WEBVTT - Let the Good Times Roll 0:00:06.120 --> 0:00:06.880 Walkrom Chillions. 0:00:06.880 --> 0:00:09.440 I'm Joe Webber and I'm Eric Balchuna's. 0:00:12.280 --> 0:00:14.440 Eric. We've had a couple of guests on lately, but 0:00:14.480 --> 0:00:16.800 we have not been talking about what's happening in the markets, 0:00:17.360 --> 0:00:19.000 which seems like we should do. 0:00:19.640 --> 0:00:22.240 Yeah, I mean, in a way, it's because nothing traumatic 0:00:22.280 --> 0:00:25.360 has happened, but there's always something going on, and that's 0:00:25.360 --> 0:00:29.319 something is all time highs. Like it's almost like so 0:00:29.720 --> 0:00:32.320 peaceful and nice and all time high out there, you 0:00:32.400 --> 0:00:36.080 forget about it. But that's a story in itself because 0:00:36.800 --> 0:00:39.720 just seems like also we're in a different place than normal. 0:00:40.159 --> 0:00:42.040 Always felt like last time we were in this bull 0:00:42.080 --> 0:00:44.080 market and all time highs, there was this sort of 0:00:44.159 --> 0:00:46.440 quot wall of worry and it was all about how 0:00:46.560 --> 0:00:49.440 the market kind of would deal with that. Doesn't seem 0:00:49.440 --> 0:00:51.440 like there's a lot of things to worry about. So 0:00:51.440 --> 0:00:52.520 there's like, oh, come on. 0:00:52.479 --> 0:00:57.760 There's the threat of nuclear war. There's you know, inflation 0:00:57.920 --> 0:00:59.520 is popped back up a little bit. I mean there's 0:00:59.560 --> 0:01:00.880 like it's not like there isn't things. 0:01:00.760 --> 0:01:02.800 To worry about, yeah, but all those things I think 0:01:02.840 --> 0:01:06.360 have been compartmentalized, which brings up one of our big 0:01:06.400 --> 0:01:09.039 themes this year. Which we have athnocs on to talk about, 0:01:09.040 --> 0:01:14.280 which is investors being ready for it comfortably bullish. Other 0:01:14.400 --> 0:01:16.880 sell side shops quote Taylor Swift, we quote Pink Floyd. 0:01:17.360 --> 0:01:20.120 You know it's all good. But anyway, this idea of 0:01:21.400 --> 0:01:24.840 not just you're not euphoric bullish and you're not. It's 0:01:24.880 --> 0:01:28.720 not a hated bull market. It's a comfortable bullishness. You 0:01:28.760 --> 0:01:31.600 know I'm trying to say. But it feels right, and 0:01:31.760 --> 0:01:34.280 the numbness is part of it in that I don't 0:01:34.280 --> 0:01:37.280 think these things you just mentioned. They're out there, but 0:01:37.360 --> 0:01:41.080 they're not as up close and present I think for 0:01:41.240 --> 0:01:43.880 the investor psyche right now, I think they've written them 0:01:43.880 --> 0:01:46.680 all off. Obviously, the Fed raising rates would be a 0:01:46.680 --> 0:01:48.400 big deal, but that doesn't seem like it's going to happen. 0:01:49.080 --> 0:01:50.920 And I don't even think the market expects Feds the 0:01:51.640 --> 0:01:53.720 rates lower. I think they're okay even if it doesn't 0:01:53.720 --> 0:01:56.600 get lower. So it just seems like there's a comfort 0:01:56.760 --> 0:02:00.360 level here. That might be the story that the story 0:02:00.440 --> 0:02:03.559 or the feeling this year is and whether that obviously 0:02:03.600 --> 0:02:06.800 will get disrupted at some point, but it just feels 0:02:06.800 --> 0:02:07.800 pretty smooth right now. 0:02:08.360 --> 0:02:14.080 You guys at Bloomberg Intelligence also did an ETF survey. 0:02:13.120 --> 0:02:16.280 We did speaking of bullishness. We have a survey that 0:02:16.800 --> 0:02:19.000 first ever time we did it. We've had BBH on 0:02:19.000 --> 0:02:21.800 who did their own survey. We did one. Charles Bond 0:02:22.360 --> 0:02:25.280 from our data group let it completely. He deserves all 0:02:25.320 --> 0:02:28.880 the credit. Great job, and we basically got results from 0:02:29.280 --> 0:02:31.600 over fifty people different areas, and we'll go over some 0:02:31.639 --> 0:02:35.160 of those results. Some are what you'd expect, some surprises, 0:02:35.720 --> 0:02:37.600 but a lot of bullishness towards ETF's roll. 0:02:37.960 --> 0:02:41.400 And joining us on this episode Athamasio Sarah Feagas of 0:02:41.440 --> 0:02:44.920 Bloomberg Intelligence. He's an analyst with Eric to help walk 0:02:45.000 --> 0:02:48.240 us through this moment and diservice. 0:02:50.840 --> 0:02:51.160 This time. 0:02:51.200 --> 0:02:56.400 I tryins let the good times roll, Athanasios. 0:02:55.600 --> 0:02:57.280 Welcome back, glad to be back. 0:02:57.320 --> 0:02:58.119 The good times are rolling. 0:02:58.160 --> 0:02:58.720 What's going on? 0:02:58.919 --> 0:03:02.040 Yeah, it's they are? You know the good thing about 0:03:02.200 --> 0:03:04.359 you You guys are talking about bushes of ETFs. I 0:03:04.400 --> 0:03:06.280 we've gotten so large, right, and there's so many different 0:03:06.280 --> 0:03:09.240 strategies that we can actually like you know, use them 0:03:09.240 --> 0:03:12.080 as indicators, right, sort of form market strength and market sentiment. 0:03:12.800 --> 0:03:14.679 And you know, the market hit all time highs and 0:03:15.040 --> 0:03:17.440 twenty twenty one where at all time highs again, but 0:03:17.480 --> 0:03:20.280 I think the dynamics are very different. And Eric had 0:03:20.280 --> 0:03:24.200 mentioned that earlier about like being euphoric, like we're feeling good, 0:03:24.200 --> 0:03:26.800 but we're not overly euphoric, which I think is actually 0:03:26.840 --> 0:03:28.080 a good thing, right, And this is where we came 0:03:28.120 --> 0:03:30.560 up with the term like comfortably bullish. If you remember 0:03:30.600 --> 0:03:32.440 in twenty one, it was all like the meme stocks. 0:03:32.480 --> 0:03:34.880 It was Portnoy's saying stocks only go up, like it 0:03:34.920 --> 0:03:37.720 was craziness. Right, You're not having any of that this year, 0:03:38.400 --> 0:03:40.119 even the world all time highs. I feel like we're 0:03:40.160 --> 0:03:43.880 just in a good spot now. It was just Nvidia, Nvidia, Vidia, 0:03:43.920 --> 0:03:47.280 and I feel like every time something happens, some company 0:03:47.280 --> 0:03:50.240 bails out the cues. It's like Nvidia or Microsoft, like 0:03:50.720 --> 0:03:53.200 someone is always sort of carrying the market on. 0:03:53.560 --> 0:03:55.880 Does it remind you of like a basketball team where 0:03:55.920 --> 0:03:59.520 like take the Sixers. I live in Philly. Sometimes in 0:03:59.640 --> 0:04:01.760 be just isn't feeling it or is injured, and MAXI 0:04:01.840 --> 0:04:04.280 steps up. The Magnificent seven to me is like a 0:04:04.320 --> 0:04:08.240 team and like Tesla, Navidia kind of balanced out Tesla 0:04:08.600 --> 0:04:11.760 and they are real players, but they are really kind 0:04:11.760 --> 0:04:15.440 of lifting this market up, although there's some people who 0:04:15.440 --> 0:04:18.640 point out its actually more depth than those seven. But certainly, 0:04:18.640 --> 0:04:20.599 I know when Navidia's earnings came out, it did people 0:04:20.640 --> 0:04:22.760 were saying, like the whole world they had memes of 0:04:22.760 --> 0:04:25.719 like Navidia holding up the globe. The video seems to 0:04:25.760 --> 0:04:28.160 be like the new Apple in a way in terms 0:04:28.200 --> 0:04:30.080 of holding the market up, but it delivered. 0:04:30.880 --> 0:04:34.080 Yeah, I agree, every like every time if every time 0:04:34.080 --> 0:04:35.800 I log in every morning with the cueser at a 0:04:35.880 --> 0:04:39.000 new time like all time high. But I think it 0:04:39.080 --> 0:04:41.080 kind of makes sense when you look around the world 0:04:41.200 --> 0:04:42.880 or look at other investments. I think it's all about 0:04:42.920 --> 0:04:46.400 like relative right, So like if the FED is gonna 0:04:46.400 --> 0:04:48.960 cut for this year, like for money market funds, we 0:04:48.960 --> 0:04:51.280 already know that the best of that is probably behind us. 0:04:51.360 --> 0:04:53.159 So imagine like you already know that that's only going 0:04:53.240 --> 0:04:54.840 to go down. It's like, okay, where am I going 0:04:54.880 --> 0:04:57.160 to look? China's a little rough right now, you know, 0:04:57.240 --> 0:05:00.440 Like performance wise, Europe is a story so that you know, 0:05:00.560 --> 0:05:02.520 seems like it wants to work every year, but it doesn't. 0:05:02.560 --> 0:05:05.120 It just feels like all the roads come back to 0:05:05.360 --> 0:05:08.000 us stocks. It's just still sort of the best option 0:05:08.200 --> 0:05:08.880 out there. 0:05:09.560 --> 0:05:11.240 And if you could, let's talk a little bit about 0:05:11.240 --> 0:05:13.640 the BI ETF greed Fear Indicator, which you created with 0:05:13.680 --> 0:05:18.120 Charles Bond. It's obviously up, but what goes into that? 0:05:18.200 --> 0:05:20.200 What ETF data are you able to use for that? 0:05:20.680 --> 0:05:22.840 Yeah? Yeah, big prop To Trials, we sort of were 0:05:23.040 --> 0:05:24.839 hashing out ideas, so we look at a couple of things. 0:05:24.839 --> 0:05:28.240 One is leverage long to short ETF like leverage tradings. 0:05:28.440 --> 0:05:31.599 We look at moving average stuff, so we got some 0:05:31.640 --> 0:05:34.680 technical indicators. We look at short interest how much people 0:05:34.720 --> 0:05:37.320 are shorting ETFs, and we sort of put that together 0:05:37.600 --> 0:05:40.200 and we look at it historically to itself, and we 0:05:40.240 --> 0:05:43.400 look back in twenty one it got overly bullish, right, 0:05:43.400 --> 0:05:45.479 and then the market corrected a little bit, and then 0:05:46.400 --> 0:05:48.719 this year we're very bullish, but we're not at this 0:05:48.800 --> 0:05:51.000 like U four range, So I actually even think it 0:05:51.000 --> 0:05:52.520 could probably go up a little bit more, Like I 0:05:52.560 --> 0:05:56.200 think we have room to get even more bullish. But 0:05:57.000 --> 0:05:58.599 and when I was talking with Trials, that's how we 0:05:58.640 --> 0:06:01.160 came up with the the word comfortably bullish, Like I 0:06:01.200 --> 0:06:03.159 like pink Floyd and whatnot. But we're like, how do 0:06:03.200 --> 0:06:04.600 you feel, right? I'm like, that's how I feel like. 0:06:04.640 --> 0:06:06.760 I feel good, not too good, but like in a 0:06:06.760 --> 0:06:10.360 good spot. Market keeps going on, people are I remember 0:06:10.440 --> 0:06:13.040 last year when the market was going up, flows weren't biting. 0:06:13.120 --> 0:06:15.720 People were still very pessimistic about the market going up. 0:06:15.839 --> 0:06:17.760 I feel like this year, finally it's all aligned. The 0:06:17.800 --> 0:06:20.640 market's going up, the flows are aligning. You know, sentiment 0:06:20.680 --> 0:06:21.240 feels good. 0:06:21.560 --> 0:06:24.840 Can you quantify comfortably bullish? 0:06:25.960 --> 0:06:29.760 Uh? Well, we attempted to, right, But I think the 0:06:29.800 --> 0:06:32.039 way we always we look at it is just relative 0:06:32.120 --> 0:06:35.880 to itself. So even now we're at all time highs, 0:06:36.000 --> 0:06:38.080 flows weren't as good as they were in twenty one, 0:06:38.240 --> 0:06:40.000 even though we're at a higher level than we were. 0:06:40.200 --> 0:06:41.520 And I feel like when you look at it at 0:06:41.520 --> 0:06:45.440 that flows or leverage, trading spreads, or even what kind 0:06:45.480 --> 0:06:51.080 of ets people are allocating to, you know, we are bullish, 0:06:51.320 --> 0:06:54.839 but not how we were in twenty one. So that's 0:06:54.880 --> 0:06:56.880 kind of the way we try to quantify it. I 0:06:56.880 --> 0:06:59.360 can give you an arbitrary number, say, oh, it's a four, right, 0:06:59.600 --> 0:07:01.640 but I think when you compare it to itself, that's 0:07:01.680 --> 0:07:04.080 how we sort of approach this sentiment indicator. 0:07:04.279 --> 0:07:06.360 And you know, it's interesting. I look at the weekly 0:07:06.360 --> 0:07:11.280 flow chart every week on ETFIQ and ivvvu qs VTI 0:07:11.400 --> 0:07:14.760 all at the top right comfortably bullish everybody, But there's 0:07:14.840 --> 0:07:17.760 every like fourth week, someone tries to get small caps going, 0:07:18.200 --> 0:07:20.960 like you see IWM there or like bb EU Europe. 0:07:21.600 --> 0:07:26.240 Someone tries to be like early on the shift or 0:07:26.280 --> 0:07:29.080 the regime change, and they just get rolled over. And 0:07:29.080 --> 0:07:31.480 I've seen it happen over and over, and I think 0:07:31.560 --> 0:07:34.040 everybody out there knows that at some point the regime 0:07:34.040 --> 0:07:37.360 will change. But how many times can you get run 0:07:37.400 --> 0:07:41.200 over before you just stop trying? And I think I've 0:07:41.240 --> 0:07:43.760 seen in the flows there's less and less of that 0:07:44.240 --> 0:07:47.960 those attempts. And maybe when there are no tempts at all, ever, 0:07:48.200 --> 0:07:50.720 you know, we're just like weeks and weeks where nobody's trying. 0:07:51.240 --> 0:07:53.000 Maybe that's when it turns, and that's when it's like 0:07:53.000 --> 0:07:55.400 a bubble where even a little pin can pop it. 0:07:55.720 --> 0:07:58.640 But small caps. You know, we had a not Doubt 0:07:58.720 --> 0:08:01.000 that talked about this, and in this case we reference 0:08:01.080 --> 0:08:05.040 mean girls droll the market to ETF investors stopped trying 0:08:05.080 --> 0:08:07.840 to make small caps happen, you know, because they tried 0:08:07.920 --> 0:08:10.360 over and over and over. And I talk with Gena 0:08:10.360 --> 0:08:12.720 Martin Adams are macro stentagist my boss about this, and 0:08:13.000 --> 0:08:15.480 she brought up a good point. A if a company 0:08:15.960 --> 0:08:18.760 gets really good and they're small, they get like drafted up, 0:08:19.080 --> 0:08:20.280 like all of a sudden, they're a mid or a 0:08:20.360 --> 0:08:22.800 large and they're gone. So you lose them like a 0:08:22.840 --> 0:08:25.880 college to the NBA, and then more companies when the 0:08:25.920 --> 0:08:28.440 IPO now are going right to the large, they're already big, 0:08:29.000 --> 0:08:31.680 so that the pool of hotness in the small cap 0:08:31.720 --> 0:08:34.280 area is also down. And so I think this idea 0:08:34.320 --> 0:08:37.920 that it has to change. There are reasons where it 0:08:37.920 --> 0:08:40.160 could be a little more secular than cyclical. 0:08:41.559 --> 0:08:45.560 I'm just thinking about how different now is compared to 0:08:45.880 --> 0:08:47.880 twenty twenty one, when the last time that there was 0:08:47.920 --> 0:08:51.840 this fever. I guess, and boy, there's a world of 0:08:51.880 --> 0:08:55.880 difference between those two markets. How is that reflected and 0:08:55.880 --> 0:08:58.120 how is it showing up not only in the flows, 0:08:58.160 --> 0:09:00.840 but you know what sectors theos are going into. 0:09:01.360 --> 0:09:03.800 Yeah, so I'd say the first thing that's stuck out 0:09:03.920 --> 0:09:06.360 we observed and I know this is it sounds a 0:09:06.400 --> 0:09:10.040 little obvious, but more allocations towards the US. I feel 0:09:10.040 --> 0:09:12.840 like in the twenty twenty one money was getting allocated 0:09:12.840 --> 0:09:15.280 all over the world, like Europe was taking some flows China. 0:09:15.440 --> 0:09:17.559 This year it's just all US, and it's US from 0:09:17.600 --> 0:09:21.000 other regions. There was even this issue in China. And 0:09:21.040 --> 0:09:23.360 the thing is the Chinese investors were trying to buy 0:09:23.400 --> 0:09:25.840 the queue so fast that they had to close the 0:09:25.840 --> 0:09:27.960 fund in China, right, So they weren't buying Chinese stocks 0:09:28.040 --> 0:09:30.360 or buying US stocks. So if you actually look globally, 0:09:30.679 --> 0:09:33.640 I think a big difference is everything's going even more 0:09:33.720 --> 0:09:37.600 so into the US. The other thing is we have 0:09:37.679 --> 0:09:41.600 higher rates, right, So now I think what the important 0:09:41.640 --> 0:09:43.000 thing was for this year is that we showed that 0:09:43.040 --> 0:09:45.760 we could live in this like five percent rate world, right. 0:09:45.640 --> 0:09:48.280 Which I would have assumed looked like a gold shower almost, 0:09:48.360 --> 0:09:49.000 But here we. 0:09:48.960 --> 0:09:50.880 Are, yeah, for sure. And I don't know if people 0:09:50.960 --> 0:09:53.000 maybe expected it or I think they've kind of expected 0:09:53.000 --> 0:09:54.319 the market to go down, and you know, it was 0:09:54.320 --> 0:09:57.040 pretty violle on twenty twenty two, but now it's like, 0:09:57.080 --> 0:09:59.680 you know what we've we went through that we're fine, 0:09:59.720 --> 0:10:02.400 we can handle it, right, and now we sort of 0:10:02.440 --> 0:10:04.319 know that the Fed's already made it clear that at 0:10:04.320 --> 0:10:07.600 some point they're gonna cut right, so you know, so 0:10:07.679 --> 0:10:11.079 I think we have a lot of those uncertainties behind us. 0:10:11.120 --> 0:10:12.880 I know there's an election coming up this year and 0:10:12.880 --> 0:10:16.199 whatnot that at all No could maybe you know, derail 0:10:16.240 --> 0:10:17.760 this a little bit. But I think it's just we've 0:10:17.840 --> 0:10:20.080 learned to live in this higher rate environment. 0:10:21.240 --> 0:10:25.319 Yeah, it was interesting those big growthy sort of Magnificent 0:10:25.360 --> 0:10:27.839 seven companies. One thing that impressed me was they went 0:10:27.920 --> 0:10:31.440 up last year and rates were up, like there were 0:10:31.440 --> 0:10:34.160 supposed to be companies that didn't work in higher rate environments. 0:10:34.200 --> 0:10:36.640 But then you look at some of these companies, unlike 0:10:36.679 --> 0:10:39.080 maybe some of the arcstocks, these companies have a lot 0:10:39.120 --> 0:10:41.680 of cash on hand, like they can absorb a lot. 0:10:41.760 --> 0:10:44.800 They're not like high growth, no profit kind of companies. 0:10:45.040 --> 0:10:47.400 The other thing about the Magnificent Seven that Sam Rowe 0:10:47.440 --> 0:10:52.000 pointed out on Twitter. He was talking about how if 0:10:52.000 --> 0:10:53.760 you take one of them, there's actually three or four 0:10:54.080 --> 0:10:57.000 even five companies in there that could be like smaller 0:10:57.040 --> 0:10:59.720 mid caps or even large caps like YouTube to me, 0:11:00.200 --> 0:11:02.680 could be its own company, a large cap probably. I 0:11:02.679 --> 0:11:05.560 mean it's taken over TV and it's just one part 0:11:05.559 --> 0:11:08.080 of Google. Right. So you go down the list and 0:11:08.120 --> 0:11:11.160 you see these companies are made up of many, many companies, 0:11:11.200 --> 0:11:14.840 So maybe it's the magnificent fifty honestly, and not just 0:11:14.880 --> 0:11:16.680 the seven. What do you think of that? Droll? 0:11:17.920 --> 0:11:20.040 Lena conn would have it that way for sure if 0:11:20.080 --> 0:11:24.840 she got to do some due overs. And look, I 0:11:24.840 --> 0:11:27.120 mean it does speak to why the cues are the cues, 0:11:27.200 --> 0:11:30.120 Like I think if you knock those companies out, like 0:11:30.200 --> 0:11:32.760 they're just more que candidates. 0:11:32.280 --> 0:11:34.240 Really right, And then when you look at the rest 0:11:34.240 --> 0:11:36.040 of the world, and this sounds so US centric, but 0:11:36.880 --> 0:11:39.880 you know, where are these companies in other countries? I 0:11:39.920 --> 0:11:42.760 know sometimes people like, well there might be one or two, 0:11:42.840 --> 0:11:44.960 but we have like a dozen. You know, we have 0:11:45.280 --> 0:11:48.640 many of these and it's hard to capture that. And 0:11:49.480 --> 0:11:52.520 it's tough the people coming over from China and Europe, drole. 0:11:53.000 --> 0:11:55.160 What I worry about in China particular is their market 0:11:55.200 --> 0:11:57.120 just went down two years in a row, and they're 0:11:57.200 --> 0:11:59.480 like at the bottom, that's when you should actually buy in, 0:12:00.000 --> 0:12:02.640 but they're leaving to come here to buy at the top. Yeah, 0:12:02.760 --> 0:12:04.880 that's this is like has pain written all over in 0:12:04.880 --> 0:12:07.520 my opinion, But I just feel like this could end 0:12:07.520 --> 0:12:10.160 in tears stroll. You know that that movement usually doesn't 0:12:10.160 --> 0:12:12.640 work out well and It's a shame too, because those 0:12:12.640 --> 0:12:15.600 investors are you know, they're just the fomo is that bad? 0:12:16.760 --> 0:12:19.920 You know, it's like they've lost their minds. 0:12:21.320 --> 0:12:24.720 Well they're uncomfortably well no, well. 0:12:24.679 --> 0:12:27.440 Yeah, they want to be comfort They're coming over here 0:12:27.480 --> 0:12:28.360 to have that good feeling. 0:12:29.280 --> 0:12:31.400 Yeah, I agree. I think fifty four percent of the 0:12:31.400 --> 0:12:34.040 cues last year was not expected. I think that messed 0:12:34.040 --> 0:12:37.840 with people's minds, right, Like every strategist was not bullish 0:12:37.920 --> 0:12:40.080 last year, right, everyone missed. Now all of a sudden, 0:12:40.080 --> 0:12:43.120 everyone's bringing up their targets, like fomo is a real thing, right, 0:12:44.080 --> 0:12:46.200 and it was working when a time was not supposed 0:12:46.240 --> 0:12:48.600 to work, and now it is supposed to work, and 0:12:48.800 --> 0:12:52.440 you know, and I think that is keeping people coming 0:12:52.480 --> 0:12:53.720 back into the equity market. 0:12:54.120 --> 0:12:56.280 And I think if if someone's out there listening, it's like, 0:12:56.280 --> 0:12:58.800 what do you do? Go into more US equities? You know, 0:12:58.880 --> 0:13:02.720 most advisors were probably advise you to rebalance actually, which 0:13:02.760 --> 0:13:05.920 is to you know, rebalance into what has not done well. 0:13:06.920 --> 0:13:08.160 And we see some of that. It's not like the 0:13:08.160 --> 0:13:11.800 places we're saying have no flows, but generally speaking, people 0:13:11.840 --> 0:13:15.240 are leaning into US equities and this is opposite. Last 0:13:15.320 --> 0:13:17.480 year Athan was on this time last year, and what 0:13:17.559 --> 0:13:19.120 we were talking about was the US market was up, 0:13:19.160 --> 0:13:21.240 but nobody's buying in there were no flows. We called 0:13:21.240 --> 0:13:24.959 the fomo drought. So comfort bullish is the new fomo drought. 0:13:25.640 --> 0:13:28.800 M what will be next year? God, please help us 0:13:28.840 --> 0:13:33.280 because everything's gone to Yeah, that's a little long. I've 0:13:33.360 --> 0:13:35.960 the toile tightened that up on. That is just. 0:13:37.480 --> 0:13:39.000 To go through some albums and come up with a 0:13:39.040 --> 0:13:40.600 good title for next year. 0:13:48.200 --> 0:13:54.160 Okay, so you guys had this Bloomberg Intelligence survey of 0:13:54.559 --> 0:13:56.920 whom and what was the what were you trying to 0:13:56.960 --> 0:13:57.440 figure out? 0:13:58.120 --> 0:14:01.439 Yeah, look, well we got a little fomo because other 0:14:01.440 --> 0:14:04.240 people were doing these surveys and Charles Bond on our team, 0:14:04.280 --> 0:14:07.520 who works in data in Europe, said we should do 0:14:07.520 --> 0:14:08.959 our own and I said, yeah, I've always want to 0:14:09.000 --> 0:14:10.920 do it, but I've never had the resources. Now we do, 0:14:11.040 --> 0:14:13.559 we have, you know, the teams bigger. So he basically 0:14:13.640 --> 0:14:15.560 went through all the hurdles and there are a lot 0:14:15.840 --> 0:14:18.000 to get a survey downe a bi Normally, Joel, when 0:14:18.040 --> 0:14:19.560 I surveyed people, I just go to Twitter to a 0:14:19.600 --> 0:14:21.840 poll and I know in like eight minutes what the 0:14:21.840 --> 0:14:24.240 people think. But that's not as official and I can't 0:14:24.240 --> 0:14:26.720 really put that into a nice formal note. So we 0:14:26.960 --> 0:14:30.560 polled about I think it was over fifty people, financial advisors, 0:14:30.680 --> 0:14:33.880 individuals and institutions, and they were all over the world, 0:14:34.240 --> 0:14:37.600 and we basically largely in North American and Europe. But 0:14:37.680 --> 0:14:39.360 we basically asked some a bunch of questions and then 0:14:39.360 --> 0:14:40.440 we put those in the notes, and there were a 0:14:40.440 --> 0:14:42.760 couple big takeaways. Do you want to go over the 0:14:42.760 --> 0:14:44.560 takeaways or do you want to hone in on a 0:14:44.560 --> 0:14:48.720 couple notes, Let's do the takeaway, okay? Effect me the 0:14:48.720 --> 0:14:54.120 big takeaways Active is back. I've seen these surveys for 0:14:54.240 --> 0:14:57.480 years and years, and one thing that was clear was 0:14:57.520 --> 0:15:00.400 that there's much more openness to Active. And I think 0:15:00.440 --> 0:15:02.720 this is because active's gotten cheaper. And I think it's 0:15:02.720 --> 0:15:06.480 because twenty twenty one was rough and people sixteen the 0:15:06.560 --> 0:15:08.640 forty went down and people were like a little more 0:15:08.640 --> 0:15:10.600 open to Active. So I think it's good for Active. 0:15:10.920 --> 0:15:13.120 Sometimes these surveys are a little bit recncy bias. You know, 0:15:13.200 --> 0:15:15.360 actors had a good year, but clear that's good news 0:15:15.360 --> 0:15:18.840 for Active. That was one of our takeaways. Thematic Equity 0:15:19.600 --> 0:15:22.240 ranked number one in what would you like to see 0:15:22.240 --> 0:15:26.680 more of discretionary active was two. But thematic and we've 0:15:26.720 --> 0:15:28.960 always been bullish on thematics because it's a great compliment 0:15:29.040 --> 0:15:30.800 to cheap beta. It's not competing with it. You can 0:15:30.880 --> 0:15:33.240 just add a little theme on top of your cheap beta. 0:15:33.320 --> 0:15:35.880 You don't disturb all the serious thoughts. You can have 0:15:35.880 --> 0:15:38.640 a little fun. So thematic equity did better than I 0:15:38.680 --> 0:15:40.800 thought in terms of what people want to see more 0:15:40.800 --> 0:15:45.000 of and what really did not do well. No surprises, ESG. 0:15:45.320 --> 0:15:48.080 That's fallen down. It ranked below money market funds in 0:15:48.120 --> 0:15:49.560 terms of what you want to see, and nobody wants 0:15:49.560 --> 0:15:51.920 to see much from money market funds, right, that's pretty boring. 0:15:51.960 --> 0:15:53.480 It was like number seventh eighth in the list, So 0:15:53.880 --> 0:15:57.120 there's a shifting going on in some of the you know, 0:15:57.120 --> 0:16:01.080 sort of more non beta areas. So that would be 0:16:01.160 --> 0:16:03.160 probably the biggest takeaway. But there was a couple other 0:16:03.200 --> 0:16:04.640 little ones in here that we can go over. 0:16:05.840 --> 0:16:07.800 Ethan, what jumped out at you in this survey. 0:16:08.160 --> 0:16:10.920 One thing that was interesting was how investors are picking 0:16:10.960 --> 0:16:12.960 ETFs and some of the criteria that they're looking at. 0:16:13.040 --> 0:16:14.960 So one thing I thought was really interesting. We had 0:16:15.000 --> 0:16:17.920 asked what is the minimum asset threshold? You want before 0:16:17.960 --> 0:16:20.720 you buy an ETF, and like more than half was 0:16:21.000 --> 0:16:23.880 less than thirty million. Some had no minimum threshold at all. 0:16:24.080 --> 0:16:24.400 A lot. 0:16:24.480 --> 0:16:27.000 So I thought that it shows a lot of progress 0:16:27.040 --> 0:16:29.440 in the investor right, and that they're not just looking 0:16:29.480 --> 0:16:32.400 at the big products with the big assets. They're looking 0:16:32.440 --> 0:16:35.160 at a lot of interesting ideas, right, and products a 0:16:35.160 --> 0:16:37.120 lot of some of the more interesting ones are small, 0:16:37.120 --> 0:16:39.800 they're new, they're coming from smaller issuers. So I'd like 0:16:39.920 --> 0:16:43.360 to see that the investors were looking at smaller ETFs, 0:16:43.400 --> 0:16:45.800 and I think it shows that they understand the products 0:16:45.840 --> 0:16:46.960 more and all they work. Right. 0:16:47.400 --> 0:16:50.840 Yeah, that was a chakra for me because over the 0:16:50.880 --> 0:16:53.680 years we come up with a field implied liquidity which 0:16:53.720 --> 0:16:56.200 is based on Dave Abner's formula from his book The 0:16:56.240 --> 0:16:59.040 ETF Handbook, and that just tells you how liquid the 0:16:59.080 --> 0:17:01.360 basket is. Because if you're out there listening and you're 0:17:01.360 --> 0:17:03.120 looking at ETFs and you look at the volume, it's 0:17:03.160 --> 0:17:06.240 good to have volume. That's really great. You can trade 0:17:06.280 --> 0:17:08.520 those all day. But there's new ets for example, they 0:17:08.520 --> 0:17:10.960 don't have a lot of volume. But if the if 0:17:11.080 --> 0:17:13.040 market makers in the market, when they see orders come 0:17:13.040 --> 0:17:15.919 in for an ETF, they don't look at the actual ETF. 0:17:15.920 --> 0:17:18.000 They look at the basket because if they're going to 0:17:18.040 --> 0:17:19.560 sell you the ETF, I'm just going to give you 0:17:19.600 --> 0:17:22.120 shares of, say ARC, since it's come up a bunch 0:17:22.160 --> 0:17:25.240 of times, Well I'm now short ARC. Well I'm going 0:17:25.320 --> 0:17:27.600 to go and buy the basket of the of the 0:17:27.640 --> 0:17:30.359 stocks because later I've got to go hand in the 0:17:30.400 --> 0:17:32.920 basket to the issuer and get the shares back. So 0:17:32.920 --> 0:17:35.280 I'm flat again. So in order to sell you ARC, 0:17:35.320 --> 0:17:37.879 I've got to go get the basket of stocks. So 0:17:37.920 --> 0:17:40.280 if the basket of stocks is a liquid I should 0:17:40.320 --> 0:17:42.520 be able to give you a good deal, even if 0:17:42.880 --> 0:17:45.800 ARC doesn't trade a lot. And that's generally why imply 0:17:45.880 --> 0:17:48.760 liquidity works most in a stock you don't have that. 0:17:49.000 --> 0:17:51.320 The liquidity on the screen is all there is. But 0:17:51.320 --> 0:17:53.800 with an ETF, because you can do creations of redemptions 0:17:53.960 --> 0:17:56.960 by handing in the basket for more shares of the ETF, 0:17:57.000 --> 0:18:00.639 the basket liquidity is just as usable. And so in 0:18:00.680 --> 0:18:02.919 the first book I wrote, which you know, that's how 0:18:02.960 --> 0:18:06.399 we met, you know, implied liquidity to me is the 0:18:06.440 --> 0:18:09.680 key to unlocking the toolbox and using more ETFs beyond 0:18:09.680 --> 0:18:12.480 the most popular ones you can go deep. There are 0:18:12.520 --> 0:18:15.040 like a handful of ETFs that have neither high volume, 0:18:15.080 --> 0:18:17.600 they have low volume and low implied liquidity. Like for example, 0:18:18.280 --> 0:18:22.760 I shares Columbia local Columbia stocks. It doesn't trade a lot, 0:18:22.800 --> 0:18:25.120 the stocks don't trade a lot. That's a case where 0:18:25.160 --> 0:18:27.040 you're going to have to pay up in a big spread. 0:18:27.480 --> 0:18:29.919 But if you have one or the other, you should 0:18:29.920 --> 0:18:32.080 demand tight spreads in your trading. And I think that's 0:18:32.119 --> 0:18:35.119 the takeaway here that people are getting, Okay. 0:18:34.840 --> 0:18:35.800 What else helped out you? 0:18:36.240 --> 0:18:39.199 The one about would always say, Okay, when you're on 0:18:39.240 --> 0:18:41.640 this selection criteria, what are some of the things you're 0:18:41.640 --> 0:18:45.400 looking at, like size, expense ratio, performance, And I think 0:18:45.400 --> 0:18:47.720 the one that came up first was past performance, which 0:18:47.760 --> 0:18:49.160