets in U.S. ETFs totaled $6.71 trillion as of Nov. 30, according to London-based research firm ETFGI.

Kathleen Hill Moriarty, the older of two children, was born April 19, 1953, in Evanston, Ill. Her mother died when Kathleen was very young. Her father was a chemical engineer. She grew up on the Upper East Side of Manhattan and studied psychology and art history at Smith College, where she graduated in 1975. After two years as a paralegal in Washington, she enrolled in law school at the University of Notre Dame and graduated in 1980.

She joined the law firm of Hawkins Delafield & Wood and worked on unit trusts. She later worked as a partner at several other law firms, including Arnold & Porter Kaye Scholer, before joining Chapman in 2017.

While studying at Notre Dame, she met R.J. Keefe. They married in 1981. Her survivors include Mr. Keefe and a younger brother.

In recent years, Mr. Keefe took care of the household in Manhattan while Ms. Moriarty pursued her career. "You would not find Kathleen in the kitchen," he said. She enjoyed knitting and making craft items out of beads.

Earlier in her career, Ms. Moriarty was a rare woman in the ETF trade. At one conference, she was dining with a group of men. A woman came over from a nearby table and said she had noticed Ms. Moriarty was the only woman at her table and wondered what she did for a living. "These gentlemen are all my clients," Ms. Moriarty said.

Write to James R. Hagerty at bob.hagerty@wsj.com and Jason Zweig at intelligentinvestor@wsj.com

(END) Dow Jones Newswires

January 06, 2023 10:00 ET (15:00 GMT)

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