International Securities Exchange's Mark Abssy Talks Unlikely Commodities, Copper Increases and More

When Benzinga's own Kyle Bazzy had the chance to speak with Mark Abssy, the Index & ETF Manager for the

, he knew he was in for a treat. As the first all-electronic options exchange, the ISE transformed options trading into an electronic stratosphere. “It's interesting because, up until the explosion of ETFs, everybody was very concerned about what the portfolio managers were doing,” Abssy told Benzinga. “The only way you could do that was, you know, 45 or so many days after a quarter, a mutual fund company would say, ‘Here were the holdings of your fund,' 45 or 60 days ago.” Abssy was particularly dissatisfied with the lack of transparency into what was going on with these funds. “You know, what ETFs allow you to do at a very high level is truly understand what is in your portfolio,” he said. “The days of buying mutual fund shares, you know, paying a 2.5% load or more, and putting your full faith and trust into the manager to beat that index, pretty much are over for those investors that really are taking charge in what they're doing and what they're investing. ETFs give them the daily transparency. There's really no guessing as to what is in your portfolio or how it's doing.”

With regard to the First Trust ISE Water Index Fund

, Abssy recognizes that water is one of those things that, depending on where you live in the world, it is either at the top of a person's list of concerns or it's something people take for granted because they think it will always be there. “Here, in this country, over the last decade, there are more and more pockets, communities – regions even – of the country which are feeling the brunt of a lack of water,” Abssy said. “I think more and more people are beginning to realize that water is not this endless resource that comes out of the tap. There truly is a finite amount of drinkable water on this planet. The way that the population growth and demographics are progressing, and the way that industry has been using water and to a large extent polluting water, these things are showing up, and they're showing up in the form of areas and regions in America with water shortages.” Abssy regards water as a very serious issue. “While it's strange for a lot of us to think of water as a commodity, as something that's investable, of course there are a large number of companies that are involved in this space, and with that the opportunity to invest in them,” he adds.

Abssy spoke briefly about copper and its

late last year. “Copper, in the back half of last year, went up 12% or 13%,” Abssy said. “If you look at our index, First Trust ISE Global Copper Index

, that fund was up over 30% in that same time period. And a lot of that was because the price of copper not only went up but it kind of broke through some kind of production level. Copper prices had been rising up until August, and the fund was rising too, but there was this point in August where copper just started to take off, and the fund went exponential – it went parabolic as compared to the spot price. People realized hey, now these companies are really making money and it's going to be great in the future.”

“The ISEE is a sentiment index,” Abssy said. “Unlike kind of a more traditional sentiment indexes, you know, advance/decline line, or buying versus selling, what we've done is look at options activity on equities and we looked at the…basically it's kind of a put call ratio, except what we have done is stripped out certain market participants. “And what I mean by that is that we have taken out the market maker to market maker trading. We really distilled the put call ratio down to true retail exposure in these names. So, the sentiment index is truly a pure retail gauge – so it really is where the markets are going, not necessarily where market makers have seen opportunities to pick up a penny here or a penny there or something like that. You're really looking at market sentiment in this index.”