WEBVTT - F-R-E-E-D-O-M 0:00:06.000 --> 0:00:08.720 What kind of trains. I'm Joel Weber and I'm Eric Beltuns. 0:00:11.600 --> 0:00:15.200 Eric who were going to talk to today? Perth? Who? She? 0:00:15.440 --> 0:00:19.000 She's somebody that I've bumped into several times on the circuit, 0:00:19.440 --> 0:00:22.640 the E t F conference circuit and various events. Just 0:00:22.840 --> 0:00:26.120 really nice person. Very Uh it's a distinct name. I 0:00:26.120 --> 0:00:29.240 remember she's actually been on the podcast before. Yeah, we 0:00:29.560 --> 0:00:31.520 got a little clip of her from inside et F 0:00:31.600 --> 0:00:33.440 S and she was on E t F i Q 0:00:33.600 --> 0:00:36.120 there's the TV show I do about a year ago ish. 0:00:36.680 --> 0:00:39.160 And what's interesting about Perth is I've been bumping into 0:00:39.159 --> 0:00:42.760 her this whole time, and she's just had an index 0:00:43.200 --> 0:00:46.680 and a dream for a couple of years. And this 0:00:46.840 --> 0:00:48.440 is always one of our favorite things about T t F. 0:00:48.520 --> 0:00:51.240 And yes, there's a Silicon Valley element to it all, 0:00:51.560 --> 0:00:55.880 and Perth, to me embodies the Silicon Valley element and 0:00:55.960 --> 0:00:59.080 the indie world as I call it. And finally her 0:00:59.080 --> 0:01:02.200 E t F is coming to light. So it's called 0:01:02.240 --> 0:01:05.959 the Freedom one hundred Emerging Markets TTF. It's basically a 0:01:06.040 --> 0:01:10.119 freedom weighted and filtered version of the Emerging Markets. It's 0:01:10.160 --> 0:01:11.800 kind of an easy E s G type tilt on 0:01:11.840 --> 0:01:13.800 it so not only is that a lot to dig 0:01:13.840 --> 0:01:16.960 into what's going on there, um, but the story of 0:01:16.959 --> 0:01:20.560 how the e t F got to daylight is also fascinating. 0:01:20.640 --> 0:01:22.639 So I just thought there was a couple of angles 0:01:22.640 --> 0:01:28.800 here that we're really a lot to dig into this time. 0:01:28.800 --> 0:01:34.640 I'm trying Freedom Investing with Perth Toll High person. You're 0:01:34.720 --> 0:01:37.640 joining us from Houston. How's Houston today? Hello? It's a 0:01:37.720 --> 0:01:40.520 humid as usual? I bet it is so so, Perth, 0:01:40.600 --> 0:01:42.959 what are you bringing to market here? So? I am 0:01:43.200 --> 0:01:45.479 bringing to market and e t F called the Freedom 0:01:45.480 --> 0:01:47.720 one hundred Emerging Markets e t F, and I'm doing 0:01:47.720 --> 0:01:51.680 this in conjunction with Alf Architect, who is our issuing partners. 0:01:51.880 --> 0:01:53.960 He's been on the show West Grade. We know well, 0:01:54.040 --> 0:01:56.680 I know well, Um, he is was from the he 0:01:56.720 --> 0:01:59.480 was in the Marines and then he is now a 0:01:59.600 --> 0:02:03.600 quant and he does sort of more hardcore smart beta 0:02:03.640 --> 0:02:06.560 factory ETFs. That's just background on West and that's why 0:02:06.880 --> 0:02:11.560 potentially Freedom uh caught his attention because of the Marines background. Yeah, 0:02:11.600 --> 0:02:15.520 So the Freedom one hundred Emerging Markets et F would 0:02:15.520 --> 0:02:18.720 be based on the Freedom one hundred Emerging Markets Index. 0:02:19.160 --> 0:02:21.280 And I'm just gonna stick with talking about the index, 0:02:21.320 --> 0:02:23.840 because that's my part of it. UM and the index 0:02:23.880 --> 0:02:28.560 is basically a freedom weighted emerging markets approach. So UM. 0:02:28.600 --> 0:02:31.840 What I noticed with the emerging market indexes as an 0:02:31.840 --> 0:02:35.280 investor is that they are, you know, the market cap 0:02:35.320 --> 0:02:37.520 weighted ones, and most of them are market cap weighted 0:02:37.560 --> 0:02:40.440 on the country level. They have a very high allocation 0:02:40.680 --> 0:02:43.800 to China. So they have about thirty five allocation to China. 0:02:43.840 --> 0:02:46.440 If you look at all of them UM M, s 0:02:46.440 --> 0:02:49.919 c I, foot see SMP, they all have about thirty 0:02:50.000 --> 0:02:53.120 to thirty percent in China. UM Footsie already has added 0:02:53.160 --> 0:02:56.600 a shares and ms C I is adding a shares now, 0:02:57.040 --> 0:02:59.799 so that will only increase. And that's a huge allocation 0:03:00.480 --> 0:03:04.639 UM to one concentrated country that is somewhat high risk 0:03:04.680 --> 0:03:09.320 as far as geopolitics go. UM And the reason why 0:03:09.400 --> 0:03:12.480 I personally didn't want kind of a China fund in 0:03:12.480 --> 0:03:16.000 disguise in my investments in my emerging markets UM index 0:03:16.040 --> 0:03:19.000 funds is I am actually from China. I grew up 0:03:19.240 --> 0:03:20.880 half in China and half in the US. I was 0:03:20.960 --> 0:03:25.680 born in Beijing, and I, you know, being somewhat familiar 0:03:25.720 --> 0:03:28.600 with the situation over there after living and working there 0:03:28.639 --> 0:03:33.080 after college. UM I kind of didn't want my my 0:03:33.120 --> 0:03:37.480 investment dollars to be allocated that way, So that's why 0:03:37.560 --> 0:03:43.720 I created the freedom weighting methodology, which basically gives freer 0:03:43.720 --> 0:03:47.520 countries a higher weight in the index, less free countries 0:03:47.560 --> 0:03:50.640 a lower weight, and the worst offenders as far as 0:03:50.720 --> 0:03:53.800 human rights and economic freedoms are eliminated from the index. 0:03:54.360 --> 0:03:57.960 So who gets the biggest waiting? Taiwan actually has the 0:03:57.960 --> 0:04:01.880 biggest waiting currently, so it's Hiwan, South Korea, Chile, and 0:04:01.920 --> 0:04:04.760 Poland with the biggest waitings. You know, if you look 0:04:04.800 --> 0:04:06.920 at v w OH, that's the big emerging markets ETF. 0:04:07.080 --> 0:04:10.720 China is a thirty waiting and that's only going to 0:04:10.760 --> 0:04:13.480 go up as a shares get more included. So China, 0:04:13.520 --> 0:04:16.960 could your your e t F is going to differ 0:04:17.160 --> 0:04:21.000 pretty drastically from the more popular emerging markets. Yes, so 0:04:21.040 --> 0:04:24.440 we have actually zero China allocation because of their freedom 0:04:24.480 --> 0:04:28.080 scores which we get from a third party. Um, they 0:04:28.120 --> 0:04:31.960 are eliminated from the They're excluded completely. Um. But we 0:04:32.000 --> 0:04:34.760 do have high allocations in Taiwan and South Korea, which 0:04:34.760 --> 0:04:37.400 are very free emerging markets. So it's kind of a 0:04:37.400 --> 0:04:40.640 happy accident that we have low tracking yourr um with 0:04:40.720 --> 0:04:44.799 high active share because those those markets are highly correlated. 0:04:45.200 --> 0:04:48.160 So what was that? What was a memory from your 0:04:48.200 --> 0:04:52.120 time in China? If you can share one that informed 0:04:52.720 --> 0:04:56.560 what's become your investing thesis here. Yeah, so there's there's 0:04:56.600 --> 0:05:01.000 a lot of things that I saw in China. Um, 0:05:01.040 --> 0:05:02.720 both as a child when I was growing up there 0:05:02.760 --> 0:05:07.440 and also when I went back after college. UM. I 0:05:07.480 --> 0:05:11.279 do remember things from from you know, childhood, like before 0:05:11.320 --> 0:05:14.799 I was nine, where somebody would say something politically sensitive 0:05:14.880 --> 0:05:17.000 and then somebody else, like an adult, and then an 0:05:17.360 --> 0:05:19.080 adult would say, oh, you know, don't say that the 0:05:19.160 --> 0:05:21.240 next near the kids, like they'll hear you, or they'll 0:05:21.279 --> 0:05:24.400 repeat it. Or there was one time my my grandfather 0:05:25.040 --> 0:05:27.520 in his library had all these books and I I 0:05:27.560 --> 0:05:30.839 found a book that had a story about two people 0:05:30.920 --> 0:05:34.000 in a garden. Um, I guess that's the beginning of it. 0:05:34.080 --> 0:05:37.320 So now I realized it was probably a Bible. My 0:05:37.440 --> 0:05:41.200 grandfather was his life was saved by a Christian missionary 0:05:41.279 --> 0:05:44.320 doctor in the in the World War two, UM, so 0:05:44.400 --> 0:05:47.599 he probably did have a Bible. UM. And then I 0:05:47.600 --> 0:05:50.720 remember my grandmother getting really mad at him that I 0:05:50.760 --> 0:05:53.040 had found that, and I never saw it again. UM, 0:05:53.120 --> 0:05:55.200 so things like that. But also, and I don't think 0:05:55.200 --> 0:05:57.920 I've ever told those two before, but when I went 0:05:57.960 --> 0:06:01.800 back to Hong Kong after college, that's when I realized, Wow, 0:06:01.880 --> 0:06:04.400 my life would have been completely different had I never 0:06:04.440 --> 0:06:07.840 gone to the States. UM. And then, you know, for example, 0:06:08.400 --> 0:06:10.520 I'm a child of the I'm a product of the 0:06:10.520 --> 0:06:15.040 one child policy. UM. And I met a friend there, Maggie, 0:06:15.160 --> 0:06:18.080 who was in Shanghai at the time. We traveled to 0:06:18.240 --> 0:06:22.760 Shanghai and Beijing often from Hong Kong, and she was basically, 0:06:22.800 --> 0:06:25.600 you know, very similar to me. She was the exact 0:06:25.600 --> 0:06:28.000 same age um, and we had a lot of common 0:06:28.040 --> 0:06:31.080 interests and basically just like any other of my friends 0:06:31.120 --> 0:06:33.880 who would be my age um in the US. But 0:06:33.920 --> 0:06:37.479 the only difference was she didn't exist on paper in China. 0:06:37.600 --> 0:06:41.440 She doesn't have a birth certificate or state benefits or 0:06:41.480 --> 0:06:44.760 you know, hospital records or school records because she was 0:06:45.040 --> 0:06:47.560 UM a girl. And they this family had two children, 0:06:47.960 --> 0:06:51.400 and they they registered the boy for school for existence. 0:06:51.680 --> 0:06:54.800 So you know, yeah, so as a product of the 0:06:54.800 --> 0:06:58.159 one child policy, I saw when I went back there, 0:06:58.279 --> 0:07:03.400 UM very clearly at you know, freedom matters, UM. Looking 0:07:03.440 --> 0:07:06.320 at just the Hong Kong market at the time versus 0:07:06.400 --> 0:07:10.520 mainland market, there was a difference. And there's also obviously 0:07:10.560 --> 0:07:14.200 a difference between US markets and Chinese markets and so 0:07:15.120 --> 0:07:18.760 um and and policies matters, so policies and governance. So 0:07:18.800 --> 0:07:20.920 for example, this one child policy which is now the 0:07:20.920 --> 0:07:23.960 too child policy, you know, it changed the culture of 0:07:23.960 --> 0:07:27.600 my generation, not to mention all the societal and economic 0:07:27.640 --> 0:07:29.800 effects is going to have. You know, now it's too 0:07:29.880 --> 0:07:33.280 child policy, but no one's having two children because the 0:07:33.320 --> 0:07:36.120 culture has changed. And what was the spark that made 0:07:36.160 --> 0:07:41.880 you realize that capital markets could be a change agent here? Um? 0:07:41.920 --> 0:07:44.920 I think it's when I was working as a financial 0:07:44.920 --> 0:07:47.240 advisor of Fidelity and I saw that a lot of 0:07:47.280 --> 0:07:50.760 my clients wanted to invest in China and wanted to 0:07:50.760 --> 0:07:55.560 invest in emerging markets. But we as Americans sometimes project 0:07:55.680 --> 0:07:59.200 our own optimism onto these other places. We can't imagine 0:07:59.800 --> 0:08:01.960 the stuff that goes on um as far as human 0:08:02.040 --> 0:08:04.800 rights abuses and things like that, So you know, to us, 0:08:04.800 --> 0:08:07.720 they don't exist because we can't even fathom it. And 0:08:07.760 --> 0:08:10.280 then as far as my own personal investments, not wanting 0:08:10.720 --> 0:08:14.800 my investment dollars to be allocated to some of these regimes, 0:08:15.080 --> 0:08:18.120 that are more authoritarian and had you know, more human 0:08:18.200 --> 0:08:21.280 rights abuses. UM. I think that's that was the catalyst, 0:08:21.360 --> 0:08:25.680 Like a combination of working in finance, seeing clients want 0:08:25.720 --> 0:08:28.880 to invest in this without knowing what they're actually investing in, 0:08:29.240 --> 0:08:40.840 and also my personal UM, my personal investing preferences and 0:08:41.000 --> 0:08:45.360 perth when you back tested this, how did it perform? 0:08:45.360 --> 0:08:48.280 So it does track very well too. We use ms 0:08:48.280 --> 0:08:51.760 c I UM as our backtesting benchmark, and it does. 0:08:51.840 --> 0:08:55.200 It does perform very well, like very It tracks the 0:08:55.280 --> 0:08:58.040 ms c I pretty closely. It does have a slight 0:08:58.120 --> 0:09:01.440 alpha ad over the five year UM and we do 0:09:01.559 --> 0:09:05.240 expect to see some alpha over time. Though we are 0:09:05.840 --> 0:09:10.000 creating this as as more of a differentiated emerging markets 0:09:10.000 --> 0:09:13.520 exposure that is freedom weighted, so it's it's not necessarily 0:09:13.559 --> 0:09:17.079 we're promising that every year it's gonna you know, beat 0:09:17.120 --> 0:09:20.200 the other UM in the market cap weighted indexes. But 0:09:20.320 --> 0:09:24.400 freer countries are expected to perform you know, more sustainably 0:09:25.160 --> 0:09:28.680 over time, and they do from what what we found 0:09:28.679 --> 0:09:32.280 in our back tests. They recover faster, and you know, intuitively, 0:09:32.360 --> 0:09:34.720 you know that they use their human and economic capital 0:09:34.800 --> 0:09:37.160 or their capital and labor more efficiently so they have 0:09:37.280 --> 0:09:40.520 less capital flight and less capital destruction. And you see that, 0:09:40.880 --> 0:09:42.719 you know, and I use China as a kind of 0:09:42.760 --> 0:09:44.800 a poster child example for all of this because it 0:09:44.840 --> 0:09:47.199 does have such a high weight in the other indexes. 0:09:47.240 --> 0:09:48.800 But yeah, you kind of see that in China, like 0:09:48.840 --> 0:09:51.520 a lot of money tries to come out, people try 0:09:51.559 --> 0:09:53.960 to come out, So you lose a lot of capital 0:09:54.000 --> 0:09:57.160 and labor um to freer countries if you're more of 0:09:57.160 --> 0:10:00.439 an unfree country. And so we do expect that over time, 0:10:00.760 --> 0:10:03.959 especially in emerging markets where there's such a huge discrepancy 0:10:04.000 --> 0:10:07.040 between freedom levels, We believe that there is opportunity there 0:10:07.080 --> 0:10:09.680 for alpha. Can you just break down for us why 0:10:09.840 --> 0:10:12.760 China was eliminated? Like what, what where? Did you flag 0:10:12.800 --> 0:10:17.480 them that? And could they improve that? Yeah, so China 0:10:17.559 --> 0:10:20.079 has made a lot of improvements over the last thirty 0:10:20.120 --> 0:10:22.360 years as far as their economic freedoms, opening up a 0:10:22.360 --> 0:10:25.280 little bit more um, and that has created you know, 0:10:25.679 --> 0:10:29.640 a huge drastic effect on their on their market and 0:10:29.640 --> 0:10:33.120 living living standards and so forth. But investors saw very 0:10:33.120 --> 0:10:36.080 little of that. A lot of that, you know, remained 0:10:36.160 --> 0:10:42.480 in state owned enterprises and and honestly disappeared from investment returns. 0:10:42.600 --> 0:10:44.880 So and you see that happen a lot in the 0:10:44.960 --> 0:10:48.520 more un free markets, is that investors don't take part 0:10:48.720 --> 0:10:52.520 in the in the growth quite as much UM. But 0:10:52.559 --> 0:10:56.280 as far as why they're not in this index currently, yeah, 0:10:56.320 --> 0:11:00.199 their economic freedoms are still lower than UM relative than 0:11:00.679 --> 0:11:03.800 some of their peers, but it's really their human freedom 0:11:03.920 --> 0:11:08.559 UM scores that that caused them to be to be 0:11:08.640 --> 0:11:10.880 excluded from the index. So we look at both human 0:11:10.920 --> 0:11:15.200 and economic freedoms and we use we use the Fraser Institute, 0:11:15.240 --> 0:11:19.200 Cato Institute, and Friedrich Naman Foundation for Freedoms UM data 0:11:19.240 --> 0:11:22.439 set on human and economic freedom. So it's a combined 0:11:22.640 --> 0:11:27.280 score of seventy nine variables including what I categorized into 0:11:27.280 --> 0:11:29.360 the rights to life, the rights to liberty, and the 0:11:29.440 --> 0:11:33.120 rights to property. So is their rights to life and 0:11:33.160 --> 0:11:37.760 liberty or civil and political freedoms that caused China to 0:11:38.720 --> 0:11:41.440 not currently be in the index. So you've got this 0:11:41.520 --> 0:11:44.880 great idea of Perth and now it is coming to market. 0:11:45.559 --> 0:11:50.559 You're effectively like a gladiator who's just stepped into the ring. Right, 0:11:50.760 --> 0:11:52.960 So what does success look like? And by the way, 0:11:53.040 --> 0:11:54.599 let me just set up the ring here. Okay, we 0:11:54.720 --> 0:11:58.840 try to call the terrorism I cannot understate or overstate 0:11:58.920 --> 0:12:02.840 rather how brutal the E T F industry is, especially 0:12:02.880 --> 0:12:06.040 for an indie. This is like, this is like um 0:12:06.080 --> 0:12:09.040 pers walking in as a human amongst all these gigantic 0:12:10.000 --> 0:12:12.920 monsters and beasts, Vanguard and black Rock, and they will 0:12:12.920 --> 0:12:16.319 squash you so quickly, they'll copy your idea, they'll undercut 0:12:16.400 --> 0:12:19.520 you on fees. But shot you do that, You you 0:12:19.559 --> 0:12:24.080 are David to the goliath. What's your plan of action? Thanks? Eric, 0:12:24.200 --> 0:12:31.280 That's that's great. So it doesn't feel exactly like that actually, 0:12:31.360 --> 0:12:35.920 So um I do know that, you know, we are 0:12:36.000 --> 0:12:39.520 coming up against a lot of industry forces that are 0:12:39.800 --> 0:12:43.880 not favorable to indie issuers and two new types of 0:12:43.920 --> 0:12:47.520 approaches and and yeah, we we don't have the pricing 0:12:47.559 --> 0:12:49.720 power that some of these in the Big three have. 0:12:50.480 --> 0:12:52.720 Um I think what we do have, though, is is 0:12:53.040 --> 0:12:56.520 enough of a differentiation and idea. So it's different enough 0:12:56.640 --> 0:13:00.559 concept that you know we are going to have first 0:13:00.559 --> 0:13:03.959 to market. We are the only one doing it. Um 0:13:04.040 --> 0:13:07.080 I talked with some some very well known investors and 0:13:08.120 --> 0:13:11.920 people that that you know, my partners are surprised would 0:13:11.960 --> 0:13:16.320 be interested in in taking part in our kind of adventure. Here, 0:13:16.800 --> 0:13:19.960 and what I think those investors see in this is 0:13:20.160 --> 0:13:23.000 one they resonate with the freedom idea. So I'm hoping 0:13:23.040 --> 0:13:26.400 that investors to will resonate with that um and that 0:13:26.440 --> 0:13:29.440 will attract people who care about freedom and want to 0:13:29.480 --> 0:13:32.400 invest in a way that aligns with those values. But 0:13:32.520 --> 0:13:36.240 also I think it's just it's different enough that you 0:13:36.320 --> 0:13:38.520 really can't get it anywhere else currently. I just did 0:13:38.559 --> 0:13:41.200 a quick search on f search on the terminal for 0:13:41.520 --> 0:13:44.079 e M that has less than one percent China. These 0:13:44.080 --> 0:13:46.920 are e M ETFs. There's a handful, but a lot 0:13:46.960 --> 0:13:49.280 of them I'm going to eliminate because their leverage or 0:13:49.320 --> 0:13:51.599 just have something we're going on. But like x C 0:13:51.800 --> 0:13:54.680 e M is one Columbia e M core x China, 0:13:54.880 --> 0:13:56.480 Like that whole thing is like we're just gonna go 0:13:57.160 --> 0:14:00.000 e M and we're just gonna kill China yours again, 0:14:00.000 --> 0:14:03.120 and I think more thoughtful. But think obviously Columbia wouldn't 0:14:03.120 --> 0:14:04.200 have done this if they didn't think there was some 0:14:04.240 --> 0:14:07.760 market for somebody who wanted something like this. So Perth 0:14:07.920 --> 0:14:10.440 in my view, when these Indians come out with these products, 0:14:10.920 --> 0:14:12.920 I think you've got two angles here. You can sell 0:14:12.960 --> 0:14:15.640 the story, but the story probably is going to be 0:14:16.280 --> 0:14:20.120 really much more sellable, if you will, when China has 0:14:20.160 --> 0:14:23.120 a rough couple of years and your E T F 0:14:23.160 --> 0:14:26.400 outperformance E M and VW O in spades, and then 0:14:26.400 --> 0:14:28.480 I think the story is going to really take hold. 0:14:28.520 --> 0:14:32.440 I have seen this happen before and before with robotics, cybersecurity. 0:14:32.480 --> 0:14:34.560 I think that's usually the key for these niche players. 0:14:34.800 --> 0:14:37.320 So you should probably root for China to have a 0:14:37.400 --> 0:14:40.360 rough go of it right now. I do want to 0:14:40.360 --> 0:14:43.120 be clear that I'm not rooting for China to fail. 0:14:44.520 --> 0:14:46.920 This is not an ex China fund so this is 0:14:47.000 --> 0:14:49.480 you know, I hope China can can be in the index, 0:14:49.800 --> 0:14:52.320 you know, someday, and I don't see that happening soon, 0:14:52.400 --> 0:14:55.040 but I hope that happens. Um. You know. But it's 0:14:55.040 --> 0:14:58.840 not just China that we we exclude. We also exclude Russia, Egypt, 0:14:59.040 --> 0:15:02.840 Saudi Arabia just about to be added to MSCIS index. Um. 0:15:02.920 --> 0:15:05.520 We don't have any any allocation too. And and it's 0:15:05.640 --> 0:15:08.320 a similar situation to China where I don't expect that 0:15:08.440 --> 0:15:11.600 to change anytime soon. Um. And and again we are 0:15:11.640 --> 0:15:14.120 not deciding, you know, what countries go in there. I 0:15:14.120 --> 0:15:17.120 couldn't game the system if I tried. We're using quantitative 0:15:17.480 --> 0:15:20.840 freedom metrics from a third party UM for complete objectivity 0:15:20.880 --> 0:15:23.520 so UM. So yeah, so we we don't have any 0:15:23.600 --> 0:15:26.680 China and that is most notable because the other indexes 0:15:26.720 --> 0:15:29.000 have so much China UM, and I think that does 0:15:29.040 --> 0:15:31.600 give us a lot of differentiation and and just gives 0:15:31.600 --> 0:15:34.920 investors a different, different exposure UM that would lower their 0:15:35.040 --> 0:15:38.200 risk you know, overall, if they were to incorporate both 0:15:38.480 --> 0:15:44.320 the you know, commonly used benchmarks and UM something like this. 0:15:44.440 --> 0:15:46.800 So yeah, it's not just just China that we're picking 0:15:46.840 --> 0:15:51.119 on UM and and we're using basically third party objective 0:15:51.640 --> 0:15:55.640 quantitative metrics. So I have a big question for you. Yeah, 0:15:55.680 --> 0:15:58.680 what have you learned about the world that you didn't 0:15:58.760 --> 0:16:03.920 know before you you start this process? UM. So Actually, 0:16:04.400 --> 0:16:06.200 I am very thankful to be in the e T 0:16:06.360 --> 0:16:10.040 F equal space because it's been a lot more supportive 0:16:10.040 --> 0:16:13.280 than you would imagine some you know, Wall Street industry 0:16:13.320 --> 0:16:16.240 to be so UM and I think you find that 0:16:16.280 --> 0:16:18.680 people agree with that across the board. That is more inclusive, 0:16:18.760 --> 0:16:21.840 it's you know, more diverse UM and just open to 0:16:21.880 --> 0:16:23.760 new ideas because you know, for a long time e 0:16:23.800 --> 0:16:26.800 t s have been the underdog. So you know, we 0:16:26.840 --> 0:16:30.040 tend to you know, stick together, and even your competitors 0:16:30.080 --> 0:16:34.000 become your friends. So that is UM something that I 0:16:34.080 --> 0:16:37.320 really enjoy about the E t F world, you know, 0:16:37.560 --> 0:16:40.760 UM as a good example, since we're on this show 0:16:40.760 --> 0:16:43.920 with Eric, when I first started doing this, and I'm 0:16:43.960 --> 0:16:45.280 not just saying this because were on this show with 0:16:45.400 --> 0:16:52.760 Eric by the way, UM, if it's complimentary towards me, 0:16:52.920 --> 0:16:55.680 Joel's about to cringe. You know, I've looked up to 0:16:55.760 --> 0:16:58.120 him for a long time since we since basically the 0:16:58.520 --> 0:17:01.840 he did the you know, movie ratings article. I believe 0:17:01.880 --> 0:17:04.720 it was like a couple of three years ago, maybe UM, 0:17:04.960 --> 0:17:08.080 right when I first started this. UM, him and just 0:17:08.119 --> 0:17:10.440 the industry giants you know that that we work with now, 0:17:10.520 --> 0:17:14.199 like Reggie Brown, who when I when I've worked with 0:17:14.240 --> 0:17:17.160 Fidelity before this for you know, many years as an 0:17:17.160 --> 0:17:21.800 investment advisor and UM. I left Idelity in two thousand 0:17:21.920 --> 0:17:25.760 fourteen UM to spend time to basically become a stay 0:17:25.760 --> 0:17:29.000 at home mom to a young child. And the month 0:17:29.040 --> 0:17:32.800 that I left Delity was April of two four UM 0:17:32.840 --> 0:17:36.879 and the cover story on Bloomberg Markets that month was 0:17:37.400 --> 0:17:40.440 Mr E t F. And it just had this gigantic 0:17:41.440 --> 0:17:48.680 headshot of Reggie Brown on the cover. Blom wow. Yeah. 0:17:48.720 --> 0:17:52.040 So so that was the month I left, and I 0:17:52.119 --> 0:17:55.199 just remember that article. UM and then when I started 0:17:55.200 --> 0:17:59.720 doing this UM officially and went to inside ETFs for 0:17:59.720 --> 0:18:02.600 the first time, I you know, made it a point 0:18:02.600 --> 0:18:05.000 to meet Reggie just because to me at the time, 0:18:05.040 --> 0:18:08.520 because of that magazine article, because of that cover, he 0:18:08.640 --> 0:18:10.880 was Mr e t F. So now he is the 0:18:11.040 --> 0:18:14.879 lead market maker on our fund. So I mean, stuff 0:18:14.960 --> 0:18:17.800 like this that happened, you know, over this time. I 0:18:17.840 --> 0:18:21.479 just I couldn't have I couldn't have imagined and uh 0:18:21.720 --> 0:18:24.080 a lot of this I couldn't have orchestrated if I tried. 0:18:24.119 --> 0:18:26.520 I just think that people this idea is something that 0:18:27.240 --> 0:18:29.280 I feel like it's bigger than me, and I just 0:18:29.359 --> 0:18:31.800 I get to do it, but really it's it's bigger 0:18:31.800 --> 0:18:34.240 than me. And the way that I met a lot 0:18:34.240 --> 0:18:36.399 of my investors, like Rob or not, you know, was 0:18:36.440 --> 0:18:39.320 the same way when you talk to investors, what are 0:18:39.359 --> 0:18:42.480 you hearing so far? And how do you get them 0:18:42.520 --> 0:18:47.320 to actually put assets into your fund? Yeah. So something 0:18:47.359 --> 0:18:50.320 that I learned as a financial advisor, it's it's easier 0:18:50.359 --> 0:18:53.600 to sell stuff to people that they already want. So 0:18:53.800 --> 0:18:56.800 instead of convincing people that freedom is important in the 0:18:56.880 --> 0:18:59.439 very beginning when I have when I have to do 0:18:59.480 --> 0:19:01.919 things that are ailable, I'm talking to people who already 0:19:01.920 --> 0:19:06.080 believe in freedom. So my very first investor, committed investor 0:19:06.080 --> 0:19:08.879 in the fund was Rob or Not, and Rob is 0:19:08.920 --> 0:19:10.840 someone that I you know, looked up to as well 0:19:10.880 --> 0:19:14.240 for a long time. Um. In fact, back in the day, 0:19:14.280 --> 0:19:17.399 like way before this was an official thing, I was 0:19:17.440 --> 0:19:22.840 interested in indexing and non cap weighted indexing. He his firm, 0:19:22.880 --> 0:19:26.400 Research Affiliates, was in Pasadena on Lake south Lake Avenue, 0:19:26.480 --> 0:19:28.840 and I worked at the Fidelity on South Lake Avenue, 0:19:28.920 --> 0:19:31.160 so he was a few doors down and I would 0:19:31.160 --> 0:19:34.080 sometimes like walk over there and just stalk the Research 0:19:34.119 --> 0:19:36.240 Affiliates building because I thought they were so cool. So 0:19:37.400 --> 0:19:41.080 so so after I left Fidelity and eventually started this, 0:19:41.160 --> 0:19:43.760 when my kid, you know, started started going to school 0:19:43.800 --> 0:19:46.440 full time, I called Research Affiliates and I said, Hey, 0:19:46.440 --> 0:19:48.199 do you guys want to partner on this? And they 0:19:48.200 --> 0:19:51.400 were just like, please go away. Uh So they didn't, 0:19:51.440 --> 0:19:53.520 you know, want to talk at all. I couldn't. There 0:19:53.560 --> 0:19:56.080 was no chance of getting through to Rob Um. And 0:19:56.119 --> 0:19:58.720 then I went to that inside ETS the first year, 0:19:58.760 --> 0:20:02.560 as I mentioned, where I met Reggie Brown, but also um, 0:20:02.600 --> 0:20:05.320 I met this They had an app that year at 0:20:05.359 --> 0:20:08.160 the conference. It was like an in intra conference Twitter 0:20:08.200 --> 0:20:11.320 app and people could just tweet each other just within 0:20:11.320 --> 0:20:14.840 the conference. And then somebody from a China talk tweeted, 0:20:15.359 --> 0:20:17.399 I can't believe this guy is talking about China, but 0:20:17.480 --> 0:20:19.600 he's not mentioning the one child policy and all its 0:20:19.640 --> 0:20:22.439 implications on the economy and society. And I was like, 0:20:22.880 --> 0:20:26.320 oh my gosh, like somebody else knows and cares about 0:20:26.320 --> 0:20:28.399 the one child policy. And I look him up and 0:20:28.440 --> 0:20:31.600 he's a portfolio manager in Tennessee, and so, um, we 0:20:31.720 --> 0:20:34.840 end up meeting and his name is Ralph Lehman. And 0:20:34.880 --> 0:20:36.840 I believe Eric you know him as well. He's coming 0:20:36.840 --> 0:20:40.479 out with a book soon about ETS. So he invited 0:20:40.520 --> 0:20:42.359 me to go speak. He was he's the president of 0:20:42.400 --> 0:20:44.760 a cf A society in Tennessee. It's a tiny society, 0:20:44.960 --> 0:20:47.320 it's like twenty people. Um, he invited me to go 0:20:47.359 --> 0:20:49.600 speak there. I was like, sure, i'll go. I'll go 0:20:49.680 --> 0:20:52.040 speak in in Tennessee. So he had me to speak 0:20:52.080 --> 0:20:55.080 at the Chattanooga Society and the Knoxville Society and they 0:20:55.080 --> 0:20:59.080 were both about twenty people each event. It was super 0:20:59.119 --> 0:21:02.199 fun um And then after that they referred me to 0:21:02.400 --> 0:21:06.920 the Tampa Society for their annual Forecast Dinner. So, as 0:21:06.920 --> 0:21:08.639 you know, the Forecast Dinner is kind of a bigger 0:21:08.680 --> 0:21:11.560 event with c if A societies, and this society at 0:21:11.600 --> 0:21:14.199 this event had about three hundred people. And this was 0:21:14.240 --> 0:21:17.199 my first year doing this and barely started, had no 0:21:17.240 --> 0:21:18.639 idea what I was doing. And I was on this 0:21:18.720 --> 0:21:23.120 panel with black Rock Morning Star and this guy named 0:21:23.200 --> 0:21:25.919 David ko Talk and it went well. And after the panel, 0:21:26.000 --> 0:21:29.240 David ko Talk invited me to a fishing camp called 0:21:29.400 --> 0:21:31.960 Camp Coo Talk And at first I was like, who 0:21:32.000 --> 0:21:35.359 does this. It's literally like fifty economists and finance people 0:21:36.040 --> 0:21:38.960 that go fishing in the woods for three or four 0:21:39.040 --> 0:21:42.960 days with at the time no WiFi. So you know, 0:21:42.960 --> 0:21:44.119 my friends were like, you should go, you know, you 0:21:44.119 --> 0:21:49.240 can meet all these cool people. So so the beginning 0:21:49.240 --> 0:21:54.920 of it does like stuck stuck in the woods with 0:21:54.920 --> 0:21:58.320 with a bunch of scientists and we're going to go fishing. 0:21:58.680 --> 0:22:01.080 They actually call it the Shadow Know Fed because there's 0:22:01.119 --> 0:22:03.320 people people there that are on the shortlist for the FED. 0:22:03.720 --> 0:22:08.159 So I've not I know people who go it's seems 0:22:08.200 --> 0:22:12.760 like it's a wholesome time. It's actually it was super fun. 0:22:12.840 --> 0:22:16.000 But but you have to take a seaplane to get 0:22:16.040 --> 0:22:20.080 from the Bangor airport into this very remote campsite, which 0:22:20.080 --> 0:22:22.320