Speaker 1: Welcome to Trillians. I'm Joel Webber and I'm Eric Baltierness.
Speaker 1: We talk a lot about how hyper competitive of a
Speaker 1: landscape et f s are. You know, it's dominated by
Speaker 1: behemoths and those are the issuers and some of the
Speaker 1: older E t f s who have been around a
Speaker 1: long time collected a lot of assets. This episode, we're
Speaker 1: gonna spend more time talking about maybe some indie rock, right,
Speaker 1: so let's talk about what you call rising stars. Right,
Speaker 1: So when you think about the E t F landscape,
Speaker 1: there's products of them have less than fifty million dollars,
Speaker 1: so I would consider that oblivion. So we're talking most
Speaker 1: ETFs live in oblivion literally, so it's tough to get
Speaker 1: out of there, including a lot of the fancy tickers
Speaker 1: that we talk about. Absolutely. Now there's a firm middle
Speaker 1: class which has about of the products. Although there's lower
Speaker 1: middle class and upper middle class. There's a different degree.
Speaker 1: So between one million and a billion, to me, is
Speaker 1: this sort of middle class, and then beyond a billion
Speaker 1: is sort of you're home free. You're now rich. Your
Speaker 1: upper upper class. That's seventeen percent of the product suburbs.
Speaker 1: That's right, So oblivion or middle class. Sevent are upper class.
Speaker 1: So to go from oblivion to middle class is hard enough,
Speaker 1: but then to like go all the way into the
Speaker 1: upper class, it's it's like a swimming up stream. Ye.
Speaker 1: You know, I think this is actually happens to be
Speaker 1: a pretty decent week to bring in a little music metaphor,
Speaker 1: because you know, Spotify is in the background, having just
Speaker 1: had its sort of a non I p O I
Speaker 1: p O, right, and you actually just watched the documentary
Speaker 1: that you think kind of helps frame all of this
Speaker 1: as well. Yeah, you know, I love my music metaphors,
Speaker 1: and this one's really good. This is about a radio station.
Speaker 1: It's on showtime. I think the name of the documentary
Speaker 1: is called Dare to Be Different New Wave, and it
Speaker 1: was basically w L I R in Long Island changed
Speaker 1: Format two from classic rock, which is all anybody was
Speaker 1: playing right stair Way to Heaven like all day every day,
Speaker 1: and in eight two they switched formats completely to new wave,
Speaker 1: so they're you know, they were playing stuff like YouTube, Duran, Duran,
Speaker 1: Depeche Mode, Beastie Boys. This was all became eighties, right,
Speaker 1: that was the main stream eventually, And to me, that
Speaker 1: format change is essentially consistent with what E. T F
Speaker 1: to me are a format change, right, they are completely
Speaker 1: new wave, and that this radio station had something interesting
Speaker 1: called the Screamer of the Week. And what that was
Speaker 1: They played like a few songs that they just got
Speaker 1: in that were new and the and the people would
Speaker 1: call in and vote for their favorite one, and whichever
Speaker 1: one one they played in heavy rotation the next week.
Speaker 1: So if you look at a list of their Screamers
Speaker 1: of the week, this is like early eighties. They've got
Speaker 1: stuff on here, People or People by Depeche Mode, Pretty
Speaker 1: Persuasion by R. E. M. New Year's Day by YouTube.
Speaker 1: So they had a lot of songs that eventually became classics,
Speaker 1: but they also had some duds in their songs that
Speaker 1: you never heard of, like only You by the Flying Pickets,
Speaker 1: Connecticut by Hillary. So the Screamer of the Week was
Speaker 1: necessarily a definite classic, but it was them trying to
Speaker 1: sort of identify as early as possible a song that
Speaker 1: a breakthrough exactly. And that's what I try to do
Speaker 1: with my rising stars research when I do it on occasion.
Speaker 1: So back to the indie rock thing sort of things
Speaker 1: are the rocks maybe they make it maybe they don't.
Speaker 1: This week on Trillions the Rising Stars of the E
Speaker 1: t F World, we also have a guest Carolina Wilson,
Speaker 1: who's a reporter with Bloomberg News. She also has a
Speaker 1: daily column called E t F Watch, so she's almost
Speaker 1: the perfect person to join us and talk about some
Speaker 1: of the ones to watch right now. Carolina, Welcome to
Speaker 1: the show. You weren't born in the eighties. It's not
Speaker 1: when were you born in the year that fascinates me.
Speaker 1: First of all, she doesn't know anything about this radio
Speaker 1: station that you just talked about. Yeah, and like, to you,
Speaker 1: you two is probably this sort of like old man
Speaker 1: classic rock band, right right, like my dad's rock. But
Speaker 1: in two, I'm telling you they were new wave, and
Speaker 1: there is an equivalent to E t F. A lot
Speaker 1: of millennials that's all they know is E t F.
Speaker 1: They don't even know mutual funds anymore, and so there's
Speaker 1: definitely a consistency there. But yeah, what is new wave
Speaker 1: in current today is is going to seem like old
Speaker 1: Fogy tomorrow? Do you remember the cassette? Oh the the act.
Speaker 1: I was like, oh my god, they're gonna start asking
Speaker 1: me about bands now that I don't know. Yes, I
Speaker 1: know what a cassette is. I did, I did? Do you?
Speaker 1: How do you listen to music now Spotify? Yeah? Me too?
Speaker 1: You How about you? Are? I listened to through on
Speaker 1: Sirius in my car and then I still use iTunes
Speaker 1: old school. Yeah, I like to own it. My dad
Speaker 1: is too year old. I am. I'm okay with the
Speaker 1: world's changing. Eric, uh so, so Carolina, Um, we're gonna
Speaker 1: have Eric present his rising Star system and then we're
Speaker 1: going to critique a little bit. But let's look backwards, right, Eric,
Speaker 1: So you use this and you you look backwards at
Speaker 1: you know, ten years ago to see if you could
Speaker 1: have identified ones from history that did break through. What
Speaker 1: what tickers and e t f s popped? So in
Speaker 1: June that's about what eighteen months ago, I looked at
Speaker 1: the fastest growing e t F Here's how we do it.
Speaker 1: We basically look for a minimum masset level. In the
Speaker 1: case in June, I looked at one million minimum. Right,
Speaker 1: you have to have something going on to start, if
Speaker 1: you Yeah, if you look at an ETF that goes
Speaker 1: from one million to ten, that's a thousand percent growth rate.
Speaker 1: But that doesn't really You're right, so we look at
Speaker 1: a decent base of a hundred million back then and
Speaker 1: we saw which one's doubled assets A. So they grew
Speaker 1: by a hundred percent and broke through the billion dollar mark. Um.
Speaker 1: So there were five eighteen months ago that that fit
Speaker 1: that threshold. Um, they were a mixed bag. If you
Speaker 1: want to where are they now? And we'll look to today,
Speaker 1: there was so that's a whole another thing. Yeah. So
Speaker 1: one of them was the I Shares Edge ms C
Speaker 1: I us a momentum ETF ticker m t u M.
Speaker 1: At the time it had broken through to one point
Speaker 1: three billions, so it made my list. Today it has
Speaker 1: seven point four billion dollars. It returned in the eighteen
Speaker 1: months since identified it smash hit. This was like my
Speaker 1: you know, identifying that band before they break and all
Speaker 1: the all the radio does now is play it. That's right.
Speaker 1: So it's on every Spotify list. And Carolina she's probably
Speaker 1: written about mt u M because the flows are always
Speaker 1: making her radar. Yeah. Absolutely, But I feel like with
Speaker 1: these we have, don't we have the same issue we
Speaker 1: have with other single factor funds where they're cyclical, right,
Speaker 1: so we see money pouring into them, but I think
Speaker 1: on On Monday, m t U M fell three the
Speaker 1: SMP filed two. We have analysts saying that the momentum
Speaker 1: trade is over. Yes, this has grown a lot, but
Speaker 1: because it's such a huge tech trade count, won't we
Speaker 1: see investors yank money from this? Right? So the momentum etia,
Speaker 1: for those who don't know, is basically it's following the heat.
Speaker 1: It's looking for stocks that are doing well, and it
Speaker 1: just sort of tries to copy what's done well. And
Speaker 1: then it also has a screen for volatility, so it's
Speaker 1: not too volatile. But long story short, it's performance chasing.
Speaker 1: Right now, it's heavy tech, and it's it's gonna get hurt.
Speaker 1: But if tech starts to go down, it's gonna try
Speaker 1: to like sell the tech and latch onto what's doing well.
Speaker 1: Maybe it's utilities, who knows, Yeah, that's all it does.
Speaker 1: So it could have a rebound. But even if it
Speaker 1: does struggle a lot of times, when assets enter an
Speaker 1: e t F and it gets the seven eight billion,
Speaker 1: even if it has a rough year, it's not gonna
Speaker 1: lose all the assets. It might lose two three billion,
Speaker 1: but it's it's it is now a legit and it's
Speaker 1: the biggest momentum ETF, so it is the go to
Speaker 1: for the momentum trade. So this one popped. One that
Speaker 1: was a dud basically was f x U, which is
Speaker 1: the first trust Utilities alphabex Um. This is utility stocks,
Speaker 1: but it has an overlay of growth value screens. The
Speaker 1: reason it made my list and I learned from this
Speaker 1: is that it was used in a fund of funds
Speaker 1: and once that fund of funds kicked it out, it
Speaker 1: lost it. It's almost like it had like one gigantic investor,
Speaker 1: and so it's shrunk to two hundred million from having
Speaker 1: one point seven billion. So it's and it's only up
Speaker 1: absolutely and there's a couple in the middle, like Jeffrey Gunlock,
Speaker 1: the famous bond manager, has an e t F t
Speaker 1: O t L the double line total return. That one
Speaker 1: is up to three point four billion. That's a billion
Speaker 1: more than when we identified it. It had a three
Speaker 1: percent return. Pretty good. And then another one that I
Speaker 1: was a pretty big hit was Noble. This is the
Speaker 1: pro Shares SMP dividant aristocrats. It looks for companies that
Speaker 1: have increased their dividends for twenty five straight years. It
Speaker 1: is a rigid screen. How's Noble done in oh, b L,
Speaker 1: how's that done? Pretty well? It was up eighteen months
Speaker 1: since we looked at it. It's not three point four billion,
Speaker 1: that's about double from when we identified it. So to me,
Speaker 1: Noble was a legit hit from this list, even with
Speaker 1: its really strict requirements. Yeah, and Noble is like, look,
Speaker 1: everyone loves dividend paying stocks, even if you're not going
Speaker 1: there for yield, because this thing doesn't yield a lot
Speaker 1: because when you're that rigid, the stocks are going to
Speaker 1: be low yielding. But people just love dividend paying stocks.
Speaker 1: Envelope of cash from your grandmother. And it's also sturdy,
Speaker 1: st already company. So Noble was probably very much in
Speaker 1: a lot of like retirement accounts people who are conservative. Um,
Speaker 1: and it it spawned a few copycats. So you know
Speaker 1: you mentioned your class system earlier, Eric, because there's different
Speaker 1: kind of thresholds that ets can kind of climb through. Right,
Speaker 1: So when you think about what these ones that you
Speaker 1: identified eighteen months ago, I've done where where? How far
Speaker 1: did they get and how far could they go? Still?
Speaker 1: So all of them over a billion? So I identified
Speaker 1: them when they were sort of middle class into the
Speaker 1: elite one billion. They cracked the top. Yeah, they're they're like,
Speaker 1: they're rich. Basically they they except for f XU, which
Speaker 1: actually backslid, but the other ones are now firmly in
Speaker 1: this sort of elite category. All right, So we looked backward, Eric,
Speaker 1: you've also refined the system because of that. So let's
Speaker 1: talk about right now some current screamers that you've identified. Yeah,
Speaker 1: I feel like the when I did in the past,
Speaker 1: I got some more brand name is, like, you know,
Speaker 1: Jeffrey Gunlock and Spider and I Shares. So I tweaked
Speaker 1: it a little bit to try to get more indie
Speaker 1: e t s in there, a little more theme ets,
Speaker 1: because when you use a hundred million base, you tend
Speaker 1: to screen out some of those. So I went to
Speaker 1: a thirty million dollar base, and I just looked at
Speaker 1: which one's had the biggest percentage jump in assets, but
Speaker 1: I looked at flows. So in other words, who had
Speaker 1: the biggest organic growth of the thirty million dollar base,
Speaker 1: sorted by the percentage growth over the top five over
Speaker 1: a year, so the past twelve months. And so we'll
Speaker 1: start with the top. The one that just to me
Speaker 1: was on top by a mile was Bots the Global
Speaker 1: x Robotics and Artificial Intelligence ETF. It had thirty million
Speaker 1: dollars a year ago. It's taken in two point three
Speaker 1: billion dollars since then. That's a seven thousand eight increase
Speaker 1: of organic growth in one e t F. I don't
Speaker 1: that's literally going from oblivion to like firmly in the
Speaker 1: elites in one year. It's that you'd never see that.
Speaker 1: What is it do? So? Bots basically tracks companies that
Speaker 1: are designing UH machines and robotics things for the military,
Speaker 1: the household. It's basically tech and industrials, and it's companies
Speaker 1: really focused on robotics and artificial intelligence. Carolina, had you
Speaker 1: known about this one? Had this been on your list? Yeah? Absolutely?
Speaker 1: And I think that it's it's hard to talk about
Speaker 1: bots without mentioning it's like arch enemy Robo. Yeah, I
Speaker 1: like that. Okay, Bots launched in September. Robo also following
Speaker 1: this robotics and automation theme, launched in October. But since
Speaker 1: Bots launched, it's basically outperformed Robo. You know, we're talking
Speaker 1: about Bots being up about sixty one per cent since
Speaker 1: it launched in September versus robos fifty three percent gain
Speaker 1: in that same time frame. Um, it's funny because I
Speaker 1: think less diversification has paid off. Here Bots holds thirty companies.
Speaker 1: Robo I think is closer to what was it, ninety holdings.
Speaker 1: But then you have a significant concentration risk, right, and
Speaker 1: maybe this is where one of the cons one of
Speaker 1: those conpoints come in for Bots. Yeah. Bots his market
Speaker 1: cap weighted, as you know that that makes you have
Speaker 1: more large cap exposure. Typically Robo is equal weighted in
Speaker 1: two tiers, and uh, as Carolina said, it's a lot
Speaker 1: more diversified. Bots had a few large caps that took off,
Speaker 1: so it outperformed Robot. And you keep to go from
Speaker 1: oblivion to the elite, It's usually always going to be
Speaker 1: some kind of what I call a shiny object moment
Speaker 1: where the performance is so outrageous people cannot ignore it.
Speaker 1: They go after it like a shiny object and a
Speaker 1: little child. Right. And so this thing was up at
Speaker 1: one point over the past year. It's come down a
Speaker 1: bit in the recent sell off, but it crushed Robo.
Speaker 1: It's like Terminator too. This was like Robert Patrick, you know,
Speaker 1: in the middle of the movie, just like a object
Speaker 1: for you. Yeah, exactly well done, man, I like that, say, welcome,
Speaker 1: there we go, we're cooking with and the fee right,
Speaker 1: so robot charges basis points. Bots is at st so
Speaker 1: bots are significantly cheaper the other thing bots has and
Speaker 1: this is rare for me too. Product right robo existed
Speaker 1: bots said, Hey, I like that. Let me come out
Speaker 1: with one. This is global X. It's more liquid now
Speaker 1: it's about double the trading volume. So I'm sure robot
Speaker 1: is not thrilled about bots coming into play. But this
Speaker 1: is how brutal the et F landscape is. You can
Speaker 1: come out of the product that's very similar and just um,
Speaker 1: you know, make you eat into that other person's market
Speaker 1: specific rit man, every robot gets to find another robot. Okay,
Speaker 1: so this is shiny object, but how are people going
Speaker 1: to use it in their portfolio? When it comes to
Speaker 1: theme ETFs, I highly recommend looking at two things. The
Speaker 1: overlap with big indexes, like how much original exposure you getting.
Speaker 1: So bots only has about one percent overlap with the
Speaker 1: SMP five hundred in the MSCI world, So it's definitely
Speaker 1: capturing a lot of unique companies. Now, granted it's got
Speaker 1: paying companies and small HAPs and whatnot. But it's pretty original.
Speaker 1: So I would say that given it that it does
Speaker 1: have little overlap, which we call high active share, it
Speaker 1: should be used like hot sauce. You know. It should
Speaker 1: be something on the edge of a portfolio that you
Speaker 1: just believe in, but you're gonna you know, it's got
Speaker 1: what's more volatile than those indexes, so it could underperform
Speaker 1: by more than the index. So essentially it's something to
Speaker 1: be used in small proportions, likely um and something that
Speaker 1: you have to maybe really believe in the story because
Speaker 1: you're probably gonna experience some pretty nasty sell offs here
Speaker 1: and there. Okay, next Rising Star. The next one is
Speaker 1: the Arc web X point oh e t F, another
Speaker 1: futuristic sounding et F with the ticker r k W.
Speaker 1: It had twenty one million dollars a year ago. It's
Speaker 1: taken in four hundred and three million since then. That's increase.
Speaker 1: And this one just went won an award, right, No,
Speaker 1: So the one that won an award was a r
Speaker 1: k K a sister e t F called Arc Innovation.
Speaker 1: So this is a fun family that is managed by
Speaker 1: a woman named Cathy Wood, and they are all active
Speaker 1: and all really a lot of the products are looking
Speaker 1: at like futuristic themes like innovation, the human genome, three
Speaker 1: D printing, industrial innovation. So they try to see themselves
Speaker 1: as a the closest thing to a venture capitalist, that
Speaker 1: is an active manager. That's interesting, right, and and that's
Speaker 1: a place that active can actually play, right. So arc
Speaker 1: A r k W this this e t F is
Speaker 1: up a hundred and fift since launching in the past year,
Speaker 1: and even six percent year to date. It's been a
Speaker 1: rough year for internet type stocks, but it's still outperforming
Speaker 1: and it's been rewarded. If you can not just beat
Speaker 1: the SMP by a couple percentage points, but if you
Speaker 1: can crush it into oblivion, stomp on it and do
Speaker 1: a touchdown dance on its head, you will get assets.
Speaker 1: And that is the name of the game these days.
Speaker 1: I don't it's either all the money is going to
Speaker 1: cheap beta or these shiny objects that just basically run
Speaker 1: circles around the market. So currently, tell me about what
Speaker 1: this one does. Well, So Eric mentioned futuristic themes, it's
Speaker 1: definitely capitalizing on that. But I think another way to
Speaker 1: say that is that it's it's using these giant buzzwords
Speaker 1: right now. Right, So internet of things, cloud, computing, digital currencies.
Speaker 1: I think r W was one of the first U
Speaker 1: s ETFs to have indirect exposure to bitcoin because it
Speaker 1: held I think it's largest holding at one point was
Speaker 1: g BTC, which was this um private vehicle, but this
Speaker 1: Bitcoin trust and r K it's sister fund that you
Speaker 1: had mentioned earlier also held it. But I think that
Speaker 1: it's using some of those things to its advantage, right, Yeah,
Speaker 1: And I think if you look at the holdings, let's
Speaker 1: just look at some of the stocks and here Amazon, Tesla, Twitter,
Speaker 1: basically fang Fund. Yeah, it's it. There's but it's still
Speaker 1: not that much overlap with the SMP. It's got only
Speaker 1: overlap with that or the tech ETF. And it's interesting.
Speaker 1: We had Kathy Wood on this the E t F
Speaker 1: TV show I do, and we asked her about, hey,
Speaker 1: aren't these high octane stocks just gonna like just crash
Speaker 1: and the performance will suffer. She said something that you know,
Speaker 1: was very noteworthy, which is she considers this portfolio deep value.
Speaker 1: She considers Amazon deep value. She just says, you have
Speaker 1: to think about it ten twenty years down the road,
Speaker 1: and she just Amazon in particular. She's very bullish on
Speaker 1: that stock more than the other Fang stocks and thinks
Speaker 1: that that company is just um, you know, going to
Speaker 1: really change the game and multiple ways. So I think,
Speaker 1: you know, you make a strong sales case here, but
Speaker 1: you have to have the performance to back it up.
Speaker 1: And then for now she does, and then uh, it's look,
Speaker 1: the PE ratio is so high it's negative. It's like
Speaker 1: it's like gone to kill screen because it's got companies
Speaker 1: with negative earnings, and so it's it's just, look, this
Speaker 1: is very volatile, high high price to earnings ratio. You're
Speaker 1: paying a lot for the stocks basically, and it's costly
Speaker 1: at seventy five basis points. Okay, so the next rising
Speaker 1: star I like. I like this one because it's somewhat expected, right,
Speaker 1: and it looks outside the US because it's the emerging
Speaker 1: market Internet. Yes, e m q Q went from thirty
Speaker 1: four million dollars this time last year and it's taken
Speaker 1: in four hundred and four million, and that's a one
Speaker 1: tho increase in organic flows. I have a great story here.
Speaker 1: So I interviewed UM in May almost a year ago.
Speaker 1: Kevin Carter, he's the founder of the fund. Here in
Speaker 1: the Bloomberg office, we sat on one of these red booths. Uh,
Speaker 1: mostly because his fund was up like a whopping. It
Speaker 1: was tiny. I had to like beg my editors to
Speaker 1: let me write about this tiny, tiny, forty eight million
Speaker 1: dollar fund. And the headline that came out of that
Speaker 1: story was Chinese tech investments spur huge returns for pint
Speaker 1: sized fund. And I spoke to him maybe five or
Speaker 1: six months later. I think he called me. He was like,
Speaker 1: they had over four hundred million in assets, and he
Speaker 1: was like, remember when you called my e t F
Speaker 1: a pine sized fund. Listen these issues given like, no,
Speaker 1: it's my editor. Yeah, you forget, like especially this one.
Speaker 1: This is just one guy and an idea. So he's
Speaker 1: out there and so he really gets takes the media
Speaker 1: coverage seriously and that that one idea that he had though,
Speaker 1: was he wanted more China exposure because he looked at
Speaker 1: emerging market e t f s and realized that he
Speaker 1: couldn't get as much China as you wanted, and so
Speaker 1: e m q Q became the vehicle to do that. Right.
Speaker 1: It's funny because Eric he coined this perfectly. He said
Speaker 1: that this fund had a triple dose of China. I
Speaker 1: think it holds over sixty of its geographic allocation to
Speaker 1: Chinese companies. You compare that to e M, the colossal
Speaker 1: I Shares Emerging Markets fund that has like so that's
Speaker 1: where that triple dose comes in. But yeah, it's a
Speaker 1: super targeted Chinese Internet uh play and hugely popular, and
Speaker 1: yes it's six China. But let's just take a bigger,
Speaker 1: broader step back. The emerging markets e t f s
Speaker 1: like e M and vw O that people use, they
Speaker 1: only have about seven, eight, maybe ten percent tech. The
Speaker 1: SMP is like what tech, So you could argue that
Speaker 1: the big emerging markets in indices are underweight tech. This
Speaker 1: is a case of an e t F that just saw,
Speaker 1: and this is how a lot of ETF innovation happens.
Speaker 1: It sees a flaw in one of the big guys,
Speaker 1: and it basically comes out and tries to fill that gap.
Speaker 1: And this I think was the complaint of hey, my
Speaker 1: emerging markets e t F isn't really capturing this like
Speaker 1: juggernaut tech movement in the emerging markets, and so this
Speaker 1: one comes out and fills a void. Going back to
Speaker 1: the music analogy, Eric, at one point you said, this
Speaker 1: is a mash up it's combining two hugely popular trends
Speaker 1: into one fund. Okay, so we got one more current
Speaker 1: rising star that you've identified. What is that? The Crane
Speaker 1: Shares Bill Serrah ms C I China A share e
Speaker 1: t F k B A went from thirty five million
Speaker 1: in this time last year and it's taken two hundred
Speaker 1: and eighty million since then. And that's a lot for
Speaker 1: a single country. And it's just part of a single country.
Speaker 1: It's just the A shares of China. But what this
Speaker 1: one does that a lot of people like it's It's
Speaker 1: performance has only been four percent, so unlike the other
Speaker 1: ones which have had that shiny object moment, this one
Speaker 1: has something really interesting, which is that China a share
Speaker 1: market has largely been out of out of sight because
Speaker 1: it's only available to mainly investors. China's opening up their
Speaker 1: markets and so now big indexes like the MSc Emerging
Speaker 1: Markets are going to accept China shares years. This a
Speaker 1: t F holds all the stocks that will ultimately make
Speaker 1: it into the MSc Emerging Markets. So a lot of
Speaker 1: people buy it thinking, wow, there's two trillion benchmark to
Speaker 1: the Emerging Markets index. If I hold this. A lot
Speaker 1: of these all that money is going to have to
Speaker 1: buy a shares just to keep up with the index. Therefore,
Speaker 1: there'll be bid orders coming in for the next five years.
Speaker 1: I'll just sit tight here for five or ten years
Speaker 1: and hold the stocks that they're going to need later.
Speaker 1: It seems like a crystal ball, but there's no there's
Speaker 1: no sure thing or free lunch. But that is why
Speaker 1: the money is going to something that's only up four
Speaker 1: percent this year. They're they're planting their steak in the
Speaker 1: ground and hoping that the money sort of comes over
Speaker 1: because as those stocks are going to be owned more
Speaker 1: and more by foreign investors soon. Okay, so we've talked
Speaker 1: about some hits that have had breakthrough moments, some ones
Speaker 1: that are on the radio right now. Let's go ahead
Speaker 1: and like look forward program Carolina's Spotify playlist for for
Speaker 1: a year from now. What are the future screamers. One
Speaker 1: is pave the Global X Infrastructure et F. If if
Speaker 1: the infrastructure plans get done at some point, we're talking
Speaker 1: a couple of trillion dollars in spenditures. This e t
Speaker 1: F is all US companies, and we know Trump likes
Speaker 1: the higher US. It's also specifically shaved out utilities to
Speaker 1: a degree where it doesn't have as much rate risk,
Speaker 1: right because those are sensitive to interest rates. So if
Speaker 1: rates rise in infrastructure spending happens, this one's kind of
Speaker 1: built for that, for that long haul. So I could
Speaker 1: see this one, you know, sort of getting some traction
Speaker 1: if the infrastructure plan goes through. Pave. Okay, that's good, Carolina.
Speaker 1: What's your top pick? I like k Web. I mean
Speaker 1: this is actually another Crane shares fund, so some learned
Speaker 1: to the one that we had just talked about. But
Speaker 1: it's very similar in exposure to e m q Q,
Speaker 1: except that I think it's an even more pure play
Speaker 1: China Internet uh fund. It has almost of its exposure
Speaker 1: to China to internet companies. It's cheaper also than e
Speaker 1: m q Q is at seventy two basis points versus
Speaker 1: e m q q is eight six basis points. So
Speaker 1: I just think it's a more targeted, pure play China
Speaker 1: Internet exposure fund if that's what you're looking for. Laying
Speaker 1: down the tracks on this Spotify playlist, paved, k Web, Eric,
Speaker 1: what's track three on your future Screamer playlist? Okay, the
Speaker 1: Granite Shares has to commodity E T F S BAR,
Speaker 1: which is just like g l D. It's it's gold,
Speaker 1: but it charges twenty basis points, so it's like a
Speaker 1: It's basically they van guarded the commodity space and they
Speaker 1: came out with the E t F that's half the
Speaker 1: cost of g l D. And then the other one
Speaker 1: is also Commodity c O m B, which is a
Speaker 1: sort of all commodities in one giant basket, and that
Speaker 1: only charges twenty five basis points. Here's why I think
Speaker 1: these could hit. Commodities at some point are going to
Speaker 1: outperform the other as a classes. It could be this year.
Speaker 1: It's looking like it could be. And if and when
Speaker 1: that happens and the money you know, comes over and
Speaker 1: buys up commodities because stocks and bonds aren't doing well,
Speaker 1: these are going to be in good positions. Because yes,
Speaker 1: so they came in last year when no one won
Speaker 1: of commodities and they vanguarded the category. Currently, they came
Speaker 1: in two to three times cheaper than anyone else. Et
Speaker 1: F Securities also has a couple of cheap But if
Speaker 1: and when there's this flood of money, I see the
Speaker 1: advisor crowd choosing the cheaper ones because they love nothing
Speaker 1: more than the cheapest product. So I look out for
Speaker 1: granite shares to maybe make some headway into the commodity category.
Speaker 1: Commodities on this playlist, Carolina, what's your next track? I
Speaker 1: like a fund the takers jets US Global Jet CTF,
Speaker 1: so it holds US and international passenger airlines, aircraft manufacturers, airports,
Speaker 1: terminal services companies. It launched in April, so a few
Speaker 1: years ago, and it just crossed the hundred million dollar
Speaker 1: asset line there and I think it's it's interesting because
Speaker 1: it is almost like this little smart beta play on
Speaker 1: a specific industry. It's outperformed the broader airline index by
Speaker 1: almost eight percent. That's really boosted by the funds holding
Speaker 1: of Boeing, which is interesting to this week in light
Speaker 1: of the China tariffs news. It's interesting. You know, jets,
Speaker 1: we talked about a weedo We had that ticker competition.
Speaker 1: Jets is a great ticker, But the E t F
Speaker 1: that preceded it, that lived and died and is currently
Speaker 1: the graveyard f a A was the Airline et F.
Speaker 1: This is a rare case where an E t F
Speaker 1: comes out tracking airlines. It fails, but then someone else says, actually,
Speaker 1: we can make this work, and they launched one despite
Speaker 1: the failure of the first one. Well, jets is a
Speaker 1: way better ticker than a government agency. To cale, you
Speaker 1: got bounced in the first round for picking Tan in
Speaker 1: our Ticker Madness episode, do you, in hindsight wish you
Speaker 1: would have picked Jet? No. I stand by my my
Speaker 1: Tan designation. Alright, Eric, next track on your Rising Star playlist.
Speaker 1: Mj X The Alternative Harvest e t F. Which alternative
Speaker 1: harvest is like code word for pot. It's kind of
Speaker 1: what marijuna. Yeah, that's what you and your buddies called
Speaker 1: it in college when you were trying to you know,
Speaker 1: the down low. Anyway, m j X. The reason I
Speaker 1: think it's already got four hundred million, But this is
Speaker 1: just a hot area that could just explode. This could
Speaker 1: create shiny object if and when it's getting legalized. Well
Speaker 1: now it is what Jeff Sessions is on this. But
Speaker 1: you know, over time, if if pot ultimately just gets
Speaker 1: legalized in all these places, especially recreationally, I mean, I
Speaker 1: don't really see how money doesn't come into this and
Speaker 1: it become a big deal. Right now, it's struggled with performance,
Speaker 1: but four million out of the gate isn't bad. It's
Speaker 1: gonna track pot stocks and this is where you want
Speaker 1: an e t F. And I've had people ask me
Speaker 1: for pot e TF for a while because no one
Speaker 1: wants to pick a pot stock because they could go,
Speaker 1: you know, to blow up potentials high. So you have
Speaker 1: a diversified basket of pot stocks. They're all sort of
Speaker 1: young up and comers trying to make it in this
Speaker 1: new industry, and this one captures it. And I could
Speaker 1: see this being um big in the future, if, if,
Speaker 1: and when pot does ultimately become legal. So maybe that's
Speaker 1: a long term play. Kelly, that your last track? What
Speaker 1: do you? What do you put when you back when
Speaker 1: we made cassettes, we would try and end that cassette
Speaker 1: with a really great song. So I'm gonna give you
Speaker 1: a ticker that I would have swapped mind ticker good setup.
Speaker 1: Alright's LIT, which is the Global x Lithium and Battery
Speaker 1: Technology t F. It's a bit older it launched in
Speaker 1: but it's nearing a billion dollars in assets. Um I
Speaker 1: don't know. I mean, like we see global lithium miners
Speaker 1: and battery producers their their stocks soaring. Obviously there's rising
Speaker 1: demand for lithium because of electric vehicle makers like Tesla.
Speaker 1: I think it's gonna continue to be a good go
Speaker 1: to et F. I mean has that kind of commodity angle,
Speaker 1: it has that futuristic Tesla electric vehicle angle. It's a
Speaker 1: it's a good it's very specific, very specific. Okay, that's interesting.
Speaker 1: I would I would flip the cassette over to keep
Speaker 1: listening to her. I think, but we've come to the end. Eric,
Speaker 1: Do you have a closing thought that you want to
Speaker 1: talk about with these rising stars? Yeah, you know, just
Speaker 1: because they've gotten assets in the past and we're trying
Speaker 1: to identify swells before they become waves. It doesn't necessarily
Speaker 1: the performance is always a question mark, and we have
Speaker 1: to make that clear. Uh. And so I think typically
Speaker 1: the performance will get an investor's attention, but the question
Speaker 1: is do you really like the story because that you're
Speaker 1: gonna have to like the story because the performance is
Speaker 1: going to come and go. So I think that's where
Speaker 1: a bots gets a lot of help. And lithium is
Speaker 1: because people see the performance but they're like, actually, no,
Speaker 1: wonder it's out performing. I've heard a lot about electric cars.
Speaker 1: I've heard about a lot of robots. They buy into
Speaker 1: the story, and that's key because you're going to have
Speaker 1: to hang in there because these kind of some of
Speaker 1: these themes are difficult to do. But also really I
Speaker 1: think for investors out there, a lot of people now
Speaker 1: are changing their portfolios as they kick out active mutual funds.
Speaker 1: They're going real cheap core with real like you know,
Speaker 1: boring plain vanilla type e t F or index funds
Speaker 1: in the core keeping costs almost two nil. Then they're
Speaker 1: on the outside, they're playing with some hot sauce, and
Speaker 1: these are kind of I think some of the ones
Speaker 1: that you decorate the portfolio within small sauce, the new
Speaker 1: hot sauce. I'm not. I don't like hot sauce, butet
Speaker 1: you drop it all the time. I do because that
Speaker 1: that's I can only equate this too. Or you know,
Speaker 1: putting garlic on a dish, it's like something it's used
Speaker 1: in minor proportions to accent the DISHU truffle. It's a
Speaker 1: good one, all right, Carolina, thank you so much for
Speaker 1: joining us. Eric Balcinas, thank you, thank you. Okay, thanks
Speaker 1: for listening. Trillion Until next time, you can find us
Speaker 1: on Bloomberg terminal Bloomberg dot Com, Apple Podcasts, and a
Speaker 1: bunch of other places I haven't heard about yet. We'd
Speaker 1: love to hear from you. We're on Twitter, I'm at
Speaker 1: Joel Webber Show, He's at Eric Balcunas, and you can
Speaker 1: find Carolina Wilson at Caro E. Wilson. Trillions is produced
Speaker 1: by Magnus Hendrickson. Francesco Levi is the head of Bloomberg
Speaker 1: podcast Bye