WEBVTT - 23 ETFs for 2023 0:00:05.920 --> 0:00:13.200 Welcome to Trilliance. I'm Joel Webber and I'm Eric Beljunas. Eric. 0:00:13.320 --> 0:00:17.239 Welcome to It's pretty good. It's gonna be It's gonna 0:00:17.239 --> 0:00:20.439 be a lot like or different. Some things the same, 0:00:20.520 --> 0:00:22.840 some things are different. I'm looking forward to it, though 0:00:23.200 --> 0:00:26.200 it's hard to believe. I'm old enough where I just 0:00:27.520 --> 0:00:29.720 would be like in a movie where they like the 0:00:29.760 --> 0:00:33.080 future really far in the future, we're Yeah, I think, 0:00:33.159 --> 0:00:35.320 um just hard to believe how how old we're getting. 0:00:35.600 --> 0:00:36.960 When you think of that, do you think like Blade 0:00:37.000 --> 0:00:39.360 Runner or do you think like ack me cartoons. I'm 0:00:39.400 --> 0:00:42.879 thinking like Escape from New York or Terminator. I think 0:00:42.960 --> 0:00:45.839 Escape from New York might have been or something. They're like, 0:00:45.840 --> 0:00:50.120 we'll wait wait past that. Okay, So we've got some 0:00:50.159 --> 0:00:54.840 tickers for the year ahead. Yeah. So we did our outlook, 0:00:54.840 --> 0:00:57.720 which is sort of the more traditional thing that analysts do, 0:00:57.800 --> 0:01:01.240 especially in Blueberg Intelligence. But one of the not so 0:01:01.360 --> 0:01:04.840 traditional thing we do is a little bit maybe buzz feedish. 0:01:04.840 --> 0:01:07.480 We make a listical which is their twenty three e 0:01:07.600 --> 0:01:11.560 t f s we're watching, And this was born out 0:01:11.560 --> 0:01:15.319 of we have all of the analysts occasionally do something 0:01:15.319 --> 0:01:17.440 called the Money Show, which is an event that is 0:01:17.480 --> 0:01:20.080 all of our different cities, and it's direct retail investors 0:01:20.080 --> 0:01:22.200 go to these hotels and just here from experts. There's 0:01:22.200 --> 0:01:26.720 no middle people, no advisors, no institutions, nothing at these shows. 0:01:26.880 --> 0:01:29.240 These people want to hear about tickers. They don't really 0:01:29.240 --> 0:01:32.400 care about your trends or you're you know, four thousand 0:01:32.400 --> 0:01:34.920 foot view. They they're just curious about all the new 0:01:34.959 --> 0:01:38.360 gadgets and tickers that they have access to. And E 0:01:38.480 --> 0:01:40.679 t F give you access to a lot. So we 0:01:40.800 --> 0:01:42.560 do this list not to say these e t F 0:01:42.600 --> 0:01:44.160 s are going to go up or down. We can't 0:01:44.160 --> 0:01:46.680 do that. We don't give investent advice. However, these are 0:01:46.720 --> 0:01:48.960 e t F s that we think about and have 0:01:49.080 --> 0:01:51.640 moved us or that we are watching because they sort 0:01:51.680 --> 0:01:53.760 of tap into something else going on or one of 0:01:53.760 --> 0:01:56.160 our big themes. And so these are just generally e 0:01:56.280 --> 0:01:58.040 t s on our mind that we will be checking 0:01:58.080 --> 0:02:01.240 in too regularly in the new year. So joining us 0:02:01.240 --> 0:02:06.280 for this episode James Safer and Athanasios Seraphagus with Bloomberg 0:02:06.320 --> 0:02:11.880 Intelligence as well as Scarlet Food with Bloomberg News. There's 0:02:11.880 --> 0:02:18.840 time on Trilliance for three. James, Athanasios, Scarlett thanks for 0:02:18.880 --> 0:02:21.960 joining us on Trillians. Thank you, Yeah, thanks for having me. 0:02:23.040 --> 0:02:25.560 Glad to be back. Okay, James, why don't you kick 0:02:25.639 --> 0:02:29.320 us off? What's your top pick for next year? Yeah? 0:02:29.360 --> 0:02:31.800 So in the intra, Eric said, it's sometimes it's a ticker. 0:02:31.880 --> 0:02:34.919 Sometimes it's something that's more emblematic if something we're watching. Um, 0:02:34.960 --> 0:02:37.320 so mine is VTV, which is a very boring pick. 0:02:37.360 --> 0:02:40.240 It's the Vanguard Value Fund. But the reason I'm picking 0:02:40.240 --> 0:02:42.560 it is because Vanguards has a patent in the way 0:02:42.560 --> 0:02:45.280 that they operate this fund. So VTV is actually a 0:02:45.360 --> 0:02:49.120 share class of the Vanguard Value Mutual Fund Index fund. 0:02:49.680 --> 0:02:51.799 That process has patents, so nobody else has been able 0:02:51.840 --> 0:02:53.960 to mimic that. Every et F has been a standalone fund. 0:02:54.440 --> 0:02:58.959 But in May of three that patent expires. Now, if 0:02:58.960 --> 0:03:01.919 this isn't mean yeah, I mean if this was eight 0:03:01.960 --> 0:03:04.480 years ago, I'd be like, we'd be jumping from the rooftops, 0:03:04.520 --> 0:03:06.520 like this could be a huge deal, right, I mean 0:03:06.600 --> 0:03:09.120 right now, because it's a lot of people already converting 0:03:09.120 --> 0:03:10.680 e t f s are way bigger than they were 0:03:10.720 --> 0:03:13.160 when this patent was a much bigger deal, So we 0:03:13.200 --> 0:03:14.720 don't know how big of a deal it's going to 0:03:14.760 --> 0:03:16.760 be but I'd be shocked if we don't see some 0:03:16.800 --> 0:03:19.919 sort of asset managers looking at VT things like VTV 0:03:20.360 --> 0:03:22.480 and saying, maybe we can do this rather than converting 0:03:22.480 --> 0:03:25.160 our entire fund, or at least talking about doing it now. 0:03:25.200 --> 0:03:27.760 I don't know if we'll see someone do it, Ine, 0:03:27.760 --> 0:03:29.960 that'd be very interesting to watch, um, but I think 0:03:30.000 --> 0:03:32.040 there'll be a lot of people looking at that, that 0:03:32.440 --> 0:03:37.120 actual structure and thinking about implementing it themselves. Yeah, um, 0:03:37.160 --> 0:03:42.120 this is well. Conversions are huge. There's UM sixty billion 0:03:42.160 --> 0:03:44.520 dollars worth of mutual funds that have converted into e 0:03:44.600 --> 0:03:47.160 t f s from big issuers and Fidelity just not 0:03:47.400 --> 0:03:50.240 it is a big deal. So this is another option 0:03:50.280 --> 0:03:53.160 for them potentially that's opened up. However, I ran into 0:03:53.200 --> 0:03:56.040 the woman who was the lawyer on m Guinness Atkinson 0:03:56.080 --> 0:04:00.120 the first conversion. She downplayed it. She says this, um A, 0:04:00.280 --> 0:04:02.440 there's several patents they have that are related to it, 0:04:02.800 --> 0:04:06.640 and Vanguard could probably prolong that. So there's some legal 0:04:06.680 --> 0:04:09.120 things that could happen. Also, a lot of these issuers 0:04:09.120 --> 0:04:12.320 have moved on already. They've launched their own ETFs that 0:04:12.320 --> 0:04:15.760 are clones. They're doing conversions. Um. The other thing is 0:04:16.160 --> 0:04:19.560 with e t F share class. It helps if you 0:04:19.560 --> 0:04:22.360 have inflows, but if you have outflows, then it can 0:04:22.400 --> 0:04:24.640 sometimes actually mean that the e t F gets capital 0:04:24.680 --> 0:04:27.359 gains from the mutual fund seeing outflows, and that that's 0:04:27.400 --> 0:04:30.120 like the opposite of what you want. So there's it's 0:04:30.120 --> 0:04:32.479 a little trickier than people think. I think it will 0:04:32.520 --> 0:04:35.880 be interesting for sure. Um, but I'm I'm a little 0:04:36.760 --> 0:04:41.200 I don't know, i uh skeptical that will see big 0:04:41.240 --> 0:04:43.919 money use this route. I think though, I'm I'm with 0:04:43.960 --> 0:04:46.000 Derek for the most part. I think, like I said 0:04:46.080 --> 0:04:47.720 eight years ago, this would be I think this would 0:04:47.720 --> 0:04:50.479 be a huge talking point. Um. Right now, I think 0:04:50.480 --> 0:04:52.440 it's more just like is somebody going to do this? 0:04:52.760 --> 0:04:55.040 And obviously, I mean the same thing was with mutual 0:04:55.040 --> 0:04:57.599 fund conversions. We were early in saying that we thought 0:04:57.600 --> 0:04:59.880 there was gonna be a mask conversions of mutual funds ETFs. 0:05:00.040 --> 0:05:01.880 A lot of people in the industry disagree with us. 0:05:02.120 --> 0:05:05.400 We're not as bullish on this this trend taking hold, 0:05:05.480 --> 0:05:11.960 but um, we'll definitely be watching. Especially give me an 0:05:11.960 --> 0:05:13.640 e t F that we're gonna we should know about 0:05:13.680 --> 0:05:16.280 next year. What are you watching? Sure? So one thing 0:05:16.320 --> 0:05:19.200 that's on my radar for next year is Russia. Remember 0:05:19.320 --> 0:05:22.479 this story for the Russia ets this year, one in 0:05:22.520 --> 0:05:26.159 particular rs X, which was the Vanneck Russia e t F. 0:05:26.960 --> 0:05:29.680 It was the biggest one. But I think this story 0:05:29.760 --> 0:05:32.320 has to come to a close next year. These are 0:05:32.320 --> 0:05:35.560 still halted, so a lot of investors are still stuck 0:05:36.000 --> 0:05:40.160 with this e t F. There's been some process beginning 0:05:40.200 --> 0:05:42.440 to unwind. Some of the other ones, like I Shares 0:05:42.480 --> 0:05:44.359 have said they're going to start liquidating it. There's a 0:05:44.360 --> 0:05:47.320 lot in Europe. Our van Neck hasn't said anything yet, 0:05:47.480 --> 0:05:49.000 but I think this is gonna be a big year 0:05:49.160 --> 0:05:52.040 where this starts to unwind and it impacts a lot 0:05:52.080 --> 0:05:54.640 of other ETF. A lot of emerging market BTF are 0:05:54.640 --> 0:05:57.680 still holding Russia. This is a roach motel. You you 0:05:57.760 --> 0:05:59.719 got in and you can't get out, and people have 0:05:59.760 --> 0:06:04.080 been up there for for months essentially. Yeah, in March 0:06:04.120 --> 0:06:06.880 will be like almost a year. So and it's not 0:06:06.960 --> 0:06:09.640 just RSX. People don't realize that there is still Russia 0:06:09.680 --> 0:06:13.880 stocks splattered all over these random ETFs. So i'd like, 0:06:14.080 --> 0:06:17.080 you know, I Share has already begun the process, so 0:06:17.120 --> 0:06:19.920 it's probably gonna look similar to like a bankruptcy proceeding. 0:06:19.960 --> 0:06:22.159 They're going to try to get what they can when 0:06:22.160 --> 0:06:24.279 they can and start to pay out investors. So I 0:06:24.279 --> 0:06:26.119 think that RSX is going to be a big story 0:06:26.160 --> 0:06:28.839 for next year. Is that how this thing gets unwound 0:06:29.279 --> 0:06:31.400 and investors at least get some of their money back. 0:06:31.680 --> 0:06:34.159 What happens if it's an emerging market et F and 0:06:34.200 --> 0:06:37.279 it has some Russia exposure? Yeah, I think they're gonna try. 0:06:37.440 --> 0:06:40.000 I think would be the same process. But what people 0:06:40.040 --> 0:06:42.599 don't realize is the emerging market ones hold way more 0:06:42.680 --> 0:06:44.960 than even RSX. Our access is just I think a 0:06:45.000 --> 0:06:48.160 really good indication of how this might work. But yeah, 0:06:48.200 --> 0:06:50.160 so if you hold like e M or im G, 0:06:50.480 --> 0:06:52.640 there's still Russia stocks stuck in there, even the big 0:06:52.720 --> 0:06:55.800 vanguard once. So I'd be really interesting to see how 0:06:55.880 --> 0:06:58.400 this all gets uh, you know, how will they try 0:06:58.400 --> 0:07:00.599 to get some money out of it? Or if there's 0:07:00.600 --> 0:07:03.320 some resolutions of the war next year to start seeing 0:07:03.360 --> 0:07:06.480 this onlinding process. If I'm in that fund, I just say, 0:07:06.520 --> 0:07:08.960 don't do anything. Let me just wait till some resolution 0:07:09.080 --> 0:07:11.640 or at least hope for that. This could be years, 0:07:12.000 --> 0:07:14.320 because I'd rather I'd rather wait than get nothing now. 0:07:15.040 --> 0:07:17.560 Not as well. I mean, I don't think RUSH is 0:07:17.560 --> 0:07:20.080 going to exclude itself from the global world, you know, 0:07:20.560 --> 0:07:23.000 capital markets forever. Yeah, I think at some point to 0:07:23.120 --> 0:07:25.520 be a resolution. Um, but maybe I'm wrong. But it 0:07:25.560 --> 0:07:27.880 doesn't matter. It's like a tire or win if you 0:07:28.080 --> 0:07:33.280 if you wait, you can't lose anymore. It's already nothing, Okay, okay, next, next, 0:07:33.480 --> 0:07:37.680 unless you need the cash eric next. Yeah, So you 0:07:37.720 --> 0:07:40.080 know how it used to be like all about growth 0:07:40.160 --> 0:07:43.720 and work from homestocks and ARC and everything. Well, obviously 0:07:43.720 --> 0:07:47.239 when the Fits started hiking, everything changed and fundamentals became 0:07:47.280 --> 0:07:53.680 cool again, right, became essential essential. Yes, as Bogel says 0:07:53.760 --> 0:07:57.040 in the End, reality rules, and so ARC is taken 0:07:57.080 --> 0:08:01.080 to quoting Jack Bogel, like spend it two years living 0:08:01.760 --> 0:08:07.240 book in his world. Yeah, so cows. And obviously this 0:08:07.280 --> 0:08:09.840 is one that had a big year this year. Curious 0:08:09.840 --> 0:08:12.720 to see if this maintains this year next year. This 0:08:12.800 --> 0:08:16.400 basically is NETF that looks at free cash flow and 0:08:17.000 --> 0:08:20.720 free cash flow rules. In this kind of environment, it matters. Now, Yeah, 0:08:20.720 --> 0:08:23.640 if you have cash, you have there's stuff you can do. 0:08:24.120 --> 0:08:27.240 Having cash gives you protection from these horrible markets. And 0:08:27.280 --> 0:08:29.720 so this is an ETF that wasn't up really, but 0:08:29.800 --> 0:08:33.280 it wasn't down, and so just to tread water, you 0:08:33.320 --> 0:08:35.200 outperform the market by a lot. This thing was in 0:08:35.200 --> 0:08:38.400 the top twenty of flows and it spawned a bunch 0:08:38.440 --> 0:08:43.080 of little sequels. Calf bull bull is half as a 0:08:43.160 --> 0:08:46.000 small cap version of cows, right, that's right, So what's 0:08:46.040 --> 0:08:50.320 bull bull is the cash cows? But growth like a 0:08:50.400 --> 0:08:52.600 growth version of the cash cow. Interesting, so you can 0:08:52.679 --> 0:08:55.720 find growth and cash flow yep, and the cow is 0:08:55.800 --> 0:08:59.280 the emerging market cash cow. So this, this firm Pacer 0:08:59.440 --> 0:09:01.199 locked in on is hit. And every time you have 0:09:01.240 --> 0:09:04.360 an indie blockbuster, they launched the sequels just like movies 0:09:04.840 --> 0:09:07.600 A sudden, it's your franchise Rocky seven. Yeah, like this 0:09:07.679 --> 0:09:09.880 is it. So it's interesting to see how this will 0:09:09.960 --> 0:09:13.920 keep up. But overall I am watching fundamentally driven e 0:09:14.000 --> 0:09:16.840 t F s. I think they're gonna have actor Now. 0:09:16.920 --> 0:09:19.400 By the way, is it is fundamental as a factor. 0:09:19.440 --> 0:09:23.120 You could like throw that in with momentum and value 0:09:23.120 --> 0:09:26.679 and both audmental factors are built on fundamentals. So but 0:09:26.760 --> 0:09:30.000 like momentum is not really fundamentals. Yeah, I mean, oh yeah, 0:09:30.000 --> 0:09:32.800 you're right, that's just on price movement alright, value though, 0:09:32.920 --> 0:09:35.640 is priced to earning different ways to define it. I 0:09:35.679 --> 0:09:38.560 would say that factors are within the larger world of 0:09:38.559 --> 0:09:43.839 fundamental ETFs. Factors are a slice of that big tent, James. 0:09:45.840 --> 0:09:47.680 So I'm going to go to one that I talked 0:09:47.720 --> 0:09:50.199 about every time I'm on trillions. I feel like, but 0:09:50.400 --> 0:09:53.320 this is warranted, for there's a lot of news around GBTC, 0:09:53.440 --> 0:09:56.240 which is the Great Scale Bitcoin truss Um. So this 0:09:56.360 --> 0:09:59.079 thing closed at a record discount. In your day, we 0:09:59.160 --> 0:10:01.640 see a trade and a fifty percent discount, which basically 0:10:01.720 --> 0:10:04.200 means the price of the shares of this trust are 0:10:04.240 --> 0:10:07.000 trading at a fifty percent discount to the underlying value 0:10:07.000 --> 0:10:09.560 of the bitcoin it holds. So yeah, So basically, if 0:10:09.600 --> 0:10:14.480 bitcoins at twenty, this thing is trading at ten. Yeah, roughly, 0:10:14.559 --> 0:10:17.520 So you basically get a gigantic hair cut off the 0:10:17.559 --> 0:10:20.360 price of bitcoin if you're investing in this. But but 0:10:20.720 --> 0:10:23.040 right now, there's no way to arbitrage that difference, right, 0:10:23.120 --> 0:10:24.760 But the benefit is if you buy this now, like 0:10:24.800 --> 0:10:27.000 you said, we'll use the twenty thousand number you used. 0:10:27.400 --> 0:10:28.880 If you go from ten to twenty, A lot of 0:10:28.880 --> 0:10:30.640 people think fifty percent discount. I'm going to get a 0:10:30.640 --> 0:10:32.839 fifty percent return, but that's a hundred percent return, ten thousand, 0:10:33.520 --> 0:10:35.760 hundred percent returns. So this is big money and we're 0:10:35.760 --> 0:10:38.560 seeing that come out in lawsuits. So part of what's 0:10:38.559 --> 0:10:41.120 happening is Grayscale wants to convert this to an ETF. 0:10:41.240 --> 0:10:43.040 They've been died by the SEC, as we've covered here 0:10:43.080 --> 0:10:45.679 many times. They have now sued the SEC after the 0:10:45.760 --> 0:10:49.240 last denial. We're expecting oral arguments. There's written arguments going 0:10:49.240 --> 0:10:51.480 on right now. Oral arguments like actual core cases going 0:10:51.520 --> 0:10:53.920 to happen in February and March. We'll get a decision, 0:10:54.080 --> 0:10:57.280 likely before likely at some point in in the second quarter, 0:10:57.640 --> 0:10:59.760 possibly in the third quarter. Then we can see a 0:10:59.800 --> 0:11:02.120 PELS but who knows. We're gonna be watching that very closely. 0:11:02.640 --> 0:11:05.760 The other thing is what happens when you sue the SEC. 0:11:06.320 --> 0:11:09.120 What kind of likelihood of success do you have? YEA. 0:11:09.200 --> 0:11:12.080 So we actually have litigation analysts here in Bloomberg Intelligence 0:11:12.080 --> 0:11:14.840 who are covering this from the litigation standpoint, and you'll 0:11:14.960 --> 0:11:16.839 see if you go on Twitter or social media, you'll 0:11:16.840 --> 0:11:18.439 see people talk about this like this is a frivolous 0:11:18.520 --> 0:11:21.160 lawsuit to sue the SEC a regulator but there's a 0:11:21.240 --> 0:11:22.959 process set up for this. It's called an AP a 0:11:23.040 --> 0:11:25.960 procedural act. Basically you're supposed to treat like situations alike. 0:11:26.320 --> 0:11:28.520 Elliot Stein is our litigation analyst, and he gives them 0:11:28.520 --> 0:11:31.839 an odds around probably closer to thirty than fifty in that. 0:11:32.440 --> 0:11:38.400 But it's not a frivolous situation. On the gp GBPC lawsuit, 0:11:38.640 --> 0:11:41.079 I mean, the option is you can. You can it 0:11:41.080 --> 0:11:43.200 would be buying GBDC in some way, right, I mean, 0:11:43.240 --> 0:11:45.360 there's this some way you can short bitcoined by GBDC, 0:11:45.480 --> 0:11:46.679 stuff like that. People have been doing that for a 0:11:46.760 --> 0:11:48.880 long time. It has not worked out in the last 0:11:48.960 --> 0:11:51.880 four years. Um, So that not only is that lawsuit 0:11:51.960 --> 0:11:54.480 going on, now we have an investor for Tree Capital, 0:11:54.520 --> 0:11:56.280 which is an activist they run hedge funds or an 0:11:56.280 --> 0:12:00.160 activist investor special situation, and now they've sued grace Al 0:12:00.240 --> 0:12:03.160 to get more information. So there's so many different things 0:12:03.200 --> 0:12:05.000 happened lawsuit. And then we just had a letter from 0:12:05.000 --> 0:12:07.400 Michael Snison I might be pronounced his last name wrong. 0:12:07.400 --> 0:12:09.720 I'm sorry. He's the he's the CEO of Gray Scale 0:12:10.040 --> 0:12:12.360 and he basically says, if we failed to convert this 0:12:12.440 --> 0:12:13.640 to an e t F. We're going to do a 0:12:13.720 --> 0:12:16.959 tender offering of the shares Virtue wants to owe them 0:12:17.000 --> 0:12:19.559 to open redemption program. I mean, there are so many things. 0:12:19.600 --> 0:12:20.959 We could do a whole show on this. There's a 0:12:20.960 --> 0:12:23.360 whole so it's it's gonna be a lot happening in 0:12:24.280 --> 0:12:27.520 this product. Yeah. No, GBTC is endlessly FAST's funny. It's 0:12:27.520 --> 0:12:32.360 not even an ETF, but it's like, yeah, but it 0:12:32.880 --> 0:12:35.400 attracted money because it seemed like an e t F 0:12:35.520 --> 0:12:37.360 too many people and it was just the convenient way 0:12:37.400 --> 0:12:40.439 to get exposure. That said. What I'm also watching with 0:12:40.720 --> 0:12:43.080 crypto is how many filings are we going to see? 0:12:43.480 --> 0:12:47.839 Did the SPF drama scare away the market? But we've 0:12:47.920 --> 0:12:50.560 seen already one filing here in the US to actually 0:12:51.000 --> 0:12:53.719 for crypto products that are going to come out, And 0:12:53.800 --> 0:12:56.240 in Hong Kong they launched their first two and they've 0:12:56.320 --> 0:12:59.480 gotten decent money. So there's been a couple rays of 0:12:59.600 --> 0:13:03.480 light that this is going to carry on after SPF 0:13:03.840 --> 0:13:05.960 and the thrill of watching him go to jail is gone. 0:13:07.160 --> 0:13:08.800 What do you got next? Deeric? One of the ones 0:13:08.840 --> 0:13:12.200 I'm watching next year is s t r V, which 0:13:12.200 --> 0:13:13.800 a lot of people don't know, but it's the Strive 0:13:13.960 --> 0:13:17.839 five ETF. And this is part of a theme that 0:13:17.880 --> 0:13:20.640 I've been writing about, which is the cultural wars bleeding 0:13:20.679 --> 0:13:23.480 into the E t F world. Strive basically came out 0:13:23.520 --> 0:13:27.240 and said, you know, basically in a reaction to black Rock, Look, 0:13:27.320 --> 0:13:29.880 we're going to track the market like Beta, just like 0:13:29.920 --> 0:13:32.000 a regular index fune. We're gonna track all different areas 0:13:32.000 --> 0:13:35.120 of the market like black Rock does, except we're just 0:13:35.200 --> 0:13:37.439 going to vote for companies to make profits. We're not 0:13:37.480 --> 0:13:39.920 gonna do anything that's E s G. That's what I 0:13:39.960 --> 0:13:41.560 guess the name comes from, like, we want with them 0:13:41.600 --> 0:13:44.600 to strive for excellence, not for these E s G programs. 0:13:44.640 --> 0:13:46.720 So for the anti e s G crab, it's supposed 0:13:46.720 --> 0:13:49.839 to appeal to them. They have some big backers. This 0:13:49.960 --> 0:13:52.120 thing already has a decent amount of assets. The company 0:13:52.160 --> 0:13:55.439 itself has half a billion in assets. Pretty good start. 0:13:56.040 --> 0:13:59.240 This is also just interesting in that black Rock and 0:13:59.320 --> 0:14:03.040 Vanguard have started to look at programs where they're going 0:14:03.080 --> 0:14:05.439 to let their own their investors have a say and 0:14:05.520 --> 0:14:07.920 how their shares are voted. Be interesting to see if 0:14:07.960 --> 0:14:10.160 that sort of steal some of the thunder of this 0:14:10.320 --> 0:14:12.920 idea because if black Rock and Vanguard are going to 0:14:13.000 --> 0:14:15.280 sort of just turn over the voting, do you need 0:14:15.360 --> 0:14:17.920 to Strive. Um, I'm sure Strive would make a case 0:14:17.960 --> 0:14:21.040 while they're still important. But that is a big thing 0:14:21.120 --> 0:14:23.800 that this is a big issue because black Rock and 0:14:23.880 --> 0:14:26.240 Vanguard owns so much of the stock market and how 0:14:26.320 --> 0:14:30.760 they vote has a powerful position, and so this decentralization 0:14:31.280 --> 0:14:34.360 of that voting is going to be interesting. Strives in 0:14:34.480 --> 0:14:37.000 here basically saying we'll do it this one way, and 0:14:37.080 --> 0:14:39.520 then E s G concerns Are they legit? Are they not? 0:14:40.240 --> 0:14:42.640 So there's this whole area of the E t F 0:14:42.760 --> 0:14:46.880 world that sort of become a political football, and so 0:14:47.160 --> 0:14:49.760 it would be interesting to see if any big real 0:14:49.880 --> 0:14:52.960 money moves over there or if this just becomes something 0:14:53.040 --> 0:14:55.320 that we spend ten percent of our time talking about 0:14:55.360 --> 0:14:58.040 but makes up like point five percent of the assets um, 0:14:58.120 --> 0:15:00.040 which is generally what E s G is like. And 0:15:00.040 --> 0:15:03.840 also interesting to launch with Drill, the first E t 0:15:04.000 --> 0:15:05.800 F that they had, and then follow up with something 0:15:05.880 --> 0:15:08.840 that's much more mainstream. So be curious to see where 0:15:08.880 --> 0:15:18.600 they go. Okay, James, next, Yeah, so I'm gonna go 0:15:18.680 --> 0:15:20.680 with one that a lot of people probably aren't talking 0:15:20.680 --> 0:15:22.520 about or don't even know of. It's gonna be the 0:15:22.560 --> 0:15:26.120 Matthews China Active E t F m H and they 0:15:26.160 --> 0:15:28.600 are just a hard traditional active manager. They tend to 0:15:28.640 --> 0:15:31.240 be relatively concentrated in their picks. They have a bunch 0:15:31.280 --> 0:15:33.440 of mutual funds. So m c h f X is 0:15:33.440 --> 0:15:36.000 the mutual fund that this is basically UM a clone of, 0:15:36.440 --> 0:15:37.840 and they put in the E t F rapper. But 0:15:37.880 --> 0:15:39.640 why I'm watching it has to do with a similar 0:15:39.680 --> 0:15:42.480 thing of what we talked about vanguards UH fund structure. 0:15:43.360 --> 0:15:46.040 M c h f X pays out massive capital gains 0:15:46.080 --> 0:15:48.400 every year because they're very active. The mutual fund structure 0:15:48.480 --> 0:15:50.600 is not great because you often end up having to 0:15:50.600 --> 0:15:53.240 pay capital gains. The E t F structure is efficient 0:15:53.320 --> 0:15:55.520 because you can wash those gains out. So this thing 0:15:55.640 --> 0:15:58.320 launched in April of last year, I believe UM, and 0:15:59.400 --> 0:16:01.480 it we're watching see one if it's gonna have any 0:16:01.520 --> 0:16:03.080 capital gains this year, which it doesn't look like it's 0:16:03.080 --> 0:16:04.640 going to. But also it's gonna have a full year 0:16:04.800 --> 0:16:07.280 the following year. So this could be literally the poster 0:16:07.440 --> 0:16:09.320 child for why you should have an E T F rapper, 0:16:09.440 --> 0:16:12.560 especially for something side by side, like, this is why 0:16:12.600 --> 0:16:14.200 you want this one and not the other one exactly. 0:16:14.240 --> 0:16:16.960 I mean in a taxed advantage account, capital gains really 0:16:17.000 --> 0:16:18.400 don't make that much of a difference. But if you're 0:16:18.400 --> 0:16:20.560 in a taxable account, and E t F can really 0:16:20.600 --> 0:16:24.720 be a vastly more efficient vehicle than a mutual fund. Okay, Athanasios, 0:16:24.960 --> 0:16:27.000 what do you got? Yeah? So on the team, you know, 0:16:27.080 --> 0:16:30.720 we all follow basketball ericsivic basketball fans. So one theme 0:16:30.840 --> 0:16:33.480 we had for next year was just sort of back 0:16:33.560 --> 0:16:38.200 to basics, right, and you know one was you know, 0:16:38.360 --> 0:16:40.680 half court shots and Ali you sent a lot of 0:16:40.760 --> 0:16:43.800 like fanfare. I think we're gonna go back to basics, 0:16:43.920 --> 0:16:48.000 more focused on fundamentals, focused on quality companies. So the 0:16:48.080 --> 0:16:51.960 one I'm picking is the dimensional US High Profitability Company, 0:16:52.160 --> 0:16:54.960 do you e t F? Which is d u HP. 0:16:55.680 --> 0:16:57.680 Now this is gonna sound crazy, but you know, member 0:16:57.760 --> 0:17:00.800 companies that would like make stuff and make money Like 0:17:01.120 --> 0:17:04.000 I like these companies, and this is what this focus 0:17:04.119 --> 0:17:06.880 is on, Like companies that make stuff and are highly 0:17:06.960 --> 0:17:09.879 profitable and have good cash flow. Uh, and it's a 0:17:10.080 --> 0:17:13.800 it's been a really good performers. This is outrageous. Yeah, 0:17:13.880 --> 0:17:17.040 it sounds people would imagine being like, Okay, yeah, let's 0:17:17.080 --> 0:17:20.119 just pick companies that have money and make stuff, and 0:17:20.280 --> 0:17:23.600 so I probably put this onto like a quality factor. 0:17:23.920 --> 0:17:26.560 So it's just trying to pick out these So when 0:17:26.600 --> 0:17:28.359 you look at it at the surface, you're like, no, 0:17:28.520 --> 0:17:30.680 this is just the S and P five, But it 0:17:30.760 --> 0:17:35.080 only hast overlap with the index. It's twenty two basis points. 0:17:35.600 --> 0:17:37.720 D f A is really specialized in this, so I 0:17:37.800 --> 0:17:41.280 think they found a really good spot where it's just 0:17:41.480 --> 0:17:43.840 different enough. But it's got a lot of names in 0:17:43.880 --> 0:17:46.120 there that I think people will recognize, but they really 0:17:46.160 --> 0:17:48.520 seem to excel in their overweights and underweights. But I 0:17:48.640 --> 0:17:50.520 think this really big theme for next year is just 0:17:50.600 --> 0:17:53.359 going to be focused, go back to fundamentals, just focus 0:17:53.440 --> 0:17:57.440 on high quality companies. Yeah, by the way, that is 0:17:57.560 --> 0:18:01.760 a companies that have money and make stuff. E t 0:18:02.720 --> 0:18:06.359 breaking news, breaking news. So Eric, how do you follow 0:18:06.400 --> 0:18:07.959 that up? Yeah, I mean I have one that's similar 0:18:08.400 --> 0:18:11.480 to that, Athanasios, And that's the advantis E t F 0:18:12.480 --> 0:18:14.080 Really all of their E t F. So I'm watching 0:18:14.200 --> 0:18:16.439 this company. A lot of people don't know who they are, 0:18:16.520 --> 0:18:19.480 but they're an active manager and the main person used 0:18:19.480 --> 0:18:22.920 to work at d f A. So I believe they've 0:18:23.000 --> 0:18:24.879 come out and said, hey, we're like d f avorite, 0:18:24.920 --> 0:18:29.080 we're cheaper and it's definitely worked. Um people should be 0:18:29.119 --> 0:18:31.119 looking at. So the one I really pointed out was 0:18:31.200 --> 0:18:34.359 a vu V, which is the small cap value e 0:18:34.520 --> 0:18:37.720 t F. This is an interesting product because in the 0:18:37.760 --> 0:18:41.000 small cap value category there are e t s from 0:18:41.040 --> 0:18:44.000 black Rock and Vanguard multiple but this e t F 0:18:44.119 --> 0:18:46.560 a v u V took in four times more flows 0:18:46.600 --> 0:18:49.240 than any of the other ones. That's hard to believe. 0:18:49.280 --> 0:18:51.840 You rarely see a category with Vanguard and black Rock 0:18:51.880 --> 0:18:54.960 where someone else wins, and you look into this, their 0:18:55.000 --> 0:18:58.320 whole product line is taken in flows in like one month, 0:18:58.480 --> 0:19:01.399 one year, year to date, like just Green look like 0:19:01.600 --> 0:19:04.399 ARC maybe three years ago. And the reason these are 0:19:04.480 --> 0:19:07.960 interesting is a that they do focus on fundamentals, which 0:19:08.000 --> 0:19:10.560 is back in vogue, and be their low cost uh 0:19:10.640 --> 0:19:12.480 these are funds that are priced that the one I 0:19:12.560 --> 0:19:15.520 just mentioned was basis points. Their U S fund is 0:19:15.600 --> 0:19:18.399 fifteen UH e M is thirty three, and they're all 0:19:18.480 --> 0:19:21.119 within that range. So this is what I would call, 0:19:21.280 --> 0:19:25.200 you know, I frequently say dirt cheap or shiny objects 0:19:25.240 --> 0:19:27.240 or where most of the flows go. This would be 0:19:27.320 --> 0:19:30.040 dirt cheap. It happens to be active, So active I 0:19:30.200 --> 0:19:33.639 think can find a home either getting very active or 0:19:33.840 --> 0:19:36.960 maybe lowering their fee and being much more moderately priced 0:19:37.480 --> 0:19:40.359 and advantas I feel has has shown that. And this 0:19:40.520 --> 0:19:43.679 company UM again it's probably one of the fastest growing 0:19:44.080 --> 0:19:47.159 on a percentage basis. But these kind of winds in 0:19:47.200 --> 0:19:50.040 these categories like beating black Rock and Vanguard is no 0:19:50.240 --> 0:19:53.040 easy feat. So uh, this is um an E T 0:19:53.240 --> 0:19:56.080