Speaker 1: Welcome trilliance. I'm Joel Webber and I'm americal. Tunis Eric?
Speaker 1: Are you ready for next year? Yet? Absolutely? So? Over
Speaker 1: I am, So how about can we get there? Yeah?
Speaker 1: I mean honestly, this year has felt like a decade,
Speaker 1: like longer than a decade. Yes, I mean there's been
Speaker 1: so many phases to it. Something somebody brought up, something
Speaker 1: that happened in January, and it seemed like four times
Speaker 1: yeah before times, yeah before I think longingly about the
Speaker 1: before times. Yeah BC. On this episode of Trillions, we're
Speaker 1: gonna go into the future. Yeah. Um, we're gonna talk
Speaker 1: about the future. Yeah. You know, last year and and
Speaker 1: every half year we coun into these outlooks, and that
Speaker 1: that term is gets. You know, it's a little beaten
Speaker 1: down and traite at this point, and we do an outlook,
Speaker 1: but we thought for this audience, given this sort of
Speaker 1: retailer ish nature, we would do what we're calling one one.
Speaker 1: So we're gonna go over t s that we're watching
Speaker 1: in this coming year. And just to be clear, we
Speaker 1: do not give investment device. So this is not ets
Speaker 1: we think we'll go up or down. It's ones that
Speaker 1: we as analysts just keep thinking about and we're fascinated
Speaker 1: by and they kind of tap into some bigger themes
Speaker 1: and topics and so um. So basically we had the
Speaker 1: whole team, and the team being myself at the Nazia
Speaker 1: Sera Veagus, James Staffer and Morgan Barna each pick five
Speaker 1: ETFs and then we all sort of agreed on the
Speaker 1: twenty one, which we'll go over at the end, but
Speaker 1: that that's the general idea and we'll we'll go through
Speaker 1: it during this sub podcast Best time on Brilliant. Okay,
Speaker 1: so we're going from youngest to oldest, which means James
Speaker 1: Safer is on the hot seat to go first. James,
Speaker 1: what's your opening batch of e t F kickers? So
Speaker 1: my opening batch actually breaks the rules. It's not technically
Speaker 1: an e t F. It's GBTC. Already you're already not
Speaker 1: following instruction, years off to a terrible start, but this
Speaker 1: is something you can't leave off, especially in the environment
Speaker 1: where and it's the gray scale bitcoin trust. Um so
Speaker 1: it holds bitcoin. Uh, it's not technically an et F.
Speaker 1: It's what's known as a grant or trust. Basically, it
Speaker 1: operates kind of like a closed and fund. It's not
Speaker 1: the most efficient vehicle in the world, but right now
Speaker 1: Bitcoin sitting near all time highs, just shy of twenty thousands.
Speaker 1: The fund itself is now has a market cap of
Speaker 1: over of around fourteen billion, which is nothing to sneeze
Speaker 1: at for sure, um, but it's it's taken in a
Speaker 1: lot of money this year, would be in the top
Speaker 1: fifty for getting flows this year in so looking to
Speaker 1: see if this continues into the other five. This that
Speaker 1: brings up is a bitcoin ETF. This is something that's
Speaker 1: been talked about since possibly even earlier when the coballs
Speaker 1: first filed, and it's just the SEC is not letting
Speaker 1: it happen. Um. So there's kind of a disservice in
Speaker 1: my opinion, going on here with the SEC allowing this
Speaker 1: product to operate in the OTC markets where retail investors
Speaker 1: can buy it, but they can't buy a more efficient
Speaker 1: actual et F that holds bitcoin. So you have right
Speaker 1: now this thing on Friday closed at roughly a thirty
Speaker 1: percent premium to its underlying value, So basically you're paying
Speaker 1: a thirty percent premium just to get access to this
Speaker 1: fund that holds bitcoin. UM. So there's a bunch of
Speaker 1: issues here, But this is the best product you have
Speaker 1: UM inside the current existing brokerage system. So I'm just
Speaker 1: gonna see how this goes. And the other thing I'm
Speaker 1: watching is if a bitcoin e t F does get approved,
Speaker 1: I think there's a good chance that this product actually
Speaker 1: gets converted to an e t F, so it will
Speaker 1: open up at the door at a ten billion dollar
Speaker 1: product if it converts from a grant of trust to
Speaker 1: an e t F. Okay number two. Number two is
Speaker 1: a little more boring. UM. It's v x US, the
Speaker 1: Vanguard Total International Stock ETF UM. If you look at
Speaker 1: like global equity land Escape and you slice it the
Speaker 1: COmON way to slice in three ways, right, so you're
Speaker 1: looking at domestic equity, international, developed, and then emerging market.
Speaker 1: If you look at the domestic equity market right now,
Speaker 1: I mean over the last ten years, domestic stocks have
Speaker 1: outperformed international stocks by with emerging markets doing slightly worse,
Speaker 1: an international developed doing slightly better. But it's been an
Speaker 1: absolute dominant run by domestics. So one we're going I'm
Speaker 1: watching this to see if international stocks can do some
Speaker 1: catching up. The other thing I'm watching is v x
Speaker 1: U S has been around for about ten years has
Speaker 1: only they've seen three days of outflows. It's just a
Speaker 1: perpetual parade of inflows, partially because of the underperformance. So
Speaker 1: people are constantly rebalancing into this. So if that changes,
Speaker 1: I want to see if this thing starts seeing outflows.
Speaker 1: Number three, I'm gonna go with SNPE here, which is
Speaker 1: the Extractor's SMP five E s G E T F UM. Obviously,
Speaker 1: E s G is a hot topic, it has been
Speaker 1: for a couple of years UM, which finally starting to
Speaker 1: see assets go to the space. The other thing here
Speaker 1: is I like these types of products, they find them
Speaker 1: more interesting. Um when I mean these types of products.
Speaker 1: SMP is an exclusionary portfolio. So what it does is
Speaker 1: it gives you the SMP five hundred and basically takes
Speaker 1: out the worst actors from each sector and then a
Speaker 1: couple of other ones like tobacco and weapons. So you're
Speaker 1: getting broadly the SMP five hundred, but just kind of
Speaker 1: taking things off the edge that thinks are the worst performers.
Speaker 1: And the other thing I'm looking at here is there's
Speaker 1: three other ETFs that track the same exact index. One
Speaker 1: on the US market, which is E five from Spider
Speaker 1: and then there's one from Investco in Europe UM which
Speaker 1: is sp X E, and one in Canada that's e
Speaker 1: s G. So all of these have about just shy
Speaker 1: of a billion dollars. So I want to see how
Speaker 1: quickly those assets grow. Because SMP is obviously pushing this
Speaker 1: as a as a product, how do they decide what
Speaker 1: gets excluded? Is it just performance? So each so that
Speaker 1: it's it's actually a pretty complicated um methodology. Uh. Depending
Speaker 1: on the sector, it takes certain scores into more more important,
Speaker 1: so like they might take social more important in this area,
Speaker 1: or like obviously energy they take into carbon a little
Speaker 1: more seriously. Um. So different things gets different ways. So
Speaker 1: the whole idea is just like, based on your sector,
Speaker 1: we're gonna get rid of the worst things from that
Speaker 1: sector and we're just gonna give you basic your The
Speaker 1: goal is to give a risk return characteristics similar to
Speaker 1: the SMP, which we've done tons of research. We've talked
Speaker 1: about it on this podcast. The things that are most
Speaker 1: like beta, the most like what you can put in
Speaker 1: a core portfolio, tend to get the most assets and
Speaker 1: interests from advisors. Okay, number four, Um, so I'm gonna
Speaker 1: go with ov L which is the overlay shares Large
Speaker 1: cap Equity e t F. There's another one SPU i
Speaker 1: C from Simplify the Simplify Us Equity plus Convexity e
Speaker 1: t F. These are structured product ETFs. They have like
Speaker 1: kind of overlays and it's an interesting market for these.
Speaker 1: There's a couple of them coming to market. We've talked
Speaker 1: about the buffer products on here a bunch. We had
Speaker 1: Bruce Bond on UM. All of these kind of like
Speaker 1: options strategy e t f s are coming to market.
Speaker 1: It's a booming area and it's a good time for
Speaker 1: now with interest rate SOLO, there's a lot of people
Speaker 1: looking for yield replacement. There's a lot of people saying
Speaker 1: that you can't just do a sixty forty portfolio. So
Speaker 1: they're taking a little away from each side and going
Speaker 1: to these other types of products. UM. Some of them.
Speaker 1: O VL for instance, is outperformed since it's launch, which
Speaker 1: so I'm just kind of watching to see both the
Speaker 1: performance of these things and how well they do at
Speaker 1: gathering assets. UM. So we'll see and your your fifth
Speaker 1: and final. So my fifth and final is uh is
Speaker 1: t q q q UM and also s q q
Speaker 1: q T q q Q is the triple levered long
Speaker 1: queues or NASDAQ on t f UM. This thing has
Speaker 1: shocked US this year. It is the fourth most traded
Speaker 1: e t f on US exchanges in twenty so far,
Speaker 1: which is kind of insane for me to think about
Speaker 1: that a triple leverage product would do it. But that
Speaker 1: kind of is indicative of two things. One, Robin Hood
Speaker 1: traders will just use that term, but really retail traders
Speaker 1: on any platform have balloon or in the pandemic. And also,
Speaker 1: obviously tech has done extremely well. The cues of outperformed
Speaker 1: the SP five over a long period of time, and
Speaker 1: the cues have even outperformed by more. The t q
Speaker 1: q Q as outperformed by more because basically the way
Speaker 1: it's leverage, if it's a consistent ride up, it actually
Speaker 1: will generate more return than the the underlying investment. So
Speaker 1: basically going to be watching to see two things. One
Speaker 1: does this outperformance continue and two does that this amount
Speaker 1: of trading. I mean, this thing trades opens four billion
Speaker 1: dollars a day um, So is that going to slow
Speaker 1: down when things start opening up? Their sports back on TV, now,
Speaker 1: more gambling, more things like that, are people going to
Speaker 1: leave the trading arena UM from their deaths at home.
Speaker 1: So all that's gonna be interesting rots in one in
Speaker 1: my view, Hey Eric, Um, I don't know if you
Speaker 1: were listening to this, but James picked a ticker that
Speaker 1: wasn't in et F and then he picked two tickers
Speaker 1: instead of one. Um, what do we what do you
Speaker 1: have to say about m and his picks? Well, I
Speaker 1: think it's on brand. UM. I think James is like
Speaker 1: when I want to know, like the mindset of a
Speaker 1: mall Neil day trader. I asked James, he's got Bitcoin,
Speaker 1: he's got triple leverage cues, and he's got E S
Speaker 1: G in there and in some you know, option overlay.
Speaker 1: He's Um, I think they're great. I think all of
Speaker 1: these are really interesting. I think v x US is
Speaker 1: the one that's that's a little unexpected from from his picks. UM.
Speaker 1: That said, you know, waiting for International to catch up
Speaker 1: or do you know, to have a good run has
Speaker 1: been something that's been like a five year story. But
Speaker 1: our chief market strategist, Gina Martin Adams has talked about
Speaker 1: look out for some rotations next year and one of
Speaker 1: those is two International. So UM, I think they're great.
Speaker 1: I think they're all indicative of things that are going
Speaker 1: to play out next year. I think bitcoin et F,
Speaker 1: if you have Biden, pick somebody who is just the
Speaker 1: right person at the SEC, potentially you can see want
Speaker 1: to prove quickly. Um, but I'm still doubtful. I'll add
Speaker 1: something and I'm the Bitcoin thing that I think is
Speaker 1: really interesting. They want to prove it. Um. Europe has
Speaker 1: a bitcoin tfs already, right and they're performing, uh pretty well.
Speaker 1: So it's interesting that you have all these approvals in
Speaker 1: Europe and there's multiple bitcoin ETFs. So I have to
Speaker 1: think that the SEC is looking over in Europe. You know,
Speaker 1: usually it's the other way around. Europe's looking to what
Speaker 1: the U S is doing, but it seems like this
Speaker 1: time they're looking the other way. Um. So I think
Speaker 1: depending how some of these products trade, could hopefully open
Speaker 1: the door and make it a little bit easier for
Speaker 1: a bitcoin approval in the US. Yeah. And there's a
Speaker 1: lot of a lot of what aboutism with some of
Speaker 1: the stuff that Robin Hood people are doing. And then
Speaker 1: they're like, but there still isn't a bitcoin ETF. You know,
Speaker 1: we looked a bitcoin e t F ranked by volatility
Speaker 1: would be wouldn't even be in the top fifty. Um
Speaker 1: there are there would be you know, dozens of e
Speaker 1: t A e tps that are more volatile than a
Speaker 1: bitcoin fund would be. It just has comes down to that,
Speaker 1: you know, surveillance on exchanges and the possibility of manipulation
Speaker 1: that the SECC can't seem to get over. But and look,
Speaker 1: you know over in Sweden they've got they've had they'd
Speaker 1: launched this stuff a long time ago. There's one over
Speaker 1: there is five years old and there has not been
Speaker 1: really much problem with the premium discount. It seemed to
Speaker 1: do the job exactly as an e t P should.
Speaker 1: I'm surprised they haven't looked at that and said, okay,
Speaker 1: well it's worked there five years, let's let's give it
Speaker 1: a shot. But they're they're they're obsessed with the underlying
Speaker 1: market more than the how the product will work. And
Speaker 1: that's the issue, all right. Second youngest analysts morgan um
Speaker 1: number six e t f I SEB t I shares
Speaker 1: Convertible bond DTF. So the convertibles market have really ballooned
Speaker 1: UM this year there was sort of a bull year.
Speaker 1: We're on track for like a hundred and seventeen billion
Speaker 1: of issuants UM. This fun tracks of Bloomberg Barkley's US
Speaker 1: Convertible Cash Pay Bond Index, which is really issuers coming
Speaker 1: to market for UM, you know, really appealing borrow rates
Speaker 1: with an equity conversion option. So the the appreciation investors
Speaker 1: really is linked to the equity growth. But just the
Speaker 1: nature of the issuers has been super interesting this year.
Speaker 1: Entrence that were more distressed, like American Airlines were a Caribbean,
Speaker 1: but also just really fast growing companies that that are
Speaker 1: looking to you know, lowering or cossa borrowing UM companies
Speaker 1: like shop High and Novocure. So ultimately with with the
Speaker 1: conversion option, investors in this fund have seen UM really
Speaker 1: strong growth like fifty up this year. For for investors
Speaker 1: who really want to stick to a certain bond allocation,
Speaker 1: this is kind of an interesting, uh interesting play to
Speaker 1: do it. Some of the mutual funds have have loads,
Speaker 1: So I like that the e t F is clean
Speaker 1: share class and this fund actually only charges twenty BIPs. Okay,
Speaker 1: number seven, I'm going with q Q q J, which
Speaker 1: I don't know that one. I know, I know cues,
Speaker 1: but I don't know Cukuku j Yeah, relatively new, launched
Speaker 1: in October. It was a an extension of sort of
Speaker 1: the NASDAC brand Buy invest Go, which is really interesting.
Speaker 1: It's the next one hundred listed companies on the asset
Speaker 1: that are non financials, so in line with the QQ
Speaker 1: brand UM. Obviously, that brand has has had some pretty
Speaker 1: big strides this year just in notoriety and investors interest
Speaker 1: in in it. But this, this next one, actually we
Speaker 1: like that it overlaps with a number of sort of
Speaker 1: hot thematic categories. Even just looking at the top three holdings,
Speaker 1: I mean five G content streaming, on demand, internet, ad tech,
Speaker 1: you know this, This is just sort of intersect with
Speaker 1: a lot of interesting themes um. So we're watching this fun.
Speaker 1: We think it's going to get more traction um the
Speaker 1: coming year. It already has three million in assets. Okay,
Speaker 1: Number eight. I chose KMD Crane Chairs, Emerging Markets, Healthcare
Speaker 1: et F. This is a smaller fund, but we've seen
Speaker 1: as some have have described a bit of like a
Speaker 1: k recovery. I think, you know, healthcare along with biotech,
Speaker 1: but really, you know, healthcare and emerging markets has been
Speaker 1: part of the upper leg of that k UM. They're
Speaker 1: just some really interesting exposure here among some of the
Speaker 1: more innovative emerging markets economies. Uh. This fund has a
Speaker 1: thirty percent allocation in China, twenty to South Korea, thirteen
Speaker 1: percent Hong Kong, and thirteen percent India. So really those
Speaker 1: stronger growing emerging market economies right now. Um. The structural
Speaker 1: I guess play here is that healthcare costs as a
Speaker 1: share of GDP or supposed to grow a lot faster
Speaker 1: and emerging markets than developed Um. Just the demographic tell
Speaker 1: when they're coming along with urbanization. So the fund has
Speaker 1: seen some some really strong growing names this year, but
Speaker 1: I think it owes to the construction of it. So
Speaker 1: it's it's market cap weighted with a cap at four
Speaker 1: point five percent, and then anything over that is distributed
Speaker 1: prograd at the rest of the holding. So it does
Speaker 1: feature some some higher weightings and smaller companies. And yeah,
Speaker 1: I'm watching this one next year. I think I think
Speaker 1: the demographic trends are going to continue to play. Um. Okay,
Speaker 1: number nine, I chose that the A T T which
Speaker 1: is amplifies lithium and battery technology. I was going to say,
Speaker 1: if this has nothing to do with battery it would
Speaker 1: be like the weirdest tiger of all time. But yeah,
Speaker 1: glad to know it's battery. This is a battery t
Speaker 1: F Actually super Interestingly, this fund converted from an actively
Speaker 1: managed UH to an index based strategy in mid October,
Speaker 1: So that's part of why I'm watching it because I
Speaker 1: think the index based construction is really going to change
Speaker 1: the investment mandate change too. I think this fund is
Speaker 1: going to have a little bit of a different trajectory
Speaker 1: going forward. So they actually notched down their exposure to
Speaker 1: lithium miners by ten percent. The fund added six energy
Speaker 1: storage makers and now it's including e V auto manufacturers
Speaker 1: in a meaningful way. It's going to try to contain
Speaker 1: those automakers to just the exposure and get more of
Speaker 1: the end to end battery life cycle and still keep
Speaker 1: the miners in there. Um. But know it's at a
Speaker 1: Tesla Neo like a bunch of these these EV makers.
Speaker 1: Though the EV maker has to have top line revenue
Speaker 1: from electric vehicles. But interestingly, the other auto makers as
Speaker 1: they they you know, maybe naturally increase their e V
Speaker 1: output could be considered for this fund. So I think
Speaker 1: the construction is interesting. They even have like sort of
Speaker 1: a market cap minimum for some of the lithium miners
Speaker 1: and other metals producers, so they have to have a
Speaker 1: reasonable share of the market. I think it just tries
Speaker 1: to add really close to this the sector and the
Speaker 1: growth in lithium ion battery demand. Okay, and your your
Speaker 1: tent my my fifth and the tent pick is UH
Speaker 1: NET and et L fundamental income net least rate e
Speaker 1: t F. This is an interesting UH sub segment of
Speaker 1: the of the single Tenant Reaped index in the US.
Speaker 1: So this is this is an index product, but it's
Speaker 1: it's sort of a sub index of only those reads
Speaker 1: that operate with triple netleases, so the managers actually have
Speaker 1: a much better path through of rental income to investors.
Speaker 1: So these tend to be this is a higher yielding
Speaker 1: segment right now, it's around four four four percent. Just
Speaker 1: as a starting point, the BI single tenant read index
Speaker 1: has done fiftcent better than the broader UH North American
Speaker 1: read index. I think that proved some defensibility on the
Speaker 1: single tenant side, and I see that kind of content
Speaker 1: that defensibility kind of continuing next year. This being a
Speaker 1: little bit more of a shielded segment of the real
Speaker 1: estate operators. But you know, I think there's really interesting
Speaker 1: embedded portfolio diversity. This is sort of a big range
Speaker 1: of tenant types. Um and for real estate or or
Speaker 1: a yield sleeve. This is this is an interesting strategy. Eric,
Speaker 1: what do you think about her picks? They're great. Um,
Speaker 1: They're all kind of out of the box stuff. I
Speaker 1: hadn't really thought of. The only one that I was
Speaker 1: I think where the whole team was on was q
Speaker 1: Q Q J. Think this is this product came out.
Speaker 1: Rarely a product gets launched and you're like, God, that
Speaker 1: makes so much sense, Like, I'm surprised they didn't do
Speaker 1: that one sooner. You know, the next one in the cues.
Speaker 1: I suppose that the cues were so on fire this
Speaker 1: year that it just the idea was more natural than
Speaker 1: the years past. But that's a good one. I like.
Speaker 1: I like the e M themes are analysts were off
Speaker 1: for b I, who covers all the emerging markets. He's
Speaker 1: written naturally about themes, even though E t f s
Speaker 1: are not his coverage, and they naturally connect with some
Speaker 1: of the things the issuers have been doing with try
Speaker 1: to unbundle em a little bit, to try to capture
Speaker 1: the more growthy areas and cut out the stuff that
Speaker 1: doesn't grow that fast. And then the battery you know,
Speaker 1: lithium has l I T the competing one has one
Speaker 1: point three billion, which is way more than I thought
Speaker 1: it did. And then the driver the electric driving car
Speaker 1: e t F there's like three of them now they
Speaker 1: also have about half a billion, so there's clearly interest
Speaker 1: in that one. So I also thought that was good.
Speaker 1: And also I see I V C T I rarely
Speaker 1: and think about convertibles, and it's the best performing fixed
Speaker 1: income et F of the year, which again was a shocker.
Speaker 1: So UM, I like, I enjoy being surprised by the picks,
Speaker 1: and I was surprised by like four of these five. Yeah,
Speaker 1: I mean the the I C v T pick is
Speaker 1: the one that jumped out at me, just because when
Speaker 1: she said it and I looked it up, I was like,
Speaker 1: that chart is impressive to look at, UM, And it's
Speaker 1: definitely a unique way that she mentioned to get like
Speaker 1: your your fixed income exposure. I talked about using those
Speaker 1: overlay structured products strategies as kind of like a way
Speaker 1: to change your sixty forty portfolio. Maybe you take a
Speaker 1: little from me to put in those and I think
Speaker 1: I c VT also kind of fits into that theme
Speaker 1: because you get a little more of the equity upside,
Speaker 1: but there's a little more principal protection on the downside
Speaker 1: theoretically because it is it does have a fixed income floor. UM.
Speaker 1: So I think I c BT also fits into that
Speaker 1: theme that I spoke about, UM pretty well. I like
Speaker 1: the q q J pick as well, UM, and I
Speaker 1: like it from the angle that it's a MidCap focus. Um.
Speaker 1: You know, NBUI, which is the mid cap ETF, is
Speaker 1: one of the best performing ETFs of all time, and
Speaker 1: it's traditionally been an area that Nastac just frankly hasn't
Speaker 1: focused on. So they they it's pretty interesting that they
Speaker 1: found that gap and now they're able to compete in
Speaker 1: the MidCap space as well. Terific If keep the mic,
Speaker 1: let's hear what you got alright. UM, My picks aren't
Speaker 1: as hardcore millennial because I grew up in the analog
Speaker 1: world two a little bit, so I've seen them both. Um.
Speaker 1: But the first one I'll start with is a SPG
Speaker 1: p UM. It's the Investo SMP five D GARB e
Speaker 1: t f UM GARB standing for growth at a Reasonable Price,
Speaker 1: But the way I explain this one, it's like it's
Speaker 1: like growth light. You're seeing this transition over to value. Now,
Speaker 1: value has been doing really well. You've seen it come
Speaker 1: up more and more. But if there's one thing that
Speaker 1: history has taught us, it's that anyone who keeps allocating
Speaker 1: the value gets burned. Um. What GARB does is it
Speaker 1: it still doesn't allow you to let go of these
Speaker 1: growth companies, but it down shifts a little bit. So
Speaker 1: if I was to run a chart between growth, value
Speaker 1: and are fall somewhere in the middle. So why I
Speaker 1: like this one is that it's still playing on this
Speaker 1: transition out of growth into value, but it's not fully
Speaker 1: moving over. Sometimes you see this binary move, people will
Speaker 1: move out of growth right into value. This one just
Speaker 1: sort of downshifts a little bit. Um. It's it's a
Speaker 1: really small product. It's not that well known. But the
Speaker 1: other thing I found interesting is that the issue where
Speaker 1: actually changed their strategy. It used to be like a
Speaker 1: full on growth strategy and they change it to GARB.
Speaker 1: So even themselves are inherently making a market call, and
Speaker 1: you know they're being a little bit more water down growth.
Speaker 1: So I think this is a really interesting one to
Speaker 1: watch for next year. Number twelve. Number twelve is I Buy,
Speaker 1: which is the Amplifi Online Retail et F. No, I
Speaker 1: don't need to sell you on the story of online
Speaker 1: retail and how well that's doing, but why I like
Speaker 1: this one and I call it sort of the non
Speaker 1: Amazon e t F. So when you look at a
Speaker 1: lot of these uh consumer discretionary or online retail product
Speaker 1: they are dominated by Amazon. Usually anyway from fifteen of
Speaker 1: the product is Amazon. This only has a two percent
Speaker 1: way to Amazon because it's equal weighted. And even with that,
Speaker 1: the ETF is up over a hundred percent this year,
Speaker 1: which is like the fifth best performing ETF out there. UM.
Speaker 1: And I'm really I like this product because it comes
Speaker 1: from a smaller issue from Amplified. Um It's it's capitalizing
Speaker 1: on the online retail trend, but it's not Amazon. UM.
Speaker 1: So there's all these other names there, so much happening
Speaker 1: in the ecosystem outside of them Amazon. A otther of
Speaker 1: people forget that, and this, this product brings all these
Speaker 1: smaller companies to light. And as you can see, they're
Speaker 1: all performing really well because, um, most of the performance
Speaker 1: has been outside of the the Amazon story. What are
Speaker 1: some other whole things that you like in there. Yeah,
Speaker 1: So like Roku is a big one that comes up garment.
Speaker 1: So there's all these other companies that are still capitalizing
Speaker 1: office online retail trend. But Amazon like the twenty or
Speaker 1: something or so biggest holding. So that's why I really
Speaker 1: like it. It really takes the focus off of Amazon. Okay,
Speaker 1: number thirteen, This is my millennial pick. It's the Spack
Speaker 1: e t F to definance the next gen SPAC derived
Speaker 1: e t F. Now this one is still really small
Speaker 1: to when you got a few million in it and
Speaker 1: it just launched, But this one seems to check a
Speaker 1: lot of the boxes for these thematic ETFs that do
Speaker 1: really well. Um, it had interest right out of the gate.
Speaker 1: It started trading very heavily. Um you know, it's it's
Speaker 1: capitalizing on this robin hood uh investor base that's looking
Speaker 1: more and more. Thematic spacts obviously have had a fantastic year.
Speaker 1: There's something seventy billion or so raised through spacts this year,
Speaker 1: which is a record. So, um, this SPAC one, it
Speaker 1: checks all the boxes that should do well. I'm actually
Speaker 1: a little bit surprised that it's smaller than it really is.
Speaker 1: But I'd be on the lookout next year, um, because
Speaker 1: it's the only e t F I'll do to play
Speaker 1: SPACs in any way, unless you're buying the specific spacts themselves.
Speaker 1: So um, this one's more of my shocking pick that
Speaker 1: I thought this one would be a lot bigger. And
Speaker 1: also just given how strong thematics have been this year,
Speaker 1: pretty much any thematic ETF has come to the market
Speaker 1: has done really well. They share very early on. So
Speaker 1: I'm a little bit surprised that there's not more bites
Speaker 1: on this back et F yet. Okay, fourteen fourteen is
Speaker 1: a classic. It's us m V which is the I
Speaker 1: S share is minvol et F. And why I brought
Speaker 1: this one back in is because if you look at
Speaker 1: flows this year, it's the first year ever that low
Speaker 1: vall is going to have outflows. Um, And I think
Speaker 1: it's it's more of this foamo right. Low vall tends
Speaker 1: to do well and down markets, uh and tends the
Speaker 1: lag on the way up. And what I thought it
Speaker 1: was interesting because given how volable the market was this year,
Speaker 1: supposed to be in March, these tend to take in assets,
Speaker 1: but they've really been bleeding pretty significantly. And if you
Speaker 1: had bought Loval this shure you're actually lagging SNP by
Speaker 1: which I think is a really significant a significant amount
Speaker 1: to get this on people's radar. So, given what we've
Speaker 1: seen with the FED jumping in and really having the
Speaker 1: markets back, UM, I don't see a lot of interest
Speaker 1: in the U S n B. I think a lot
Speaker 1: of people want to go into the high beta stuff.
Speaker 1: So you're seeing investors move out of low vall and
Speaker 1: it's UM. It's interesting because it's every year it's it's
Speaker 1: been taking in money. It's been good for a couple
Speaker 1: billion every year for some of these issues. But this
Speaker 1: year has been a complete reversal of historically we've seen
Speaker 1: with Manvall okay and your final Okay. The last one
Speaker 1: is a active, non transparent ETF or ANTS as we're
Speaker 1: coining it UM the tickers F d G, which is
Speaker 1: the American Century Focused Dynamic Growth ETF. It's so it's
Speaker 1: a long name, but this one is really my bell
Speaker 1: weather for ants and how well ants are going to do. UM.
Speaker 1: They're really new, right, UM. And the whole point of
Speaker 1: ANTS was that these active funds cannot launch and not
Speaker 1: have to show their holdings daily. UM. So the holdings
Speaker 1: are a little bit lagged, but the performance of this
Speaker 1: has been really good. It's already beating the its benchmark
Speaker 1: by it only launched this year. It has about two
Speaker 1: million dollars in assets. Now we debate this on the
Speaker 1: team that's you know when somewhere more bullish on ants
Speaker 1: than others. But I think this one is if there's
Speaker 1: one that has chance of the group, this is going
Speaker 1: to be the best one. I think. I think it's
Speaker 1: the most interesting strategy that holds names like tesla Um.
Speaker 1: This one is really going to be I think my
Speaker 1: bell Weather to see how well people are are are
Speaker 1: accepting of these new and e t f s. Hey, Morgan,
Speaker 1: how come you didn't pick his spack pick? What why
Speaker 1: did you pass on that? You know? I like the pick.
Speaker 1: I think it's I think it's really interesting. Um, we'll
Speaker 1: have to see, I mean, based on sort of the
Speaker 1: market cap waiting in these like you know, how they
Speaker 1: really play out. Um, this is kind of the second
Speaker 1: go I think spac's got a bad name early on,
Speaker 1: but I think you know, the diversity of of UH managers,
Speaker 1: you know, listing and the expediency to which they can
Speaker 1: they can bring things publicum, this is this might be
Speaker 1: a better round on the first. So yeah, and the
Speaker 1: Spack e t F. The the one thing that I
Speaker 1: that you have to point out is that it's only
Speaker 1: pre I p O SPACs. Those are where you get
Speaker 1: the big pop is after the I p O and
Speaker 1: it's lagging the market this year. It's new, but this
Speaker 1: is one of those E t F that has to
Speaker 1: have some shiny object performance I think, and then people
Speaker 1: will go, oh, yeah, of course this would go up.
Speaker 1: This is like the new I p O market, but
Speaker 1: it needs that performance first. I think that's why I
Speaker 1: think it hasn't really found a lot of It hasn't
Speaker 1: found a big audience yet. Yeah, and this year, I
Speaker 1: mean no road shows. It's kind of interesting that after
Speaker 1: I p O ing, they still didn't get marketed that
Speaker 1: aggressively before I p O. So you know, structurally they
Speaker 1: may they may still get that distribution benefits spread out
Speaker 1: over a bit of time. Comment on Spack real quick.
Speaker 1: It s p a C special purpose acquisition company. The
Speaker 1: e t F is actually s p a K. If
Speaker 1: anyone out there is trying to look up the C
Speaker 1: t F and learn about it, which every time I
Speaker 1: got to look at it. I type in s P
Speaker 1: A C and it goes to a delisted company. Um. Yeah.
Speaker 1: I like the guard PTF, mostly because I genuinely didn't
Speaker 1: even know it existed until eight and brought it up
Speaker 1: when we had our pre talk meeting about this. So uh.
Speaker 1: And I love the idea of growth light, just kind
Speaker 1: of looking at and seeing both the performance and whether
Speaker 1: or not advisors retail investors put their money there. Um,
Speaker 1: it'll be interesting to watch and there's not many others
Speaker 1: that that go after this GARB type strategy. I also
Speaker 1: thought it was interesting that he picked us m V.
Speaker 1: That's one that we've been talking about for years. It's
Speaker 1: a beast what is it thirty billion dollars at this point. Um,
Speaker 1: it's such an easy E t F to sell, right.
Speaker 1: Oh hey, it's the market but with a little less
Speaker 1: you know, volatility or a little less edge, and that's
Speaker 1: always good. It's like diet coke and it's it's basically
Speaker 1: flow off the shelves. But the problem is it's trailing
Speaker 1: the market badly this year, and it shows that some
Speaker 1: of the people in there are fickle. Here's my question
Speaker 1: for both us m V and f d G which
Speaker 1: is a theme I'm gonna look into a lot more
Speaker 1: next year, which is do you get a second bite
Speaker 1: at the apple? Remember currency hedge ttfs, like, really, we're
Speaker 1: on fire. For a couple of years they took in
Speaker 1: I don't know what their peak asset was, maybe sixty billion,
Speaker 1: but then they started underperforming and a large chunk of
Speaker 1: the people left. The assets went down because the market
Speaker 1: was down too, and they were a fraction of their
Speaker 1: old selves. Then they started out performing again and nobody cared. Well,
Speaker 1: U SMV get a second look. If it starts out performing,
Speaker 1: we'll see f DG is in the same boat. You've
Speaker 1: got all these ants. They all have names that you
Speaker 1: remember from the nineties, and it be curious to see
Speaker 1: if somebody goes, Wow, this American Century Fund is really
Speaker 1: doing well, or if they go, yeah, no, I've been there,
Speaker 1: done that. I'm gonna look elsewhere to the next thing,
Speaker 1: you know, maybe like the new Goldman Smart Beta, Like
Speaker 1: I just don't I'm a little hesitant that you get
Speaker 1: a second bite of the apple, and so I'm I'm
Speaker 1: a little bearish in the last two. But they're still
Speaker 1: interesting to watch. That has nothing to do with why
Speaker 1: they are good or bad picks. It's more just my
Speaker 1: take on on their potential for assets in the future.
Speaker 1: All right, let's uh, here are you're five? Bring us home.
Speaker 1: My first pick is the one that I'm the most
Speaker 1: excited to watch all next year, which is the d
Speaker 1: f AU. It's the Dimensional US Core Equity Market et F.
Speaker 1: This is the dimensional is a three D and seventy
Speaker 1: billion dollar active manager. It's our One of our themes
Speaker 1: next year is big Active, sort of like big Pharma.
Speaker 1: It's all these big active shops are finally coming in
Speaker 1: full fullheartedly in the next couple of years. And we
Speaker 1: just talked about ants. D f A is taking a
Speaker 1: different approach. They're gonna put their et F out with
Speaker 1: with transparent so they're not doing the ANT approach. They're
Speaker 1: just gonna let you see the holdings every day and
Speaker 1: it's gonna it's an act of strategy. So they're gonna,
Speaker 1: you know, pick stocks. Although it's based on systemic quant
Speaker 1: methods that they do um and this is a firm
Speaker 1: seeing a lot of outflows, so you know, can they
Speaker 1: turn it around? And now, to me, this e t
Speaker 1: F is like custom made for the advisor's brain. It's transparent,
Speaker 1: it's dirt cheap. At twelve basis points, you've got a
Speaker 1: brand name like d f A, but at Vanguard fees
Speaker 1: it's got low tracking. The top holdings are basically Apple, Microsoft, Amazon,
Speaker 1: Amazon only market share. To me, they took the page
Speaker 1: out of Goldman's playbook when Goldman launched g SLC. And
Speaker 1: remember we did the episode with Colfinberg. This is similar
Speaker 1: to that and that worked. That has ten billion dollars.
Speaker 1: And the beauty of these strategies is they're kind of
Speaker 1: performance proof because the advisor is so scared of getting
Speaker 1: fired that they just want to pick stuff that has
Speaker 1: a good story but won't underperform. And this looks like
Speaker 1: it will not because it's so close to the SMP.
Speaker 1: And I think that's something you should see. Also, d
Speaker 1: f A is going to convert a bunch of mutual
Speaker 1: funds that equal twenty billion in assets. So and that's
Speaker 1: also something that Wall Street banks like JP Morgan and
Speaker 1: Goldman did when they entered. They did a lot of
Speaker 1: B Y O A and they look for opportunities to
Speaker 1: grow their assets quickly. So Golden JP Morgan skipped a
Speaker 1: lot of the sort of oblivion stage of a lot
Speaker 1: of legacy companies coming in late where they just hanging oblivion.
Speaker 1: So they finally do something different and they just ripped
Speaker 1: the band aid off and that's what d f A
Speaker 1: did and I have I'm more bullish on them than
Speaker 1: the ants in terms of big active but we'll see.
Speaker 1: Um the next one, speaking of active, Yeah, next one, uh,
Speaker 1: speaking of active arc a r KK. We don't even
Speaker 1: need to spend that much time to describing this. This
Speaker 1: is Cathy Woods. You know super you know lud chrous mode. Yeah,
Speaker 1: she's in luded, like she's gone plaid. That's a deep
Speaker 1: Spaceballs reference. But yeah, she's on another level. I mean
Speaker 1: a r k K. Let me give you the numbers
Speaker 1: up inception and a hundred and thirty three percent this year.
Speaker 1: That's triple the cues, eight times the SMP and two
Speaker 1: times the Fidelity Growth Fund. Now that Fidelity Growth manager
Speaker 1: is tasked with the same thing to pick road stocks,
Speaker 1: so she's doubling a growth manager. That is how on
Speaker 1: fire she is. And she's inspired like about thirty copycat funds.
Speaker 1: So this will be one we watch for a long time. Um.
Speaker 1: Here's the thing though, as you all know, here I'm
Speaker 1: working on this book about Bogel. So I've been reading
Speaker 1: a bunch of his books and it's hard. You know,
Speaker 1: when you read his books, he goes over the go
Speaker 1: go eras from the sixties and the seventies that they
Speaker 1: happened like once every fifteen years, or uh, sell off
Speaker 1: happens once every fifteen years, and you realize there's funds
Speaker 1: like this in every era, and they end up getting
Speaker 1: a lot of assets, people say their geniuses, and then
Speaker 1: a crash hits or a correction, and they usually go
Speaker 1: down more than than the market and people leave and
Speaker 1: then what they get back going again, but nobody cares
Speaker 1: or they can never get back to that again. It's
Speaker 1: the second bite of the apple. Is she a star
Speaker 1: here to stay? Or more like a comment? And that's
Speaker 1: something that we're going to find out. UM s val
Speaker 1: this is the it's opposite of Cathy Wood. This is
Speaker 1: the small cap value e t F from I Shares. UH.
Speaker 1: It's you know, it's a small cat value stocks. It's
Speaker 1: got a quant screen for liquidity, um volatility, leverage, and
Speaker 1: an analyst sentiments. It's got a smart cap smart beta
Speaker 1: kind of filter, and then it ranks this highest scoring stocks.
Speaker 1: UM the top two fifth. Now, I like that it's
Speaker 1: concentrated to fifty means you're gonna rip when it works,
Speaker 1: and that's what happened when you look at the small
Speaker 1: cap value run. That happened from basically since the vaccine
Speaker 1: from Feiser was was that news broke for about three weeks,
Speaker 1: there was a huge rotation the quote reopening trade and
Speaker 1: this thing was up twenty m one per cent during
Speaker 1: that time, more than the other small cap value et
Speaker 1: f s, which hold more stocks, so they're gonna be
Speaker 1: a little more anchored. UM. So I think if you
Speaker 1: have a regime change, we're small cap value or value
Speaker 1: or small caps just you know, has a five or
Speaker 1: ten year run, this thing probably will be at the
Speaker 1: top of the list performance wise because of that concentration.
Speaker 1: It's also very cheap for a potential shiny object type
Speaker 1: ETF at twenty bits. Normally you only step pricing for
Speaker 1: the ones that are sort of more disguise beta. UM.
Speaker 1: The other final note on this is, I don't know
Speaker 1: what's going to happen. We could have, like the Queues
Speaker 1: have another amazing decade, But I just want to remind
Speaker 1: people that in the two thousands that's a decade before
Speaker 1: this last one. If you look at the return, small
Speaker 1: cap value return returns seven point five percent annually that decade.
Speaker 1: The SMP returned nothing, and so in the twenty years
Speaker 1: since then, small cat values still beating the SMP. That's
Speaker 1: how bad corrections are for the SMP UM. And it
Speaker 1: also just shows you that things do change. So again
Speaker 1: I'm sort of looking forward to if and when there
Speaker 1: could be a regime change, look for s vl UM.
Speaker 1: My other one is another one is m s o S.
Speaker 1: This is the advisor Shares Pure Cannabis etf UM. I
Speaker 1: work with Ken scha or cannabis analyst a lot and
Speaker 1: he has some great data showing that like legal cannabis
Speaker 1: sales in the US may hit sixteen billion this year
Speaker 1: versus only two point eight billion for Canada. Yet most
Speaker 1: of the exposure in the potty tfs is in Canadian companies.
Speaker 1: The reason for that is because UM, you're not really
Speaker 1: allowed to invest directly and what's called multi state operators
Speaker 1: in the US. So this e t F uses swaps
Speaker 1: to sort of cleverly sidestep that rule. Long story or
Speaker 1: it's basically a US exposure UM with that going to
Speaker 1: the M S O S. So that's the way more
Speaker 1: than any others. So these are companies like Green Thumb,
Speaker 1: truely pure Leaf. They're all significantly up. And if you
Speaker 1: look at M S O S versus MJ, it's up
Speaker 1: since versus so again, not having those Canadian companies could
Speaker 1: really help this thing in the future. UM. And then
Speaker 1: my final pick is boring but beautiful b t I.
Speaker 1: This is the Vanguard total market. To me, this is
Speaker 1: the perfect e t F. It's pretty much flawless. I
Speaker 1: have My opinion is this is the most likely to
Speaker 1: take over. Spy is the biggest d t F UM
Speaker 1: in the next five or ten years, even though i
Speaker 1: VV has more. This is the third biggest currently. But
Speaker 1: here's here's why I gotta watch out for this one.
Speaker 1: The test less situation with the SNP. To me, I
Speaker 1: think it may have hurt the SMP brand. I don't know.
Speaker 1: It's an amazing brand, it's rock star. Maybe it's just
Speaker 1: beyond that kind of stuff. But the idea that that
Speaker 1: SMP the s is gonna lag beta e t F
Speaker 1: such as the Russell one thousand or the Bloomberg five hundred,
Speaker 1: I don't know. It could it could irk people um
Speaker 1: that Tesla not having it costed about one percent this year.
Speaker 1: Now v t I invested in everything. So v t
Speaker 1: I has had Tesla for ten years basically, and TESS
Speaker 1: has contributed to two point seven percent or one percent
Speaker 1: of its total return of two um. So you don't
Speaker 1: have to worry about whether you know the new stock
Speaker 1: is in it or not because it tracks small caps.
Speaker 1: I also like the fact that it's regime change proof.
Speaker 1: So we talked about small value. What a small value
Speaker 1: has like a ten year run and the SNP lags,
Speaker 1: it won't really matter too much with v t I.
Speaker 1: You're gonna have those stocks in there anyway. Um. So
Speaker 1: to me, vt I reminds me of that line in
Speaker 1: the movie Almost Famous. Remember when the young journalist the
Speaker 1: Rolling Stone Journalists talks to the sort of grizzled old
Speaker 1: like rock critic played by Philip symour Hoffman and he says, yeah,
Speaker 1: my kids are in the high school. Don't like me,
Speaker 1: and he goes, don't worry, you'll you'll see them all
Speaker 1: again in a long road to the middle. And I
Speaker 1: just think v t I is the long road to
Speaker 1: the middle. Whether it's value growth, small, large, these things
Speaker 1: have their day and then they have they're in the doghouse.
Speaker 1: V T I generally is gonna be where they all
Speaker 1: end up, you know, over thirty forty years. So to me,
Speaker 1: this is just like the sort of like the the
Speaker 1: ultimate play on the market and something I'm watching next
Speaker 1: year and every year after. James, what do you make
Speaker 1: of that marijuana pick? So I I like I I
Speaker 1: like ms os just because of basically what Eric said.
Speaker 1: I mean, if if there's anything happening with US legalization,
Speaker 1: whether it's federally or more states, those are the stocks
Speaker 1: that are going to benefit the most. I actually did
Speaker 1: some research on this and created like an index of
Speaker 1: just ms like multi state operators, some that are included
Speaker 1: in that ets, some that aren't. And I mean just
Speaker 1: since March that thing, it's the market cap of all
Speaker 1: those companies is up three hundred and thirty five So
Speaker 1: we're talking like massive growth. A lot of that's on
Speaker 1: the referendum from the election in November to states past
Speaker 1: legalization in different matters. But if you're looking for legalization
Speaker 1: in the US and you're buying MJ I mean it's
Speaker 1: just too exposed to Canada to who truly benefit. And
Speaker 1: one could argue that even legalization the US might even
Speaker 1: be a bad thing for some of those Canadian companies,
Speaker 1: which we saw some of those Canadian pot companies or
Speaker 1: marijuana companies actually saw a negative impact. So definitely something
Speaker 1: to be watching going forward, especially at the US political landscape.
Speaker 1: And Morgan, what about what about ARC? Yeah? That was
Speaker 1: like a no brainer, right, Yeah, pretty classic pick. But
Speaker 1: I mean I think it would be crazy to say
Speaker 1: we're not watching it next year. You know, I think
Speaker 1: they they are high conviction shop and they are full transparencies.
Speaker 1: We actually get to see what their high conviction choices
Speaker 1: are here. But you know, they're trying to blend in
Speaker 1: this fund. They're sort of including all their innovation platforms
Speaker 1: um and so you really get a taste of kind
Speaker 1: of full range here. So always interesting to watch and
Speaker 1: see where their high conviction is. Sarah Vegas, what do
Speaker 1: you make of the busses pick? Yeah, the d f
Speaker 1: AU one is interesting. Well, I don't think the product
Speaker 1: itself is that interesting. It's the it's d f A pick.
Speaker 1: I like, um, you know, they launched these few ETFs,
Speaker 1: then they did this massive conversion right behind it, so
Speaker 1: they're coming into the industry with a bullet, they're now
Speaker 1: going to be like the eleventh biggest issue where in
Speaker 1: the market. So they came in very very aggressively. So
Speaker 1: and what we've seen is firms that have done this,
Speaker 1: the ones that really take it seriously and come come
Speaker 1: in very aggressively are the ones that do tend to
Speaker 1: do a little bit better. So, UM, that's that's a
Speaker 1: really good pick. I think to judge how d f
Speaker 1: A and frankly, how other active managers are going to follow.
Speaker 1: Going back to ARC specifically, everyone likes to talk about ARC,
Speaker 1: and Cathy would, but she has another product this year
Speaker 1: that's beating ARC a r k K and everyone likes
Speaker 1: to talk about ARC as a bubble bubble product. It's
Speaker 1: getting all of its benett from Tesla, but air KG
Speaker 1: doesn't hold Tesla's that you know, bout revolution et F,
Speaker 1: which is another example of just how on fire Cathy
Speaker 1: would has been. Um. The other thing is Tesla. It's
Speaker 1: it's a big it's the largest contributor to a r
Speaker 1: k K, but it's only contributed sevent of those returns
Speaker 1: or since its inception, so it's not like it's solely
Speaker 1: a test of fund. They're making a lot of other
Speaker 1: high concentration bets, doing a lot of trading around their portfolio. Um,
Speaker 1: that's generating alpha for them. So you hear a lot
Speaker 1: of like financial media and Twitter talking about how bad
Speaker 1: these products are, but when you dive in, it's not
Speaker 1: really as um concentrated or solely due to one or
Speaker 1: two stocks. It's a very They're getting a lot of
Speaker 1: breath from their performance. Okay, hey, Eric, I want to
Speaker 1: ask you at at Business Week, we do this thing
Speaker 1: called the Jealousy List every year, which is we ask
Speaker 1: a ton of the editors and writers, photo design, et cetera.
Speaker 1: What was the one story that you were most jealous
Speaker 1: of that we did not publish? And I want to
Speaker 1: ask you, of all your team's picks, whose pick are
Speaker 1: you most jealous of that wasn't your own. I'll go
Speaker 1: with I c VT Morgan's pick. Um actually just forgot
Speaker 1: it existed. I mean every other one that was picked
Speaker 1: I pretty I mean at least I knew about um.
Speaker 1: This is just one. You know, when it comes to
Speaker 1: like prefers and convertibles and some of the stuff that's
Speaker 1: sort of a little on the more wonky side, these
Speaker 1: are ones that you sometimes forget about when you're constantly
Speaker 1: looking at say the aggregate bond ETFs or uh, you know,
Speaker 1: the high yield um and I like it, and it's
Speaker 1: I looked at it's it's over a billion dollars, so
Speaker 1: it's a you know, study t F. It's twenty BIPs
Speaker 1: and yeah, I think it's great. And the returns were shocking.
Speaker 1: If you had asked me how much this was up
Speaker 1: this year, I would have been way off. So I
Speaker 1: just like that. I was completely surprised by it. And
Speaker 1: I honestly just you know, one of those ones you
Speaker 1: just don't even realize is there, to be honest, which
Speaker 1: at a billion dollars is probably not a good thing
Speaker 1: to say about myself as an analyst. I mean, I
Speaker 1: should probably have had that one in my mind, but
Speaker 1: I just didn't. All Right, So I'm no math wizard,
Speaker 1: but I do have a kindergardener that you know is
Speaker 1: doing zoom kindergarten, and we're doing a lot of math together.
Speaker 1: There's four of you. You each had five picks. That
Speaker 1: brings us to twenty. How do we get to so? Um?
Speaker 1: We were thinking about that and as we looked at
Speaker 1: our list, two things. One we felt we had undersold
Speaker 1: fixed income a little bit, but then too, one of
Speaker 1: our big themes this year is in our outlook is
Speaker 1: fixed income. So we decided to pick l q D
Speaker 1: as one that we're watching next house. Pick Team, Pick,
Speaker 1: Team Pick. This is the cherry on top of what's
Speaker 1: already a large cake. Yeah, and what is it again?
Speaker 1: It's it's a I shares investment gray bondy TF. It's
Speaker 1: it's sort of become, as James put in his notes,
Speaker 1: sort of the new bond dealer, as there's less inventory
Speaker 1: at at traditional bond dealers. People use this thing all
Speaker 1: the time for many different purposes, like a giant hotel
Speaker 1: with all kinds of people coming in and out of it.
Speaker 1: And this this mart sell off. Um. It's volume exploded um,
Speaker 1: and people leaned on it and it worked. And then
Speaker 1: the FED said they're going to buy E T f
Speaker 1: S and the one they own the most of is
Speaker 1: l q D. Was it was a wonderful endorsement for
Speaker 1: E T S, I think and the assets and this
Speaker 1: thing doubled from the March low of twenty eight billion,
Speaker 1: they're now at fifty seven billion dollars. It's rare to
Speaker 1: get a asset growth in an e t F that's
Speaker 1: already massive, and so we're gonna see what happens next year.
Speaker 1: This thing will be interesting. Will the Fed potentially look
Speaker 1: to equity e t f s, Will they start unloading
Speaker 1: their bond ETFs? Either way, we're very bullish fixed income.
Speaker 1: This is one of those things where the Fed putting
Speaker 1: its money behind. And one it was a lot of
Speaker 1: people trying to front run, but also it's kind of
Speaker 1: ended up like a snowball as more trading happens, as
Speaker 1: more money comes into it, more and more people are
Speaker 1: going to start using it kind of as a bond
Speaker 1: dealer as you mentioned, and the other it's just becomes
Speaker 1: more liquid and more institutional attention, and that all of
Speaker 1: that kind of snowballs onto each other. UM. So this
Speaker 1: is something we're watching to see how long that snowball
Speaker 1: can go on, um and will it continue. James Morgan, Tom,
Speaker 1: thank you so much for joining us on Trillions. Thank you,
Speaker 1: thanks for having us, Thanks for listening to Trillions until
Speaker 1: next time. You can find us on the Bloomberg terminal,
Speaker 1: Bloomberg dot com, Apple Podcasts, Spotify, and where else you'd
Speaker 1: like to listen. We'd love to hear from you. We're
Speaker 1: on Twitter. I'm at Joel Webber Show. He's at Eric Falcinos.
Speaker 1: You can find Morgan at M Barnes six, James at
Speaker 1: J SEF, and Athanacios at Ta Sara Phagas. As always,
Speaker 1: good luck spelling that one. This episode of Trillions was
Speaker 1: produced by Magnus Hendrickson. Francesca Levie is the head of
Speaker 1: Bloomberg Podcast. Bye.