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Speaker 1: We are Trillions. I'm Joel Webber and I'm America Tunis.

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Speaker 1: We have a lot of people join us on trillions,

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Speaker 1: But in the e t F world, there's very few

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Speaker 1: players as big as black Rock. Yeah, you know, we

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Speaker 1: dive into these little corners of the e t F

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Speaker 1: area and there's such great stories in some of the

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Speaker 1: smaller areas and issues. But sometimes you just got to

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Speaker 1: talk to King Kong or Godzilla and really, you know,

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Speaker 1: touch base with them because they are so dominant. And

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Speaker 1: black Rock is you know, the king of the hill,

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Speaker 1: that's right, and the others being uh, Vanguard's also very big,

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Speaker 1: state streets, really big. But Eric, what what is it

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Speaker 1: about black rock and their approach to the ETF business?

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Speaker 1: So one time I wrote an article that never got published,

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Speaker 1: probably for the best. I sometimes write stuff that editors like,

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Speaker 1: you can't put this out um where I compared every

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Speaker 1: e t F fisher er to like a classic rock band,

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Speaker 1: and I gave I shares to me or black rock

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Speaker 1: was the Beatles, because you know how they covered every

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Speaker 1: single genre. You know, they covered folk, rockabilly, they even

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Speaker 1: had a little heavy metal blues. The Beatles would basically

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Speaker 1: listen to anything and be able to recreate that sound

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Speaker 1: and make it great. And so they had such an

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Speaker 1: eclectic sound across their ten years of existence or twelve years.

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Speaker 1: To me, that's I Shares. They are trying to be

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Speaker 1: everything to everybody. They have a T F S that

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Speaker 1: cover just about every single thing out there. They are

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Speaker 1: looking to be a completely full service, full product shop.

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Speaker 1: They've got thirty eight percent market share in the U

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Speaker 1: S E. T F space and Vanguard is although climbing fast,

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Speaker 1: so they're constantly battling with Vanguard. But then you take

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Speaker 1: a bigger step back in black Rock is the biggest

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Speaker 1: asset manager in the world with seven point four trillion.

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Speaker 1: Now you said something in there that UM for the

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Speaker 1: uninitiated can be a little confusing. There's black Rock and

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Speaker 1: there's ICE Shares. What what the difference between those two brands? Right,

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Speaker 1: So black Rock has a lot going on UM I

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Speaker 1: forget the percentages, but I Shares is UM you know,

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Speaker 1: below fifty of their UM revenue and assets. But it's

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Speaker 1: I believe one of the fastest growing areas. Vanguard is

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Speaker 1: the same way UM E T S. If if you're

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Speaker 1: successful et f ISHO are guaranteed. That's one of the

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Speaker 1: fastest growing areas for assets. But black Rock is a

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Speaker 1: much bigger company. They serve, they have institutional management things

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Speaker 1: like separate accounts that you don't even hear of. They

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Speaker 1: have mutual funds UM, they even are starting to build

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Speaker 1: up tech solutions. There are very creative, dynamic company, and

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Speaker 1: what I always say about them is that they're the

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Speaker 1: one company I feel that is able to go tote

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Speaker 1: to tote to Vanguard, and Vanguard with that mutual innerstive

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Speaker 1: structure is very difficult to compete with UM. That structure

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Speaker 1: makes them lethal. But Rock, to me, has made a

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Speaker 1: commitment to get into playing shape for what I call

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Speaker 1: the Vanguardian future, and they've done a great job and

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Speaker 1: they're able to really hold their own against Vanguard. And

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Speaker 1: of course, black Rock acquired I Shares from Barkley more

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Speaker 1: than a decade ago now, and that was sort of

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Speaker 1: the firm's entry into the et F space. I always

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Speaker 1: thought that when black Rock bought the I Shares brand

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Speaker 1: from Barkley's back then, it was like the Louisiana purchase

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Speaker 1: of asset Management. I'm still stunned that Barkley's would sell

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Speaker 1: it like that, But then again, Barkley's I believe bought

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Speaker 1: it back in the day for a ridiculously low amount

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Speaker 1: from I think Morgan Stanley, which I believe they were

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Speaker 1: called Webbs before that. And this is the early nineties,

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Speaker 1: the really frontier era of e t F. So I

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Speaker 1: shares has a long history going all the way back.

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Speaker 1: But what made the black Rock purchase of I shares

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Speaker 1: so good in my opinion, is they bought a lot

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Speaker 1: of the most liquid ETFs in every category. So black

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Speaker 1: Rock has a ton of the most liquid ETFs in

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Speaker 1: certain category is and that gives them huge advantage, a

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Speaker 1: little pricing power, and again it makes him a formidable

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Speaker 1: competitor to Vanguard or anybody else. Joining us from black

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Speaker 1: Rock Armando Senra, he's the managing director of black Rock,

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Speaker 1: as well as Annie Massa, who's a asset management reporter

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Speaker 1: with Bloomberg. This time on Trillion, a bunch of really

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Speaker 1: important questions for black Rock. Armando, thanks so much for

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Speaker 1: joining us on trillions. Great to be here. You guys

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Speaker 1: are the biggest tt F fishure and I want to

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Speaker 1: I want to start this going back to the month

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Speaker 1: of March pre fed right when there's no bids on

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Speaker 1: some treasuries. The market is completely in haywire mode. UM

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Speaker 1: E t f s traded five point five trillion in March.

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Speaker 1: That's normally what they trade in a quarter, right, so

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Speaker 1: they were really put through the ringer. You had some

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Speaker 1: bond price, bondy t F prices eating from the navy.

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Speaker 1: I could imagine that your your phone was ringing off

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Speaker 1: the hook. Talk to us about what it was like

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Speaker 1: in March for you as the issuer of the E

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Speaker 1: t f s, a lot of which were the most

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Speaker 1: traded at the time. Yeah, thank you, Right, that's a

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Speaker 1: that's a great question. It seems like March was a

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Speaker 1: million years ago, but it's it's not that long ago,

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Speaker 1: right that I've been in the industry for twenty six years,

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Speaker 1: and I thought that I had seen a lot of

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Speaker 1: different market events, but I've never seen anything like what

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Speaker 1: we went through in March. And you know, beyond just

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Speaker 1: what was happening in the financial markets, just the the

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Speaker 1: human tragedy of everything that was happening around the world,

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Speaker 1: and obviously the impact that was having on our employees,

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Speaker 1: our clients, and so many people in the globe. UM.

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Speaker 1: You know, definitely that was from a market's perspective, There

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Speaker 1: was a tremendous amount of activity and that included, you know,

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Speaker 1: just the volumes, like the way you describe them, were

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Speaker 1: off the chart. And if you just look at the

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Speaker 1: equity trading volumes whereas high as for you one percent,

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Speaker 1: I mean, then then they ended up normalizing back to

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Speaker 1: the twenties. But that there was a tremendous amount of

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Speaker 1: outreach two clients. There was a tremendous amount of effort

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Speaker 1: in within the portfolio engineering which is how we call

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Speaker 1: our portfolio managers for UM, for our A t f S,

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Speaker 1: really making sure that everything works and that we were

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Speaker 1: able to deliver to clients the quality that they come

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Speaker 1: to expect from I Suresh. And also you know, you

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Speaker 1: you started we were talking about the discounts to an

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Speaker 1: ad A tremendous amount of outreached two clients, both institutional clients,

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Speaker 1: wealth clients, really working with them and helping them understand

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Speaker 1: exactly what it is that was happening, what they we're

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Speaker 1: seeing in the screens. And I think that you referred

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Speaker 1: to an event that for us it was actually proved.

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Speaker 1: It was kind of like the ultimate proof point of

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Speaker 1: in this case. I think that you're probably referring to

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Speaker 1: fixing committ as of the fact that fixing commydas were

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Speaker 1: passing the past that we're working uh, and they were

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Speaker 1: providing two investors the utility UH that that we always

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Speaker 1: talked about, that we're providing liquidity that we're provided providing

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Speaker 1: transparency in pricing. So all that was happening now the experience,

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Speaker 1: depending on what you were sitting, you were all of

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Speaker 1: a sudden seeing a big discount to Enevy that was

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Speaker 1: ultimately the result of the A t F providing a

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Speaker 1: glimpse to the actual pricing of the underlying securities because

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Speaker 1: the the E t F was trading a lot more

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Speaker 1: than the underlying box Amonda. One thing that really helped

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Speaker 1: calm the nerves fixed in kind of E t F

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Speaker 1: markets in that very tribulent period was knowing that the

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Speaker 1: FED was stepping into backstop credit markets. And I wonder

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Speaker 1: what do you think if you re around the clock

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Speaker 1: and the FED hadn't stepped in, maybe as fast or

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Speaker 1: with as much force as it did. What do you

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Speaker 1: think might have happened with authorized participants and market participants?

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Speaker 1: How do you think things might have gone if the

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Speaker 1: FED hadn't acted as quickly as it did. Sure, Annie,

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Speaker 1: I think that Look, if I think that what is

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Speaker 1: most important to me is when you think about the

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Speaker 1: events in March UH and when you think about what

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Speaker 1: was happening with with credit markets. Ultimately e t f

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Speaker 1: s were delivering the performance, They were delivering the liquidity,

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Speaker 1: and I think that that was validating the instrument as

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Speaker 1: a great way to gain exposure to the bond market.

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Speaker 1: And I think that whether it's the FED, whether it's

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Speaker 1: central banks in all the places around the world, whether

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Speaker 1: it's institutional investors, whether it's wealth investors, I think that,

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Speaker 1: you know, the performance that e t f s, that

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Speaker 1: fixing committee s were delivering is what gives the ultimate

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Speaker 1: validity to the instrument. So I think that we can

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Speaker 1: speculate what would have happened if they fed that I

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Speaker 1: don't know. What I can tell you is that it

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Speaker 1: was not. I think that e t f s were

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Speaker 1: performing before the FED step in UH and I think

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Speaker 1: all theo at me, Yes, the father step in, and

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Speaker 1: obviously that added validity due to the instrument. But they

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Speaker 1: ultimately investors, both institutional investors and wealth investors that were

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Speaker 1: getting the benefit that we have been talking about for

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Speaker 1: many years around fixing commuts. The mutual fund world is

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Speaker 1: was I felt wasn't covered as much. But active fixed

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Speaker 1: income mutual funds it's seen ninety billion dollars and outflows

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Speaker 1: two straight weeks. Everybody thinks e t f s would

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Speaker 1: will freeze up in this kind of situation, but we

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Speaker 1: speculated that if these fixed income mutual funds, which are

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Speaker 1: much bigger, had to sell bonds into an a liquid

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Speaker 1: market and then had more outflows, it would create a

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Speaker 1: downward spiral where you might actually have mutual funds freezing up,

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Speaker 1: halting redemptions, and it could have just gotten really nasty

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Speaker 1: for a while before it got better. We can spend

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Speaker 1: a lot of time speculating many things that could have

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Speaker 1: happened on how they could have been I think ultimately,

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Speaker 1: I think, look, March was a moment of like stress

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Speaker 1: that we have never seen before March. Whenever I was

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Speaker 1: in similar forms like this one, I was talking about

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Speaker 1: what happened in December of two thousand nineteen, or we

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Speaker 1: were talking about what was happening in different crisis is

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Speaker 1: in the last ten years, UH and throughout all of those. Ultimately,

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Speaker 1: these instruments work and if you're an investor and you

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Speaker 1: were looking for liquidity, and all of a sudden, you

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Speaker 1: look at instruments like l QD was trading was changing

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Speaker 1: hands ninety thousand times. On March twelve, the five top

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Speaker 1: holdings inside the LQUV traded hands thirty seven times. You

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Speaker 1: look at h y G, that was a hundred and

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Speaker 1: sixty eight thousand times each day, uh, during the months

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Speaker 1: of March. So again you know, like you look at

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Speaker 1: the utility that thep have provided to the investor and

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Speaker 1: ultimately provided that liquidity when they were looking for liquidity.

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Speaker 1: Now the discount to n a V. Look, if you

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Speaker 1: needed the liquidity, you could have it. It was giving

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Speaker 1: you the pricing that you can get at that point.

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Speaker 1: It was providing pricing and it was providing liquidity. And

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Speaker 1: I think, look, that's why we've seen the tremendous flows

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Speaker 1: and no, Eric, you follow it closely, we've seen the

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Speaker 1: tremendous influence into fixing comedias globally. Right. So I'm not

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Speaker 1: going to speculate what would have happened at this Ultimately,

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Speaker 1: I leave it up to you to write that. Okay,

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Speaker 1: fair Um, So one difference about sort of this crisis

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Speaker 1: and and moment of stress has been black Rock has

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Speaker 1: actually become very close with the FED in terms of

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Speaker 1: facilitating UM some of the nuances of what's happening in

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Speaker 1: the et F marketplace. You know, any wrote about that

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Speaker 1: for for us at Business weekn We actually created a

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Speaker 1: piece of art that looks like a government seal, excepted

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Speaker 1: it as Department of black Rock on it. And I'm curious, Armando, like,

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Speaker 1: what do you guys think of that? Look. I think

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Speaker 1: that you know as Matt about the FED program as

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Speaker 1: I do. I think that you know very well that

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Speaker 1: our financial markets advisory group in within black Rock is

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Speaker 1: a completely independent group separated. They have their own traders,

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Speaker 1: their own portfolio managers, is completely independent from from the

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Speaker 1: rest of black Rocks. So I mean, like, I know

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Speaker 1: as much about it as you do. I think that ultimately,

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Speaker 1: when you look at the flows, I think that sometimes

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Speaker 1: that gets lost. Uh. They have been obviously, you know,

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Speaker 1: there's a FED purchase program. Uh some of the dfs

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Speaker 1: that they have thought have been black Rock UM. But

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Speaker 1: ultimately that's just a small piece compared to the overall

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Speaker 1: flow that we have seen coming in into fixing communts. Yeah,

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Speaker 1: and you know it's interesting. I look at the FEDS

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Speaker 1: E t F portfolio and to me, it looks like

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Speaker 1: an E t F strategists portfolio, not what you typically

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Speaker 1: see from a large institution. So there's an E t

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Speaker 1: F no how because you've got like twelve thirteen ETFs

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Speaker 1: in here, including stuff like U, S, H, y A,

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Speaker 1: n g L, stuff that's deeper in the toolbox that

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Speaker 1: we we like, but like a Yale universe, so you

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Speaker 1: would never go that deep. So it's interesting to see

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Speaker 1: the FED do this, and they they didn't really create

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Speaker 1: any disruptions in trading, so I thought it was pretty

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Speaker 1: much Scalpel level precision in how they did this. I'll

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Speaker 1: pass it off to Annie to talk for flows. Yeah, unflows, Armando,

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Speaker 1: So I think that, Um, I'm sure GTFS took in

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Speaker 1: about fifty one billion UM in that flows last quarter.

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Speaker 1: What was driving that? Like underneath that broader figure, what

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Speaker 1: kinds of products were driving those? Yeah? I mean, look,

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Speaker 1: it's um the last couple of months, it's been great

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Speaker 1: to see the flows back. I mean now you're to

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Speaker 1: date were close to sixty UM. Just the last month,

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Speaker 1: it's been close to twenty billion in flows. Uh. If

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Speaker 1: if you see the beginning of the year. Obviously there

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Speaker 1: was well, the beginning of the year started as what

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Speaker 1: could have been a record year of flows, and then

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Speaker 1: obviously you know, market events derail that, especially you know

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Speaker 1: like market driven instruments, right, the type of instruments that

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Speaker 1: when investors are trying to take risk of the table

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Speaker 1: they use and you know, we have the breadth of

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Speaker 1: our product really provides the utility to investors. I think

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Speaker 1: that you've seen tremendous growth in fixing committeeps. That is

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Speaker 1: we already talk a lot about it, but that that

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Speaker 1: has been one of the the key areas of flows.

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Speaker 1: You've seen tremendous growth, also sustainable just in the in

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Speaker 1: the first quarter more than the whole year of last year,

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Speaker 1: and we are in record flows. Our Factors franchise was

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Speaker 1: pretty stable given the the outlaws that we saw overall

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Speaker 1: in Factors. So I would say when when you think

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Speaker 1: of the strategic segments, that that what we call is

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Speaker 1: to the segments of black Rock, a lot of strength

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Speaker 1: beginning with fixing committees. Since then is beginning to change, right,

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Speaker 1: You're beginning to see more equity flows, You're beginning to

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Speaker 1: see what would be the beginning of flows back into

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Speaker 1: international markets, primarily developed markets, Like you're beginning to see

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Speaker 1: investors putting money back on international um. You know, specific

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Speaker 1: countries at times, like you're beginning to see how investors

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Speaker 1: are more some of the flows are more specific as

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Speaker 1: to the country that they are going in as supposed

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Speaker 1: to broad UH international exposure, Like we had significant flows

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Speaker 1: into Germany our Black Rock Investment Institute UH started turning

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Speaker 1: positive to UH to Europe on the back of a

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Speaker 1: better response from COVID and the beginning of restarting of

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Speaker 1: the economy. So you're beginning to see those flows coming

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Speaker 1: in in the last few weeks as well. So Armando, UM,

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Speaker 1: I want to ask a little bit about competition. UM.

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Speaker 1: You know, I Shares such a story brand in the

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Speaker 1: e t F space, but not the only one UM.

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Speaker 1: And you know Vanguard in particular has become Between I

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Speaker 1: Shares and Vanguard. That's something like Eric says, seventy two

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Speaker 1: percent of e t F flows in the past three years.

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Speaker 1: You guys have really just become these these behemoths really

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Speaker 1: in the space. And I'm wondering who's King Kong and

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Speaker 1: Who's Godzilla. That's up to you to decide. There there there.

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Speaker 1: They're both big, So what's the difference. Look, I mean

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Speaker 1: I think that our we have a very differentiated business model.

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Speaker 1: I mean I think that I'll go back to what

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Speaker 1: I said at the beginning. You know, I shares is

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Speaker 1: not one thing ultimately. Uh. You know, when you look

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Speaker 1: at how we think of product segments, we have breath

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Speaker 1: of product, different uses for different investors. We have a

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Speaker 1: very strong institutional um client base. Uh, and doesn't take difference.

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Speaker 1: And you know, you clearly see that volatility when you

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Speaker 1: have moments where is a risk on or risk off.

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Speaker 1: But again, you know, like I think that is our

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Speaker 1: differentiative business model to provide a breath of product across

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Speaker 1: different investors and different uses. Uh. That's that's what we do.

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Speaker 1: And you can ask bangor about what they do, but

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Speaker 1: that's at the core of what we're intending to do

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Speaker 1: is really facilitate better portfolio construction through our thrower outprea.

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Speaker 1: I call the E T F industry the terro dome.

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Speaker 1: It is not for the faint of heart. And you know,

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Speaker 1: this year, Vanguard has a little bit of a lead

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Speaker 1: and flows although they've been doing some shifting from their

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Speaker 1: mutual fund to their e t F, So I'd say

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Speaker 1: maybe thirty billion ish might be that maneuver the rest natural.

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Speaker 1: But anyway, you guys are always neck and neck, right,

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Speaker 1: Um you cut the fee in I VV which is

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Speaker 1: your smp f F I think a month ago to

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Speaker 1: three basis points to tayvoo, I guess just talk a

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Speaker 1: little bit about what's behind that, and just more generally

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Speaker 1: the idea of competing against the vanguard or competing against

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Speaker 1: you guys and getting into this playing shape where you

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Speaker 1: have to sort of cannibalize yourself to survive, and how

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Speaker 1: useful that might be in ten years when you know,

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Speaker 1: post a bear market where a lot of consolidation, Do

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Speaker 1: you look at it that way? Do you look at

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Speaker 1: it is like getting yourself into the best possible shape

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Speaker 1: for a rougher future for asset management. When you think

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Speaker 1: about our pricing, we've been really consistent. We have been

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Speaker 1: very vocal around we're going to invest in pricing somewhere

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Speaker 1: around one and a half to two and a half

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Speaker 1: per center of revenue. But we invest for growth. So

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Speaker 1: when we invest in pricing is for the potential of

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Speaker 1: growth more than will overcome the loss of revenue of

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Speaker 1: the cat so when you look at what we did

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Speaker 1: in IVV a few years ago, we tripled the size

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Speaker 1: of the fund since then. When you look at what

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Speaker 1: we are doing in IVV now, again, we're doing it

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Speaker 1: because we want as UM the IVV a spl if

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Speaker 1: I founder the exposure to be the largest one in

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Speaker 1: the world. So we do it for growth. UM. So

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Speaker 1: I think that every you know, ultimately, when you look

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Speaker 1: at the industry is extremely competitive, all IPPs. When you

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Speaker 1: look at the alternatives in the active world, epps are

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Speaker 1: extremely competitive. So again, you know, I think that you've

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Speaker 1: gotta be thinking about our pricing right now. Whenever we

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Speaker 1: cat is because we want to grow. Over the last

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Speaker 1: few years, we have returned back to the investors somewhere

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Speaker 1: around six d million dollars in UM and fed cats

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Speaker 1: in voluntary ficcats that we have introduced, and every single

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Speaker 1: one of those moves was intended to grow our asset

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Speaker 1: dates and our revenue base. Armando. One thing that has

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Speaker 1: been highlighted in the past couple of quarters are flows

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Speaker 1: into E S G E T s and in particular

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Speaker 1: in the sustainable suite of products at black Rock, and

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Speaker 1: it's something where I think mentioned in his letter at

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Speaker 1: the top of the year about wanting to double the

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Speaker 1: number of I shares M E s G, E T S.

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Speaker 1: So what do you think is behind those flows? Is

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Speaker 1: there anything more than meets the I with just customer

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Speaker 1: preferences shifting and then as you think about what to

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Speaker 1: develop and what hasn't already been picked over as far

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Speaker 1: as new products in the sustainable space, you know where

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Speaker 1: is your head up sustainable and E s G we're

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Speaker 1: extremely excited about at the firm and also in within

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Speaker 1: ashres um. You mentioned flows. I think that this year

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Speaker 1: alone as it flows were around eleven billion. If you

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Speaker 1: look at the whole year of two thousand and nineteen

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Speaker 1: were around five billion for the full year UH. And

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Speaker 1: we already thought that Lazio was an inflection point and

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Speaker 1: all the point that that I think it's interesting is

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Speaker 1: when you look at this year, Europe was heading flows

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Speaker 1: into sustainable investing overall, not just TPFs UH. This year

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Speaker 1: actually in within a hears we're seeing more flows coming

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Speaker 1: into E s G from US investors. Why is that happening?

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Speaker 1: I think that they change in the narrative and they've

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Speaker 1: been more clear around investing and sustainable investing in E

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Speaker 1: s G is not about values. Uh about value, is

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Speaker 1: about the recognition that ultimately E s G related risks

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Speaker 1: in a portfolio will have a significant impact in asset

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Speaker 1: pricing in capital ocasions. I think that it's also interesting

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Speaker 1: some of the things that we've seen this year. There

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Speaker 1: was a lot of emphasis on on the E on climate.

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Speaker 1: I think that this year that has also expanded to

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Speaker 1: more focused from investors, both institutional and wealth investors on

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Speaker 1: the S and the G, society and governance, and especially

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Speaker 1: on the back of some of the events that you've

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Speaker 1: seen this year, how companies treat their employees, the composition

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Speaker 1: of their of their boards, the diversity in the firm.

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Speaker 1: I think that there's these are factors that more and

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Speaker 1: more investors will focused on. Okay, Ormando, I am the

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Speaker 1: s G skeptic. The three things I would push back

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Speaker 1: on s G in general are with the flows. I

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Speaker 1: think the media characterizes it as like millennials have E

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Speaker 1: s G fever, But half of the flows are our

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Speaker 1: model portfolios, which they still count. But it's one hand

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Speaker 1: moving the money there, and the institutional seating again still counts.

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Speaker 1: Everything counts in the terra dome, but half his grassroots organic,

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Speaker 1: and that's not a ton given the hype. Second point,

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Speaker 1: E s G largely is a bet on tech and

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Speaker 1: against the energy. So it's almost like the mouth of

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Speaker 1: an alligator. If energy has a supply shock, E s

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Speaker 1: G could be heard and will people be disappointed by that?

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Speaker 1: And then the third issue is E s G U,

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Speaker 1: which is the biggest one, that's your I think it's

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Speaker 1: like seven billion at this point. Um you know it

400
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Speaker 1: owns Facebook and Exon. It's sort of like diet E

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Speaker 1: s G, which is makes sense because you might not

402
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Speaker 1: want to have too much tracking, or at least advisors

403
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Speaker 1: are tend to not go for that. But then do

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Speaker 1: people who want E s G really want to own

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Speaker 1: Facebook and Xon? Let me just begin at the beginning.

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Speaker 1: So model portfolios, Yes, I mean I think that and

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Speaker 1: it goes back to what I said earlier. I think

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Speaker 1: that is about how do you think of E s

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Speaker 1: G risks have your building a portfolio? And this is

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Speaker 1: why you see E s G now being part of

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Speaker 1: model profolires. And this is not only whether it's our

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Speaker 1: black Rock model proferlires. These our third party model porfolios.

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Speaker 1: You see a lot more activity and this is why

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Speaker 1: we are also accelerating the development of new products. And

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Speaker 1: like I think any mentioned, we committed it to triple

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Speaker 1: our product base in e s G because we need

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Speaker 1: to create more building blocks so portfolio model portfolio builders

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Speaker 1: can have the building tools to increase their sustainable allocations

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Speaker 1: in their proferlio. So, yes, you see that, and that's

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Speaker 1: a good thing, by the way. The second one in

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Speaker 1: terms of the the the client base, I've never been

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Speaker 1: a believer in thinking that it is just millennials. I

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Speaker 1: think that there is a higher awareness of e s

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Speaker 1: G and importance to society. But again, this is not

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Speaker 1: about values. I think that there's a play there. I

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Speaker 1: think that there are some people that are going to

427
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Speaker 1: want to invest according to their values, and we want

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Speaker 1: to provide that choice. But again I would fall back

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Speaker 1: to UH. What I would say is a less polarizing conversation,

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Speaker 1: which is this is about returns. This is about e

431
00:24:08,640 --> 00:24:12,120
Speaker 1: SD related risks. This is about how climate change will

432
00:24:12,160 --> 00:24:14,960
Speaker 1: have an impact on the performance of companies that may

433
00:24:14,960 --> 00:24:19,280
Speaker 1: be issuing mortgages in areas that may be flooded, or

434
00:24:19,320 --> 00:24:21,960
Speaker 1: if you are a company that is highly reliant on

435
00:24:22,119 --> 00:24:25,600
Speaker 1: water supplies, a better use and more efficient use of

436
00:24:25,800 --> 00:24:29,199
Speaker 1: your water of how you use water UM, you know

437
00:24:29,280 --> 00:24:32,520
Speaker 1: you will be a more efficient and more profitable company

438
00:24:32,520 --> 00:24:35,640
Speaker 1: that will do better. Companies that are able to attract

439
00:24:35,680 --> 00:24:38,840
Speaker 1: and retain the best talent because of their practices will

440
00:24:38,920 --> 00:24:41,159
Speaker 1: do better. So again this you know, if you go

441
00:24:41,280 --> 00:24:45,760
Speaker 1: back to the narrative around not values, but really investment

442
00:24:45,920 --> 00:24:49,159
Speaker 1: risk and investment returns, I think that that, yes, millennials

443
00:24:49,200 --> 00:24:52,280
Speaker 1: have been coming in, but you've also seen institutional investors.

444
00:24:52,640 --> 00:24:54,600
Speaker 1: Some of the largest investors that we've had in the

445
00:24:54,680 --> 00:24:58,399
Speaker 1: last year have intention plans. You're beginning to see asset

446
00:24:58,480 --> 00:25:02,600
Speaker 1: owners across the blow beginning to change their benchmark to

447
00:25:02,760 --> 00:25:06,680
Speaker 1: increase allocations to E s g UM. Then the final

448
00:25:06,720 --> 00:25:08,320
Speaker 1: one is is one that we have to do a

449
00:25:08,320 --> 00:25:10,639
Speaker 1: better job Eric, and I agree with you. I mean

450
00:25:10,680 --> 00:25:12,880
Speaker 1: I think that them and we are trying, and we're

451
00:25:12,880 --> 00:25:16,160
Speaker 1: putting a lot of energy in education to really help

452
00:25:16,240 --> 00:25:19,440
Speaker 1: investors understand, you know, how do you build a portfolio

453
00:25:19,560 --> 00:25:22,359
Speaker 1: with sustainable, how do you investment sustainable? And the range

454
00:25:22,359 --> 00:25:25,560
Speaker 1: of sustainable offering that we have, how does it work.

455
00:25:25,840 --> 00:25:28,639
Speaker 1: So we have a range of products that we're launching

456
00:25:28,720 --> 00:25:32,400
Speaker 1: call Advance that's kind of like the most pure form

457
00:25:32,520 --> 00:25:35,560
Speaker 1: of E s G investing where you're gonna have extensive

458
00:25:35,640 --> 00:25:40,879
Speaker 1: screen up screens, UM, you're gonna have UM eliminate the

459
00:25:41,119 --> 00:25:46,520
Speaker 1: entire value chain of certain industries and certain types of investments.

460
00:25:46,760 --> 00:25:49,720
Speaker 1: Then you have another range of products that we have

461
00:25:49,840 --> 00:25:55,760
Speaker 1: called aware, where you're being aware of sustainable metrics, but

462
00:25:55,840 --> 00:25:59,960
Speaker 1: you're still investing close to the benchmark, so less tracking area.

463
00:26:00,440 --> 00:26:03,400
Speaker 1: So the offering that you refer to is an offering

464
00:26:03,480 --> 00:26:07,359
Speaker 1: that you kiptin into sustainable, but you want to still

465
00:26:07,440 --> 00:26:12,679
Speaker 1: have uh the same similar returns to the benchmark. So

466
00:26:12,800 --> 00:26:17,199
Speaker 1: armando UM for all your efforts and and the you know,

467
00:26:17,280 --> 00:26:19,840
Speaker 1: the good intentions behind where you're trying to go with this,

468
00:26:20,000 --> 00:26:22,719
Speaker 1: you know, a crisis hits and everybody turns into uh

469
00:26:22,960 --> 00:26:25,840
Speaker 1: robin Hood day traders, it seems, and you know, we

470
00:26:25,840 --> 00:26:27,800
Speaker 1: we actually pulled some of the numbers and we were

471
00:26:27,880 --> 00:26:31,879
Speaker 1: kind of shocked. Um, but according to these numbers that

472
00:26:31,920 --> 00:26:34,760
Speaker 1: we saw, I Shares is not in the top twenty

473
00:26:35,000 --> 00:26:37,880
Speaker 1: of of e t f s that are being traded

474
00:26:38,560 --> 00:26:41,840
Speaker 1: on robin Hood. And was curious if there was one

475
00:26:41,880 --> 00:26:43,880
Speaker 1: product you could get into that top twenty, what would

476
00:26:43,880 --> 00:26:47,439
Speaker 1: it be. The last thing that I think that we

477
00:26:47,480 --> 00:26:51,639
Speaker 1: would want is to promote day trading. I think that

478
00:26:51,680 --> 00:26:54,960
Speaker 1: if you look at the DNA of black Rock, our company,

479
00:26:55,200 --> 00:26:57,480
Speaker 1: I mean, how many letters have you seen from Larry

480
00:26:57,520 --> 00:27:01,600
Speaker 1: about long term missive uh and the importance of staying invested,

481
00:27:01,680 --> 00:27:04,399
Speaker 1: the importance of portfolio construction. I mean, I think that

482
00:27:04,720 --> 00:27:07,800
Speaker 1: talking about their trading will be going back, going back

483
00:27:07,840 --> 00:27:11,320
Speaker 1: to Jurassic Park. I mean, it's like everything that we're

484
00:27:11,359 --> 00:27:16,080
Speaker 1: talking to investors about is laun terminism, stay invested. I mean,

485
00:27:16,119 --> 00:27:18,439
Speaker 1: like even the offering when we build that we're offering,

486
00:27:18,560 --> 00:27:22,439
Speaker 1: Like if you think about our thematics offering, the megatrends offering,

487
00:27:23,359 --> 00:27:25,199
Speaker 1: one of the things that we're thinking around that is

488
00:27:25,240 --> 00:27:28,760
Speaker 1: how do we keep people invested? So through those teams, Uh,

489
00:27:29,160 --> 00:27:32,800
Speaker 1: one of the main benefits is that hopefully through the

490
00:27:32,880 --> 00:27:35,919
Speaker 1: lens of understanding the team and having kind of like

491
00:27:35,920 --> 00:27:39,239
Speaker 1: a connection. If you like self driving cars, h, if

492
00:27:39,280 --> 00:27:42,960
Speaker 1: you like autonomous vehicles and and electric vehicles, this is

493
00:27:43,000 --> 00:27:44,719
Speaker 1: one thing that you can invest in and you can

494
00:27:44,800 --> 00:27:48,480
Speaker 1: stay invested because we believe by staying invested people will

495
00:27:48,520 --> 00:27:51,440
Speaker 1: have better returns. The rest is just gambling. So we're

496
00:27:51,440 --> 00:27:55,080
Speaker 1: not gonna get into that. And let me um talk

497
00:27:55,119 --> 00:27:57,800
Speaker 1: a little bit about the the bigger picture here, which

498
00:27:57,840 --> 00:28:01,560
Speaker 1: is what we had Martin Small, who it's your predecessor, right,

499
00:28:01,960 --> 00:28:05,080
Speaker 1: and we asked him what's the breakdown of E t

500
00:28:05,200 --> 00:28:08,480
Speaker 1: F users by assets? So in other words, institution advisor

501
00:28:08,520 --> 00:28:11,480
Speaker 1: and do it yourself retail. And I believe, don't quote me,

502
00:28:11,520 --> 00:28:13,840
Speaker 1: it was in the ballpark of you know, advisors of

503
00:28:13,920 --> 00:28:16,800
Speaker 1: the bulk institutions, a small slice and then do it

504
00:28:16,800 --> 00:28:20,760
Speaker 1: yourself retail. I think he said it was like Robin Hood.

505
00:28:20,920 --> 00:28:22,879
Speaker 1: We've seen a couple of products kind of just skip

506
00:28:22,920 --> 00:28:25,800
Speaker 1: the advisor and just be hits on Robin Hood. Um,

507
00:28:25,880 --> 00:28:28,320
Speaker 1: do you see that channel growing? We're more and more

508
00:28:28,359 --> 00:28:30,400
Speaker 1: people just do it themselves. Do you see that ten

509
00:28:31,359 --> 00:28:35,280
Speaker 1: eating into one of the other two areas? Those those

510
00:28:35,280 --> 00:28:38,560
Speaker 1: percentages that Marktin talked to you about haven't really changed

511
00:28:38,600 --> 00:28:41,720
Speaker 1: that much because you know, ultimately, yes, the direct has

512
00:28:41,720 --> 00:28:44,840
Speaker 1: been increasing, but we've seen tremendous growth in the institutional space,

513
00:28:44,960 --> 00:28:48,920
Speaker 1: like even this year for instance, from a flow perspective,

514
00:28:49,080 --> 00:28:51,960
Speaker 1: we've seen great growth because now we have more asset

515
00:28:52,000 --> 00:28:56,200
Speaker 1: managers and massive downers utilizing fixing comediev's to replace their

516
00:28:56,200 --> 00:28:59,200
Speaker 1: individual holdings or bombs. I think we have a very

517
00:28:59,240 --> 00:29:03,480
Speaker 1: strong commitment to advisors. It has worked incredibly well for us.

518
00:29:03,640 --> 00:29:06,600
Speaker 1: I think direct will continue to increase, but overall the

519
00:29:06,600 --> 00:29:10,080
Speaker 1: percentages haven't really changed. At the beginning of this year,

520
00:29:10,120 --> 00:29:12,040
Speaker 1: I went to an e t F conference and everyone

521
00:29:12,120 --> 00:29:14,040
Speaker 1: was like, oh, you know, it's January. They're like, oh,

522
00:29:14,120 --> 00:29:17,360
Speaker 1: this is the year of like the active non transparent

523
00:29:17,560 --> 00:29:21,840
Speaker 1: ETS and like it turns out is a year of

524
00:29:21,880 --> 00:29:24,840
Speaker 1: a lot of different stuff. But nevertheless, you guys are

525
00:29:24,880 --> 00:29:28,400
Speaker 1: pursuing UM active non transparence of your own. I wonder

526
00:29:28,400 --> 00:29:30,240
Speaker 1: if you could talk to us a little bit about

527
00:29:30,800 --> 00:29:33,600
Speaker 1: UM where you see those kinds of products going. What

528
00:29:33,760 --> 00:29:35,440
Speaker 1: you know, you're in a quiet period for the ones

529
00:29:35,480 --> 00:29:37,960
Speaker 1: that you filed for, but how big of an opportunity

530
00:29:38,000 --> 00:29:40,400
Speaker 1: do you see it actually being? And like, has this

531
00:29:40,680 --> 00:29:45,000
Speaker 1: space already been picked over by smart data already? This

532
00:29:45,600 --> 00:29:50,120
Speaker 1: MELDA ETS and active management. No. I mean, look, we're

533
00:29:50,160 --> 00:29:53,480
Speaker 1: super excited about our factors offering and that has been

534
00:29:53,480 --> 00:29:57,000
Speaker 1: a tremendous franchise of growth for us separately from separate

535
00:29:57,040 --> 00:30:00,160
Speaker 1: from that, UH in the active space, and and I

536
00:30:00,200 --> 00:30:03,400
Speaker 1: think that we have been really clear around UM. You know,

537
00:30:03,440 --> 00:30:08,360
Speaker 1: wherever we see an opportunity to bring two clients performance

538
00:30:09,120 --> 00:30:12,280
Speaker 1: through an investment strategy that will benefit from the idea

539
00:30:12,280 --> 00:30:16,360
Speaker 1: of structure UM, we will bring it to market and

540
00:30:16,400 --> 00:30:20,360
Speaker 1: that's that's you've seen an acceleration of our offering UM

541
00:30:20,600 --> 00:30:24,680
Speaker 1: in the active space primarily transparent. And if you look

542
00:30:24,720 --> 00:30:28,680
Speaker 1: at our filing has been transfer has been mostly transparent,

543
00:30:28,720 --> 00:30:31,560
Speaker 1: and most of the growth has been through transparency. Now,

544
00:30:31,720 --> 00:30:34,920
Speaker 1: are there strategies that at times would benefit from some

545
00:30:35,000 --> 00:30:39,360
Speaker 1: sort of non transparent or semi transparent structure because you're

546
00:30:39,400 --> 00:30:42,680
Speaker 1: trying to protect the holdings that you are, the investments

547
00:30:42,760 --> 00:30:45,320
Speaker 1: that protfolio manager are making. Yeah, there's going to be

548
00:30:45,400 --> 00:30:48,400
Speaker 1: times that that happens, and then we have the option

549
00:30:48,480 --> 00:30:51,120
Speaker 1: to do that type of portfolio as well. I think

550
00:30:51,240 --> 00:30:54,600
Speaker 1: ultimately we don't think in terms of transparency and non transparency.

551
00:30:55,040 --> 00:30:58,760
Speaker 1: We think of what can we bring to investors that

552
00:30:58,920 --> 00:31:02,760
Speaker 1: is new, that brings innovation, that brings performance. What's the

553
00:31:02,760 --> 00:31:06,040
Speaker 1: best rapper to bring it in? As the secondary decision,

554
00:31:07,040 --> 00:31:10,760
Speaker 1: I have a bet with my esteem colleague Todd Rosenbluth,

555
00:31:11,000 --> 00:31:15,680
Speaker 1: the infamous UM. We're betting whether active non transparent ets

556
00:31:15,720 --> 00:31:18,800
Speaker 1: will have ten billion by April first next year. I

557
00:31:18,840 --> 00:31:21,680
Speaker 1: am the under, he's the over, and a big reason

558
00:31:21,720 --> 00:31:25,960
Speaker 1: I'm the under is smart beta. I think if smart

559
00:31:25,960 --> 00:31:29,720
Speaker 1: beta didn't exist, active non transparence would have a lot

560
00:31:29,760 --> 00:31:32,760
Speaker 1: of real estate to try to capture. But the fact

561
00:31:32,920 --> 00:31:37,320
Speaker 1: is you can get active strategies served up rules based

562
00:31:37,360 --> 00:31:40,080
Speaker 1: in smart beta. For example, your U S, m V

563
00:31:40,320 --> 00:31:44,280
Speaker 1: or mt um momentum and minimumal or even multi factor

564
00:31:44,800 --> 00:31:47,560
Speaker 1: which combines them all for you know under twenty basis points.

565
00:31:48,480 --> 00:31:52,280
Speaker 1: How does an active human, especially in the large cap space,

566
00:31:52,800 --> 00:31:57,400
Speaker 1: dislodge something so cheap um which advisor's love right now?

567
00:31:57,920 --> 00:31:59,960
Speaker 1: And do you think I will win my bet with Todd?

568
00:32:00,760 --> 00:32:05,480
Speaker 1: Um So, I think that this will uh make Todd

569
00:32:05,560 --> 00:32:07,440
Speaker 1: not so happy, But I think I would put my

570
00:32:07,960 --> 00:32:13,760
Speaker 1: money with you, um Man, alright, Smart, I think that

571
00:32:14,440 --> 00:32:16,600
Speaker 1: I may change my answer if I'm talking to him,

572
00:32:16,640 --> 00:32:24,120
Speaker 1: But um I think that, look, there's an opportunity in

573
00:32:24,200 --> 00:32:26,520
Speaker 1: the active offering. I agree with you in terms of

574
00:32:26,520 --> 00:32:30,160
Speaker 1: the potential for factors, and our factor offering has proven that.

575
00:32:30,760 --> 00:32:32,920
Speaker 1: And I think that the transparency that they bring the

576
00:32:33,040 --> 00:32:35,800
Speaker 1: rules based approach, I mean a lot of that is

577
00:32:35,840 --> 00:32:39,240
Speaker 1: a tremendous benefit and has proven in the performance right,

578
00:32:39,520 --> 00:32:41,360
Speaker 1: And I think that we're still in the early days

579
00:32:41,400 --> 00:32:44,280
Speaker 1: of the growth of factors. Um there's there's a space

580
00:32:44,360 --> 00:32:47,360
Speaker 1: for certain strategies and that's what we're doing. There's certain

581
00:32:47,400 --> 00:32:51,200
Speaker 1: strategies that are incredibly attractive, and obviously I cannot talk

582
00:32:51,200 --> 00:32:54,600
Speaker 1: about them right now because of the quiet period. But

583
00:32:54,680 --> 00:32:56,960
Speaker 1: you know, there's some active strategies that it will be

584
00:32:57,000 --> 00:32:59,360
Speaker 1: great to have a monunity of form. I just think

585
00:32:59,360 --> 00:33:02,400
Speaker 1: that they grow. It's going to be different, Eric, how

586
00:33:02,480 --> 00:33:05,200
Speaker 1: much did you wager on that bet? By the way, Um,

587
00:33:05,240 --> 00:33:08,000
Speaker 1: it's a state dinner, but I can go crazy with

588
00:33:08,040 --> 00:33:11,959
Speaker 1: the side dishes when we get some cream spinach. Um,

589
00:33:12,000 --> 00:33:15,240
Speaker 1: definitely a couple of drinks. I'm gonna lap it up

590
00:33:15,280 --> 00:33:17,920
Speaker 1: because it's a year long bet, so might as well indulge.

591
00:33:17,960 --> 00:33:19,920
Speaker 1: I'm one for one with my bets with Todd, So

592
00:33:23,880 --> 00:33:30,720
Speaker 1: otherwise it's hopefully yeah dinner. God. I hope we it's

593
00:33:30,840 --> 00:33:35,520
Speaker 1: we can do it in real life, hope. Eric. Um.

594
00:33:35,560 --> 00:33:39,560
Speaker 1: I have a question about I Shares versus black Rock branding.

595
00:33:39,600 --> 00:33:41,640
Speaker 1: You guys have started to use the black Rock name

596
00:33:41,680 --> 00:33:45,520
Speaker 1: on certain ETFs Um. Why is that? We just want

597
00:33:45,520 --> 00:33:47,440
Speaker 1: to make it easier for clients to understand what it

598
00:33:47,520 --> 00:33:49,880
Speaker 1: is that they're buying. Uh. And I think that when

599
00:33:49,880 --> 00:33:52,640
Speaker 1: it comes to active we are going to name them

600
00:33:52,680 --> 00:33:55,520
Speaker 1: black Rock, just to make it easier to understand that

601
00:33:55,520 --> 00:33:58,520
Speaker 1: if you're blind a black rock EPF, that means it's

602
00:33:58,520 --> 00:34:01,640
Speaker 1: an active ETF. And if you're in and I CPF,

603
00:34:01,640 --> 00:34:04,480
Speaker 1: you're buying on index bace CPS. So it's just it's just,

604
00:34:04,840 --> 00:34:06,520
Speaker 1: you know, trying to make it easier for clients to

605
00:34:06,600 --> 00:34:10,919
Speaker 1: understand exactly what they have and what he means. Let's

606
00:34:10,920 --> 00:34:12,920
Speaker 1: shift gears a little bit here, and you know we

607
00:34:13,000 --> 00:34:17,400
Speaker 1: talked about your UM, your massive flow intake earlier. There's

608
00:34:18,040 --> 00:34:21,280
Speaker 1: a steady stream of worries on how you and Vanguard

609
00:34:21,320 --> 00:34:26,040
Speaker 1: in particular Impassive, which is ultimately you guys are continuing

610
00:34:26,440 --> 00:34:30,239
Speaker 1: to become bigger and bigger owners of America's corporations. There's

611
00:34:30,280 --> 00:34:34,279
Speaker 1: two concerns. One is proxy voting. Will you vote politically

612
00:34:34,640 --> 00:34:37,280
Speaker 1: like with E. S G all the time? Or you

613
00:34:37,280 --> 00:34:40,759
Speaker 1: got you have customers in every state, so how do

614
00:34:40,800 --> 00:34:43,640
Speaker 1: you vote and balance all those needs? And number two

615
00:34:43,719 --> 00:34:46,520
Speaker 1: is do you think that if Passive becomes a bigger,

616
00:34:46,520 --> 00:34:51,480
Speaker 1: bigger owner corporations will somehow be less motivated to actually

617
00:34:51,800 --> 00:34:56,160
Speaker 1: engage in capitalism and we become like somehow it's more

618
00:34:56,239 --> 00:35:01,359
Speaker 1: like lazy UM. I mean look, the its economy UH

619
00:35:01,719 --> 00:35:06,040
Speaker 1: is large, diverse and vibrant, and I mean, ultimately, when

620
00:35:06,080 --> 00:35:07,799
Speaker 1: you look at what we're trying to do, what we

621
00:35:07,840 --> 00:35:12,040
Speaker 1: are about is we have a FIDU shared responsibility to

622
00:35:12,160 --> 00:35:15,440
Speaker 1: our clients. It's not our money, it's our clients money.

623
00:35:15,760 --> 00:35:19,480
Speaker 1: And what we are trying to achieve is the best

624
00:35:19,719 --> 00:35:22,960
Speaker 1: to media objectives of the clients. Depending on the portfolio

625
00:35:23,000 --> 00:35:25,560
Speaker 1: that that we manage on behalf of that. You know,

626
00:35:25,560 --> 00:35:28,920
Speaker 1: when when you look at that discussion, I mean sometimes

627
00:35:29,000 --> 00:35:32,200
Speaker 1: we forget that we have a tremendous we have billions

628
00:35:32,200 --> 00:35:35,640
Speaker 1: of dollars in active management UH and there are individually

629
00:35:35,760 --> 00:35:40,799
Speaker 1: selecting securities. So index is one part of our of

630
00:35:40,880 --> 00:35:43,560
Speaker 1: black Rock, and then we have our active book and

631
00:35:43,640 --> 00:35:47,680
Speaker 1: ultimately both decisions have to be driven by the FIDU

632
00:35:47,760 --> 00:35:51,240
Speaker 1: shary of responsibility that we have to deliver the first

633
00:35:51,320 --> 00:35:54,200
Speaker 1: the best performance to clients. So again, you know, like

634
00:35:54,440 --> 00:35:57,160
Speaker 1: we you know, there's been a lot of discussion around that.

635
00:35:57,239 --> 00:35:59,800
Speaker 1: We don't believe that that's an issue. We don't believe

636
00:35:59,840 --> 00:36:02,080
Speaker 1: that the size of index, even when you look now

637
00:36:02,440 --> 00:36:04,920
Speaker 1: the size of freight with the investments as a percentage

638
00:36:04,920 --> 00:36:07,640
Speaker 1: of the with the market, the size of fixing come

639
00:36:07,680 --> 00:36:12,000
Speaker 1: investments is a percentage of the bond market. Um, that's

640
00:36:12,440 --> 00:36:14,399
Speaker 1: we don't believe that that's an issue that we should

641
00:36:14,440 --> 00:36:17,600
Speaker 1: be concerned about. The other thing that I hear a lot,

642
00:36:17,640 --> 00:36:18,840
Speaker 1: and I just like to get your take on this

643
00:36:19,480 --> 00:36:22,919
Speaker 1: the indies, right, these are small independent issuers. They're great

644
00:36:22,960 --> 00:36:24,520
Speaker 1: about you guys a lot. You know, you get into

645
00:36:24,560 --> 00:36:27,680
Speaker 1: themes and like maybe the more hardcore area of the

646
00:36:27,719 --> 00:36:31,359
Speaker 1: factor space. What do you say to them, thinking like, hey,

647
00:36:31,360 --> 00:36:33,720
Speaker 1: come on, can't you just like let us own this area?

648
00:36:34,360 --> 00:36:36,920
Speaker 1: Why does black Rock have to go into everything? And

649
00:36:36,960 --> 00:36:39,719
Speaker 1: also I think that one thing that they one complaint

650
00:36:39,719 --> 00:36:42,720
Speaker 1: they often have is like if they have a good idea,

651
00:36:42,880 --> 00:36:47,719
Speaker 1: black Rock can easily just take it. I think there's

652
00:36:47,719 --> 00:36:51,680
Speaker 1: plenty of I I believe that the more etf issuers,

653
00:36:52,600 --> 00:36:54,919
Speaker 1: the better it is for the overall industry. The better

654
00:36:55,160 --> 00:36:57,400
Speaker 1: is for the market, the better it is for clients.

655
00:36:57,440 --> 00:36:59,000
Speaker 1: And I think that, you know, the only thing my

656
00:36:59,320 --> 00:37:01,560
Speaker 1: only comment here that I would bring is that what

657
00:37:01,680 --> 00:37:04,520
Speaker 1: we need to see is real innovation coming from different issuers.

658
00:37:04,600 --> 00:37:07,480
Speaker 1: You know. I think that if you're just trying to replicate, uh,

659
00:37:07,520 --> 00:37:09,920
Speaker 1: you know, and you've seen that over and over again,

660
00:37:09,960 --> 00:37:12,680
Speaker 1: you know, someone comes with a new version of the

661
00:37:12,880 --> 00:37:17,360
Speaker 1: SMP five hundred, a cup weighted generic index at a

662
00:37:17,400 --> 00:37:20,760
Speaker 1: lower price. I just don't think that that game will work.

663
00:37:21,600 --> 00:37:24,880
Speaker 1: I think that if you bring real innovation that delivers

664
00:37:24,960 --> 00:37:28,080
Speaker 1: value to clients, I think that you have h then

665
00:37:28,280 --> 00:37:31,759
Speaker 1: the opportunity to grow and be successful. But overall, I

666
00:37:31,800 --> 00:37:34,200
Speaker 1: think that the more competition that we have, the better

667
00:37:34,239 --> 00:37:37,960
Speaker 1: we get. We're not gonna stop. So we're very competitive.

668
00:37:38,040 --> 00:37:40,720
Speaker 1: We want to stay competitive. We want to uh continue

669
00:37:40,760 --> 00:37:43,160
Speaker 1: to innovate, uh and you see that in some of

670
00:37:43,200 --> 00:37:47,000
Speaker 1: the offering that that we're creating in the last few years.

671
00:37:47,239 --> 00:37:49,520
Speaker 1: But I think that there's an opportunity for real innovation

672
00:37:49,560 --> 00:37:52,440
Speaker 1: to come in. But if you just introduce something at

673
00:37:52,480 --> 00:37:54,680
Speaker 1: a lower price, I think that the idea that just

674
00:37:54,880 --> 00:37:57,799
Speaker 1: costs is what it's going to drive success. I think

675
00:37:57,800 --> 00:38:01,480
Speaker 1: that that's wrong. That will fail. Okay, it seems like

676
00:38:01,560 --> 00:38:05,799
Speaker 1: everybody at Black Rock is musically inclined. Martin Smalls has

677
00:38:05,840 --> 00:38:09,920
Speaker 1: a gigantic guitar collection. I'm curious, you know what, what

678
00:38:10,040 --> 00:38:14,120
Speaker 1: kind of what kind of instruments you play? Well, I

679
00:38:14,280 --> 00:38:17,120
Speaker 1: tell you what. Maybe we can talk better about things

680
00:38:17,120 --> 00:38:21,040
Speaker 1: that I would like to play. I would love to play,

681
00:38:21,280 --> 00:38:23,880
Speaker 1: to play the electric guitar like Martin, that would be

682
00:38:23,960 --> 00:38:26,400
Speaker 1: I would love that. I'm a huge rock fan, would

683
00:38:26,400 --> 00:38:31,120
Speaker 1: love that. I have absolutely no musical talent whatsoever, but

684
00:38:31,200 --> 00:38:34,319
Speaker 1: I would love to play the electric guitar. You could

685
00:38:34,320 --> 00:38:36,439
Speaker 1: do the cow bell in the in the black Rock band,

686
00:38:37,680 --> 00:38:42,880
Speaker 1: I could do that, you know block because andrew A

687
00:38:43,160 --> 00:38:47,239
Speaker 1: is the synthesizer guy. My colleague over there, Kate Bernhardt

688
00:38:47,280 --> 00:38:50,719
Speaker 1: is an excellent singer. I was wondering if do they

689
00:38:50,800 --> 00:38:54,200
Speaker 1: ask you to name three guitar chords in the interview

690
00:38:54,360 --> 00:38:57,279
Speaker 1: and when you file for a job. I saw him

691
00:38:57,320 --> 00:39:01,640
Speaker 1: play they play uh or black Rock last year. That

692
00:39:01,680 --> 00:39:03,640
Speaker 1: was the first time that I saw them live, and

693
00:39:03,680 --> 00:39:07,120
Speaker 1: I was humbled by the amount of talent on stage

694
00:39:07,360 --> 00:39:11,320
Speaker 1: because I couldn't I really couldn't play anything. So they

695
00:39:11,400 --> 00:39:13,640
Speaker 1: were incredible. They did an amazing job and they actually

696
00:39:13,680 --> 00:39:15,279
Speaker 1: placed all of the songs that I really loved, so

697
00:39:15,280 --> 00:39:17,879
Speaker 1: it was great. Armando, thanks so much again for joining

698
00:39:17,920 --> 00:39:20,239
Speaker 1: us on Trillions. No, thanks for having me here. It's

699
00:39:20,239 --> 00:39:28,000
Speaker 1: been a pleasure. Thanks for listening to Trillions until next time.

700
00:39:28,160 --> 00:39:31,120
Speaker 1: You can find us on the Bloomberg Terminal, Bloomberg dot com,

701
00:39:31,239 --> 00:39:34,680
Speaker 1: Apple Podcasts, Spotify and wherever else you like to listen.

702
00:39:34,960 --> 00:39:37,239
Speaker 1: We'd love to hear from you. We're on Twitter, I'm

703
00:39:37,280 --> 00:39:40,520
Speaker 1: at Joel Webber Show, He's at Eric call Tunis and

704
00:39:40,560 --> 00:39:45,080
Speaker 1: you can find any at Antonia b Massa. This episode

705
00:39:45,080 --> 00:39:48,600
Speaker 1: of Trillions was produced by Magnus Hendrickson. Francesca Levy is

706
00:39:48,600 --> 00:39:52,360
Speaker 1: the head of Bloomberg Podcast. Bye.