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Speaker 1: Welcome to Trillions. I'm Joel Webber and.

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Speaker 2: I'm Eric Belchernas.

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Speaker 1: There's this theme that we've been talking about for a while, Eric,

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Speaker 1: and you've been wanting to do it. I've been resisting.

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Speaker 2: So I don't know how many episodes we've done.

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Speaker 1: Maybe two hundred we should actually count.

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Speaker 2: And there's probably only like forty categories of ETFs, meaning

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Speaker 2: we've covered many categories multiple times that we've never covered

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Speaker 2: this one because because of me. Yeah, well, and I

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Speaker 2: understand it is arguably one of the more boring sounding categories.

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Speaker 2: I mean I was talking about I would put it

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Speaker 2: right up around short duration bonds.

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Speaker 1: Have you done that one?

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Speaker 2: We have? Yeah, because money markets, this is municipal bonds.

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Speaker 1: Now, hold on, I'm gonna fall asleep.

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Speaker 2: Before people tune out here. Listen a couple things for

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Speaker 2: of all, One of the most red analysts in Bloomberg

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Speaker 2: Intelligence is Eric Kazatski, my colleague. I've known her for

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Speaker 2: years and he's very colorful writer too, And people really

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Speaker 2: use Muni's, especially if you're planning a portfolio for a

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Speaker 2: real person. The after tax yield on these bonds is great.

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Speaker 2: I remember interviewing Bogel Jack Bogel and he was a

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Speaker 2: big Muni guy. He loved Muni's for his portfolio. And

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Speaker 2: when I look at some of Eric Kazyski's headlines, what

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Speaker 2: I like about them is they're so tangible. La Fires,

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Speaker 2: Texas Battleship, JFK Airport, the Hollywood Strike, DeSantis, and Disney.

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Speaker 2: There are Muni pegs to a lot of stuff that

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Speaker 2: we love and know. So I think.

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Speaker 1: America is built on the municipal bonds.

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Speaker 2: It really is. It runs on Muni's basically. So we

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Speaker 2: are going to try to.

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Speaker 1: Get in other words, a long overdue episode.

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Speaker 2: We're going to try to make Muni's cool today. Yeah, okay,

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Speaker 2: that's our that's our time. I'm going to try to

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Speaker 2: keep you awake, riveted, and Eric will too.

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Speaker 1: I'm in, I'm in. Eric has the bigger job, though,

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Speaker 1: I'm so ready and joining us on this episode. Eric

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Speaker 1: Kazatski an analyst with Bloomberg Intelligence who's also the co

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Speaker 1: host to the podcast Masters of the Universe, this time

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Speaker 1: on Trillions Muni Land. Eric, Welcome to Trillions.

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Speaker 3: Hey, I'm happy to be here, and what a setup.

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Speaker 3: I wasn't sure where that was going at first, but

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Speaker 3: you guys turned it around at the last minute. Thank you, Eric.

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Speaker 1: You know, as baltun is set up here. Long overdue conversation.

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Speaker 1: So why do investors like municipal bonds?

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Speaker 3: I mean it's really simple. Do you like paying taxes?

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Speaker 3: I don't like paying taxes?

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Speaker 1: Okay, So why are they so boring?

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Speaker 3: I think because people are confused by them. But look,

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Speaker 3: at the end of the day, it's the simplest thing

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Speaker 3: to understand. Right, Hey, Look, you live somewhere.

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Speaker 2: Has a school.

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Speaker 3: Undoubtedly that school was built with tax exempt bonds. You

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Speaker 3: have been to a sports game lately, a concert, Undoubtedly

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Speaker 3: those have been built with tax free bonds. Airports, roads, bridges.

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Speaker 3: It's just the easy stuff you see every day that

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Speaker 3: gets ignored the most. That's really what it comes down to.

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Speaker 1: Okay, So there's this tax exemption that munieds benefit from.

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Speaker 1: How does that work and why are they exempt?

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Speaker 2: Yeah?

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Speaker 3: I mean, well, so it's been tax law for almost

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Speaker 3: one hundred years. I mean, the market has been around

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Speaker 3: that long. But essentially, what you do is the issuer

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Speaker 3: gets a benefit to borrow at a lower rate, and

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Speaker 3: that's passed on to the buyers of those bonds and

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Speaker 3: they get to save the interest that comes in as

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Speaker 3: income from their federal and state taxes. Now, it doesn't

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Speaker 3: all work the same. Some states have different laws. But

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Speaker 3: let's just assume that they're all federally in state tax free.

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Speaker 3: It's just simple for this conversation. So look, it's a

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Speaker 3: double benefit, right. The issuers get the benefit of borrowing

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Speaker 3: lower and the investors get the tax free income. It's

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Speaker 3: really as simple as that.

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Speaker 2: Real quick, Okay, let's just bring one up here. The

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Speaker 2: I shares California Municipal Bond etf CMF is the ticker it.

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Speaker 2: I have a yield here of two point eight percent.

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Speaker 2: So what is the because when I when you talk

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Speaker 2: un these people talk about after tax yield, what would

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Speaker 2: be the tax equivalent yield? How much more do you

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Speaker 2: get if you lived than say California.

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Speaker 3: It's so you use the role of two here, right,

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Speaker 3: Just figure in these high tax dates like New York,

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Speaker 3: New Jersey, California.

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Speaker 1: Just double the yield.

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Speaker 2: You'll probably get pretty close.

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Speaker 3: Because you know, the highest tax back in California, you're

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Speaker 3: looking at like thirteen point three percent. You add in

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Speaker 3: federal taxes Medicaid, you're up near fifty percent, So five

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Speaker 3: point six percent on a taxi equivalent basis.

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Speaker 2: That's pretty cool. See that they don't put that in

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Speaker 2: the data need because that's keeping you do.

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Speaker 1: Yeah, Eric, I need you for something else here, which

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Speaker 1: is why is that taxes in status potentially at risk?

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Speaker 3: Well, it really comes down to the returning president. He

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Speaker 3: has a mandate in his mind to roll out of

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Speaker 3: the Tax Cuts and Jobs Act. And look, it's going

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Speaker 3: to cost anywhere three and a half four point six trillion,

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Speaker 3: I don't know, pick a number, any number, but you

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Speaker 3: need a way to pay for it. And every election

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Speaker 3: cycle it comes up that you know, muni bonds are

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Speaker 3: going to be at risk. And I think it really

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Speaker 3: comes down to the fact that people assume that those

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Speaker 3: people who are buying munis are sitting around with top

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Speaker 3: hats and monocles, just smoking cigars and enjoying all this

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Speaker 3: tax free income. But if you look at where the

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Speaker 3: money's going in muni's, I'm sure we're going to touch

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Speaker 3: on this. It's going to eats, it's going to SMEs.

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Speaker 1: And these are.

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Speaker 3: Low cost, low dollar fee structures that are attracting people

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Speaker 3: not in the highest brackets. So you know, that's really

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Speaker 3: sort of where the risk comes in. It's going to

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Speaker 3: impact everyone.

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Speaker 1: So just to be clear here, nothing is happening yet,

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Speaker 1: but it's just part of the chatter about the Trump's

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Speaker 1: tax cuts, which will become a conversation this year since

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Speaker 1: he's back in the White House and has control of

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Speaker 1: Congress and those tax cuts are expiring at the end

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Speaker 1: of the year.

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Speaker 3: Right, Yes, So the Houseways and Means put out a

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Speaker 3: wish list the fifty pages long, and the union exemption

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Speaker 3: going away was one of the items on there. But

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Speaker 3: another thing you need to know about people in munialand

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Speaker 3: we'd love to be part of the current news cycle,

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Speaker 3: and this is just another way for us to sort

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Speaker 3: of pop in there.

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Speaker 1: Not to be boring and be part of the es. Yeah.

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Speaker 2: Yes, actually thing I tell people that all the times,

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Speaker 2: Like you give me a headline, I'll show you the

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Speaker 2: ETF PEG and I like that too. Eric, I, well,

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Speaker 2: let's go to La fires. Explain to me the Munich

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Speaker 2: connection here, because I saw you had a note that. Again,

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Speaker 2: his notes do really well readership wise.

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Speaker 3: So yeah, so Los Angeles fire is just another instance

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Speaker 3: of nature just wreaking havoc on our market.

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Speaker 1: You know.

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Speaker 3: Look, every year you got hurricane damage in Florida. Inevitably,

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Speaker 3: it's hitting areas where you know, people are paying taxes.

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Speaker 3: Those taxes support general obligation bonds, you know, hospitals, colleges,

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Speaker 3: things are impacted by these weather events. And unfortunately California

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Speaker 3: it really sort of got out of control with this

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Speaker 3: sort of unseasonal fire that took everyone by surprise. By

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Speaker 3: the numbers, we sort of calculated that there was potentially

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Speaker 3: about seventy billion of you know, MUNI sort of tangentially.

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Speaker 1: Related projects at risk.

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Speaker 3: What it's actually going to shake out to too early

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Speaker 3: to tell still, you know, but look, the totality of

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Speaker 3: the damage would certainly call a lot of people by surprise.

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Speaker 1: And what does that mean for bondholders?

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Speaker 3: You know, hopefully nothing right. We want to be benign

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Speaker 3: and in the background, and we want to sort of

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Speaker 3: keep on with the you know adage that there's never

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Speaker 3: been a true MUNI default from an act of God.

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Speaker 3: We haven't seen one yet. I don't really think you're

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Speaker 3: going to see one here. It doesn't mean there's not

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Speaker 3: going to be litigation that's going to be painful, especially

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Speaker 3: for LA Department of Water and Power. The Water Department

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Speaker 3: is already smacked with the lawsuit. Not sure how it's

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Speaker 3: going to play out, but they could have some liability.

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Speaker 2: Right when has there been defaults? What would cause one?

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Speaker 3: Well, I mean you have defaults as far as Puerto Rico,

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Speaker 3: as far as Detroit, you know, and New York back

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Speaker 3: in the seventies. Right, it really comes down to bad

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Speaker 3: fiscal management. Bad fiscal management has caused more issues immuniland

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Speaker 3: then weather and nature related events at this point.

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Speaker 2: So do you cover that, Like, do you look at

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Speaker 2: where maybe the code red situations are, where there's like

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Speaker 2: total mismanagement of funds. I don't know why I keep

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Speaker 2: thinking of Illinois, like are they like that?

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Speaker 3: Your right to think that. Yeah, Look, we try and

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Speaker 3: turn on the lights and see where the cockroaches are

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Speaker 3: running as much as possible. But you know the problem

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Speaker 3: is these are slow burned things, right, Detroit played out

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Speaker 3: over years. It wasn't a new issue. Puerto Rico, same thing.

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Speaker 3: You know, certainly Chicago, Chicago board ed, Illinois. They all

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Speaker 3: have their problems. The problem is they're able to kick

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Speaker 3: the can down the road.

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Speaker 1: You know.

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Speaker 3: We just try and stay on top of it and

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Speaker 3: tell investors sort of where the risks are.

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Speaker 2: So let's talk about practical application. Let's say you have

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Speaker 2: a munique portion of a portfolio. The two biggest ones

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Speaker 2: on the market are MUB and vtebs. That's our shares

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Speaker 2: in Vanguard. Those have like thirty five and forty billion dollars.

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Speaker 2: They're the studs. Like most categories, it's like the two,

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Speaker 2: the big two have the top ETF. So should someone

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Speaker 2: just buy one of those and call it a day,

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Speaker 2: or like, what does a munich analyst think of those

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Speaker 2: two sort of big timers.

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Speaker 3: It's like vanilla ice cream. It's great, it's a fine flavor,

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Speaker 3: it's a top seller, but like, you can only have

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Speaker 3: so much of it, right, Everybody wants some variety, and

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Speaker 3: that's the beauty of the ETF market is that it's

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Speaker 3: bringing in a lot of alternative flavors and small boutique

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Speaker 3: ice cream providers. Let's say you know, MUB and b

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Speaker 3: TEP are great, right, measured by flows, they are. They're

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Speaker 3: the biggest creatures, sort of like roaming around Uniland. The

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Speaker 3: problem is they miss a big portion of the market.

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Speaker 3: They're passive, which is not a bad thing, but they

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Speaker 3: don't invest in hospitals, they don't invest in higher ed

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Speaker 3: they don't invest in bonds that are subject to alternative

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Speaker 3: minimum tax. We wrote a note earlier in the year

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Speaker 3: they miss about eighteen percent of the investable market for

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Speaker 3: unis just based on their sort of stringing criteria, and

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Speaker 3: unfortunately that eighteen percent makes up a big portion of

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Speaker 3: returns in every single year. So I think investor are

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Speaker 3: missing out right.

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Speaker 2: I remember back I don't know five six years ago,

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Speaker 2: MUB was the big category leader by far. Then Vanguard

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Speaker 2: launched one started climbing the charts VTEB, and I remember

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Speaker 2: MUB I think was twenty five basis points. Vanguard was

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Speaker 2: like six or seven, and MUB slashed its fee in

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Speaker 2: one shot from twenty five to seven. And I thought,

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Speaker 2: that's why I call it the tyrodome. Jrol. You're the

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Speaker 2: leader of the category, most volume, most assets, but you

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Speaker 2: know what's about to happen, and you basically cut off

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Speaker 2: both legs and an arm. That's it. I've never seen

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Speaker 2: self cannibalization that great. But there's still number one.

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Speaker 1: It worked.

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Speaker 2: I mean, had they not done that, I think vteb's

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Speaker 2: three four times bigger. So that's also something Eric. Just

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Speaker 2: before we get to the unique ETFs, the MUNI mutual

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Speaker 2: funds they're all active, right, There really is not a

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Speaker 2: lot passive there. And here you have two ETFs at

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Speaker 2: f five basis points each. How much does that factor

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Speaker 2: into all the money that's rushed here, Given that most

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Speaker 2: mutual funds are like, you know, eighty basis points to

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Speaker 2: maybe one point five percent.

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Speaker 3: It's factored in a ton When you think about who

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Speaker 3: the majority of folks are buying this thing, right, you

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Speaker 3: have a lot of retail people just directly buying. But

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Speaker 3: it's also part of platform investing.

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Speaker 1: Right.

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Speaker 3: So if I'm an RIA, I'm charging one percent on

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Speaker 3: a portfolio, and I can go from let's say, splitting

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Speaker 3: a thirty basis point fee with a mutual fund and

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Speaker 3: keeping seventy to keeping ninety five and I have fives

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Speaker 3: you know for investing in MUB or VTAB. That sounds

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Speaker 3: much better to me, right, And my clients are probably

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Speaker 3: like none the worse off as far as exposure. But

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Speaker 3: I think again, two different styles, right, If you're worried

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Speaker 3: about performance, you may not want to go dout on

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Speaker 3: the road. If you're focusing on just acid allocation and fees,

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Speaker 3: they're certainly the most attractive thing out there.

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Speaker 1: Okay, So hot sauce has come for every ETF I

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Speaker 1: can think of, what does hot sauce in muni bonds

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Speaker 1: look like?

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Speaker 2: So, you know, one thing that was launched very recently

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Speaker 2: was Spider has target Maturity Muni bonds, So for example

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Speaker 2: at Spider SSGA MY twenty twenty eight, so that's a

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Speaker 2: niche version, so that that means all the bonds mature

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Speaker 2: in that year. That way you can like time your

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Speaker 2: duration a little bit. We've seen some other things launched

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Speaker 2: like tax aware muni bonds, a lot of short duration

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Speaker 2: muni bonds, high yield, I know high yield. Eric was

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Speaker 2: one that back when COVID happened. Eric and I talked

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Speaker 2: a lot because there was NTF HYD which is the

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Speaker 2: van k hig yield muni and this thing traded it

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Speaker 2: like twenty to thirty percent discounts to NAV. And of

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Speaker 2: all the bond ETFs, this was the worst in terms

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Speaker 2: of it obviously held the least liquid stuff that its

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Speaker 2: price was deviating that much from the NAV, although the

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Speaker 2: NAV was based on old bond prices, so it was stale.

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Speaker 2: And it's interesting that ETF, even though it was so,

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Speaker 2: it turned into a closed then fund essentially it's took

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Speaker 2: in more assets since then and the volumes the same,

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Speaker 2: So it seems like people know how to roll with that.

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Speaker 2: But Eric, what's the liquidity like in this scene? Like,

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Speaker 2: is a high old MUNI bond etf like something that's

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Speaker 2: for normal people or is that something that really just

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Speaker 2: traders should use. No.

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Speaker 3: I think there's a lot of liquidity, right. Look, what

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Speaker 3: happened in the early days of COVID, I feel like

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Speaker 3: is a complete anomaly, right, And I think the market's

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Speaker 3: a lot more prepared from a market structure standpoint than

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Speaker 3: it was in twenty twenty. A lot more things have changed.

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Speaker 3: So let's say we had a sharp sell off again,

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Speaker 3: I think the folks who are running hid if I

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Speaker 3: was them, I would imagine they have a much deeper

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Speaker 3: ig basket of bonds to throw over the side of

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Speaker 3: the boat. If there's some sort of like sharp correction

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Speaker 3: then there was back then, right, just to sort of

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Speaker 3: like hedge against that. But you know, look, I think

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Speaker 3: the fact that this market is really sort of like

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Speaker 3: if you think about it in terms of the the

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Speaker 3: you know, the fun companies are going to go to

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Speaker 3: where the puck is right, and they're all skating toward

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Speaker 3: high yield active, you know, sort of restructuring the old

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Speaker 3: mutual funds, wrapping them in an ETF wrapper.

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Speaker 1: That really is sort of the.

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Speaker 3: Play of the day when it comes to this dimmunity

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Speaker 3: space right now, and we're seeing sort of that play out,

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Speaker 3: and the fact they're all crowding into the high yield space,

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Speaker 3: it means that they still see an opportunity there. What's

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Speaker 3: going to be interesting to see if the market responds

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Speaker 3: from an issuing standpoint to sort of keep the lights

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Speaker 3: on and keep the supply going to feed all these

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Speaker 3: new projects.

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Speaker 2: It's interesting, Joe, one hundred and forty one billion in

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Speaker 2: this category, twenty three billion active. But active makes up

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Speaker 2: the majority of the number of ETF So, in other words,

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Speaker 2: active is a lot of the new launches, a lot

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Speaker 2: of the supply.

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Speaker 1: And we know that active has been coming for fixed

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Speaker 1: income forever, so that's not surprising, maybe not forever for

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Speaker 1: the past couple of years. As Hot Sauce goes, I

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Speaker 1: don't think that that's very spicy, Eric.

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Speaker 2: I don't know. I mean hyd I'm not sure it

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Speaker 2: gets much spicier than that. There's no leveraged Munich and

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Speaker 2: this is icy as meaning land gets yeah, And I

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Speaker 2: think that's part of why sometimes we don't look at

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Speaker 2: it too much, like it never jumps away. That's why

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Speaker 2: HYD at that time I called the Canary and the

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Speaker 2: coal mine because it was trading at the deepest discount.

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Speaker 2: But one thing I thought about this space, Eric, is

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Speaker 2: this idea of like how to jazz it up a little,

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Speaker 2: because when Eric talks about and his headlines, it gets

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Speaker 2: my brain going better than when I look at the

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Speaker 2: names of the ETFs. For example, how come they don't

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Speaker 2: come out with hospitals and schools and because.

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Speaker 1: In my opinion, this is I'm kind of into those

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Speaker 1: reality ESG the things I know.

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Speaker 2: Yeah, it's like it's like better than ESG because like

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Speaker 2: I'm gonna invest in this and I literally know it's

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Speaker 2: going to go to stuff that I like and want

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Speaker 2: to support, versus ESG where it's like, don't you know,

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Speaker 2: let's take out this stock even though it's not that

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Speaker 2: bad whatever. I don't get why they don't want to

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Speaker 2: play with the names focus on the tangible, yeah, and

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Speaker 2: do more tangible stuff and thematic. It's weird to they

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Speaker 2: haven't done much.

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Speaker 1: They're like by la, like, yeah, it seems like you

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Speaker 1: could get behind that.

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Speaker 2: Yeah, help with la exactly.

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Speaker 3: I don't disagree, but you know, it's interesting. Someone probably

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Speaker 3: paid a lot of money to come up with these

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Speaker 3: really snazzy tickers on some of these, and unless you

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Speaker 3: know exactly what they're doing, you don't get a lot

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Speaker 3: one of the ones I'll point to and we talk

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Speaker 3: about hot sauce. I mean, look, I disagree. I think

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Speaker 3: there is leverage to be had in the UNI ets

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Speaker 3: space and RTAI is a perfect example of that. Right,

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Speaker 3: you know, when rates were jumping up, this is one

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Speaker 3: of the worst performers.

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Speaker 2: Rates eased off a bit last year, it.

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Speaker 3: Was one of the best performers, and it's one of

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Speaker 3: the most levered muni ETFs out there. One year returns

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Speaker 3: almost eleven percent.

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Speaker 2: Okay, so this is just so people don't play the

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Speaker 2: name of it, because I actually didn't know this one

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Speaker 2: rare view tax advantage incoming to you. Yeah, that name

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Speaker 2: is boring. I gotta be honest with you. And you're

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Speaker 2: saying this has leverage in it. Yeah how much? What percent? Right?

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Speaker 3: I think it's up here, like thirty to thirty five percent,

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Speaker 3: just sort of back of the envelope.

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Speaker 1: I'd have to double check that.

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Speaker 2: Yeah, the yield is five percent. That's pretty especially if

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Speaker 2: you get an after tax yield of a little more

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Speaker 2: than that.

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Speaker 1: So there is spice.

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Speaker 2: Yes, okay, Like I said, it's it's all relative, right,

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Speaker 2: This is spicy for.

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Speaker 1: The ghost pepper of New Zealand.

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Speaker 2: Yes, Oh my god, let me look at the volatility here. Yeah.

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Speaker 2: By the way, the volatility is still half the S

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Speaker 2: and P. That's spicy over there. Yeah, it's like a

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Speaker 2: kiddie ride in the equities.

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Speaker 1: Yes, okay, Eric, I want to bring this back to

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Speaker 1: this threat that seems kind of existential. Like if already

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Speaker 1: it's really hard to care about Muni Land for a

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Speaker 1: certain investor or, at least one name Joel, and this

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Speaker 1: taxes emption goes away, how how existential does that make

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Speaker 1: Uni Land?

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Speaker 3: Think about it this way. You know, state and local

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Speaker 3: governments still need to finance billions of dollars a year

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Speaker 3: to keep the lights on right, keep things in good repair,

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Speaker 3: and so if the exemption went away, it just means

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Speaker 3: they're going to be borrowing in the tax will market

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Speaker 3: at higher rates. I don't think they're gonna be borrowing

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Speaker 3: where like Apple or Microsoft issue probably somewhere below that,

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Speaker 3: but significantly more than they are now. And guess what

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Speaker 3: they're passing that cost on to you. They're passing that

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Speaker 3: cost on to mister balchiunis the passing it on to me,

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Speaker 3: you know? And I think that's the underappreciated point here, right.

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Speaker 3: We all sort of benefit from that collective subsidy that's

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Speaker 3: being issued for the top hat and monocle crowd if

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Speaker 3: we sort of want to go back to that analogy,

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Speaker 3: but we're all sort of getting something for that as well,

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Speaker 3: and it's less taxes than it could be. And I

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Speaker 3: think that's sort of the point to really sort of

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Speaker 3: head home with those who are making the decisions in Washington.

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Speaker 2: Man.

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Speaker 1: The lobbying, uh feels like it's going to be very

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Speaker 1: allowed on this one. It's gonna it's gonna be an

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Speaker 1: interesting thing to watch, especially at this moment that we've

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Speaker 1: got a Magna crowd that's taken over uh, you know,

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Speaker 1: the Republican wing and and you know, something like this

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Speaker 1: seems like it'll be an interesting topic of cover station

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Speaker 1: in the year to come. Yeah, Balchinus, any any final thoughts.

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Speaker 2: No, I just wanted to kind of ask Eric as

400
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Speaker 2: an analyst who sees all these ETFs coming out, because

401
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Speaker 2: sometimes he does cover the ETF side of things. Are

402
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Speaker 2: there any sort of out of the box ETF besides

403
00:19:15,840 --> 00:19:18,399
Speaker 2: RTAI that that sort of stand out to you? Is

404
00:19:18,800 --> 00:19:21,840
Speaker 2: is interesting or something that that you might have designed

405
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Speaker 2: yourself if you were initire.

406
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Speaker 3: You know one that sort of comes to mind, and

407
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Speaker 3: it's selfishly, it's a shameless plug for Masters of the Universe.

408
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Speaker 3: It's someone we had on not long ago. You know,

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Speaker 3: Rockefeller Asset Management, and they have a new fund RMOP

410
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Speaker 3: and you know what they're doing is they're getting really

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Speaker 3: down the weeds on the credit side of things. So

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Speaker 3: like twenty twenty one percent of their asset allocation is

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Speaker 3: in charter schools, which is sort of one of the

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Speaker 3: I would say most esoteric areas of community space, you know,

415
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Speaker 3: and then there are other expert as airports. Right, So

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Speaker 3: I really have a blend of this really niche credit

417
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Speaker 3: space and then something everybody's using. And I really sort

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Speaker 3: of like that approach, right, Eric.

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Speaker 1: I've got one final question for you. It's a question

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Speaker 1: that we often ask on trillions at the end. What

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Speaker 1: is your favorite ETF ticker?

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Speaker 3: My favorite one it has to be hid I mean,

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Speaker 3: and I only say that because, look, I mean, I

424
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Speaker 3: don't want to give them a two heart of a time,

425
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Speaker 3: but they were woefully underprepared for COVID, and I think

426
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Speaker 3: it really played out in real time. But you know,

427
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Speaker 3: I think the thing is it brought so much attention

428
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Speaker 3: to the fact that there were high yield muni tfs,

429
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Speaker 3: and I feel like that has sort of, you know,

430
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Speaker 3: in one way, led to the growth of all these

431
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Speaker 3: new products coming online right now.

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Speaker 2: And let me say one thing HYD in COVID to

433
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Speaker 2: me is the ticker I bring up all the time

434
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Speaker 2: Joel to explain that if you put private equity were

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Speaker 2: private credit in an ETF and it's like fifteen to

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Speaker 2: twenty percent of the fund, that let's just say that

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Speaker 2: that person is illiquid, it probably still wouldn't be trading

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Speaker 2: it the discount that was. In other words, I think

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Speaker 2: HYD shows that you can have people have a hybrid

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Speaker 2: closed in fund ETF situation, they'd still prefer that then

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Speaker 2: going to the mutual fund or interval fund. That's my

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Speaker 2: theory on this and why it's okay and this will work.

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Speaker 2: I use HID all the time.

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Speaker 3: Yeah, HYD had to suffer so we can have nice

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Speaker 3: things today.

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Speaker 2: Yes, I like that. I may steal that for a headline.

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Speaker 1: All right, Eric Kazatski, thanks for making munis not so boring. Yeah,

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Speaker 1: thanks for having me and for being a guest on Trillions.

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Speaker 1: Long overdue, we'll have you back. Thanks for listening to

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Speaker 1: Trillions until next time. You can find us on the

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Speaker 1: Bloomberg Terminal, Bloomberg dot com, Apple Podcasts, Spotify, or wherever

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Speaker 1: else you'd like to listen. We'd love to hear from you.

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Speaker 1: We're on Twitter. I'm at Joel Webbers Show. He's at

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Speaker 1: Eric Baultness. This episode of Trillions was produced by Magnus Hendrickson. Bye.

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Speaker 2: This is the this is