WEBVTT - A Conversation With ETF Issuer Jan Van Eck 0:00:06.080 --> 0:00:12.520 Welcome to Trillions. I'm Joel Webber and I'm Eric bell Tunis. Eric, 0:00:12.560 --> 0:00:15.800 can you cut your own hair yet? No, it's just 0:00:16.440 --> 0:00:19.680 it's growing out. I haven't even I haven't shaved. I uh, 0:00:20.239 --> 0:00:22.320 I'm just going forward. I'm going for that look. Remember 0:00:22.320 --> 0:00:25.280 in the movie The Doors, Jim Morrison towards the end 0:00:25.840 --> 0:00:27.840 when he's got the pot belly and the long hair 0:00:27.920 --> 0:00:29.960 and the beard. That's that's sort of where I'm headed. 0:00:30.400 --> 0:00:35.000 So you're quitting yourself to Jim Morrison pretty much. Yeah, 0:00:35.159 --> 0:00:37.400 I feel I feel pretty clean though, and I feel 0:00:37.400 --> 0:00:40.199 pretty good, but I'm in the days. Jim Morrison is 0:00:40.240 --> 0:00:43.760 maybe not the one you want to go with. But otherwise, 0:00:43.800 --> 0:00:45.919 how are you holding up? I gotta be honest. Like 0:00:46.440 --> 0:00:48.920 we've gotten into bike riding. That seems to be like 0:00:48.960 --> 0:00:52.120 a nice way to social distance. If with my oldest son, 0:00:52.560 --> 0:00:55.040 you ride bikes and there's no cars, so you go 0:00:55.080 --> 0:00:57.360 in the middle of the road pretty much. Uh, these 0:00:57.400 --> 0:00:59.720 are small streets where the cars would be going fast anyway. 0:01:00.200 --> 0:01:02.000 If a car comes, you dive into the sidewalk, and 0:01:02.040 --> 0:01:03.680 then you see a person, you dive into the street. 0:01:04.000 --> 0:01:06.480 And we've had fun doing that all weekend, and so 0:01:06.520 --> 0:01:09.200 we're being creative in how to get out, but I'm 0:01:09.200 --> 0:01:11.200 getting a little cabin fever. I can't wait for things 0:01:11.240 --> 0:01:13.320 to open back up. How about you. I can't wait 0:01:13.360 --> 0:01:16.360 for you to buy me a sushi lunch at some point, 0:01:16.400 --> 0:01:19.560 and you know, maybe the summer. That sounds good. But hey, Eric, 0:01:19.560 --> 0:01:22.880 I'm really excited about today's guest. It's Jon Vanek of 0:01:23.200 --> 0:01:26.360 van Eck. What's been going on in his world? Well, 0:01:26.920 --> 0:01:29.959 Vanek has come up quite a bit, but also we've 0:01:29.959 --> 0:01:32.240 had an analyst and a reporter on the last two 0:01:32.240 --> 0:01:34.880 episodes since the crisis started and all the selling and everything, 0:01:35.480 --> 0:01:37.320 and you know, it's nice to have an issue where 0:01:37.319 --> 0:01:41.240 somebody who's on the front lines dealing with client inquiries 0:01:41.600 --> 0:01:45.200 trying to make sure the funds right run properly. Really 0:01:45.240 --> 0:01:47.840 just to get his perspective on that. Now, the bonuses 0:01:48.800 --> 0:01:52.360 Vaneck is UH has some ETFs that are just acutely 0:01:52.400 --> 0:01:54.560 connected to what we've been seeing with the FED and 0:01:54.600 --> 0:01:58.360 the discounts and UH in video games, UH those stocks 0:01:58.360 --> 0:01:59.560 have been doing great. They have a video game et 0:01:59.720 --> 0:02:01.760 We'll get to all of it. But so there's a 0:02:01.760 --> 0:02:04.080 couple levels of why I think he's the perfect guest 0:02:04.120 --> 0:02:13.280 for today, this time on trillions. Jan vneck Yahn, Welcome 0:02:13.320 --> 0:02:16.720 to trillions. Thanks so good to be here. So, like 0:02:16.880 --> 0:02:20.040 Eric said, here, we've talked to a reporter, uh, an analyst, 0:02:20.080 --> 0:02:22.000 but we haven't talked to somebody in your shoes on 0:02:22.040 --> 0:02:25.919 the issuer side. And especially with the FED becoming such 0:02:25.960 --> 0:02:28.600 a player in e t F s of late, really 0:02:28.800 --> 0:02:32.920 fascinated about your perspective on on that, Like, here's this 0:02:33.000 --> 0:02:36.280 whale coming into the market, um, and what's your perspective 0:02:36.280 --> 0:02:39.960 on that as an issue? Well, it's it's it was 0:02:40.040 --> 0:02:44.840 really shocking what happened Thursday before Easter, right, the huge 0:02:45.160 --> 0:02:48.160 announcement by the FED really rocked the credit markets, and 0:02:48.200 --> 0:02:52.120 you even saw some high LDTs trading at premiums to 0:02:52.240 --> 0:02:56.000 their prior day and n A v s. So the way, 0:02:56.040 --> 0:02:58.520 if you and I haven't read all the language, but 0:02:58.760 --> 0:03:01.200 if you look at what they're trying to accomplish, it's 0:03:01.240 --> 0:03:04.600 tilted towards investment grade and everything. But I was saying 0:03:04.639 --> 0:03:07.280 today earlier today, it's sort of like a really fat 0:03:07.360 --> 0:03:10.840 elephant trying to be super delicate and tiptoeing through the 0:03:10.880 --> 0:03:14.480 credit markets. It's would be surprising if it was done well. 0:03:15.040 --> 0:03:17.880 Let me ask you about this because the FED in 0:03:17.960 --> 0:03:21.000 their announcement we called the one in Marche the kitchen sink. 0:03:21.160 --> 0:03:23.679 That's when they went after investment grade corporates. You saw 0:03:23.800 --> 0:03:26.720 l q D take off. This next one we're just 0:03:26.960 --> 0:03:29.799 loosely referring to is the bathroom sinc. They're gonna try 0:03:29.800 --> 0:03:32.040 to make sure they catch the fallen angels. These are 0:03:32.080 --> 0:03:34.360 bonds that get downgraded from investment grade to high yield 0:03:34.360 --> 0:03:39.000 double bees. Now you have fun ang L. We Morgan 0:03:39.040 --> 0:03:42.000 Barnett and James on My team wrote this morning talking 0:03:42.000 --> 0:03:45.440 about how ang L is like a glass slipper. It's 0:03:45.480 --> 0:03:48.600 the perfect fit for what they're after. But it seems 0:03:48.640 --> 0:03:51.320 like they're gonna probably use h y G, which only 0:03:51.360 --> 0:03:55.720 has half double bees um and maybe that's not a 0:03:55.800 --> 0:03:58.120 perfect fit, but it's a bigger, more liquid one. What's 0:03:58.120 --> 0:04:00.560 your take on what they should do here in terms 0:04:00.600 --> 0:04:02.840 of any e t F they buy, the less the 0:04:02.880 --> 0:04:05.600 better as far as I'm concerned, I mean, I understand 0:04:05.840 --> 0:04:08.440 that half of the credit and our economy goes through 0:04:08.920 --> 0:04:12.160 bonds and not through the formal banking system, and that 0:04:12.240 --> 0:04:16.000 they that credit was falling apart, that system was falling apart, 0:04:16.520 --> 0:04:19.799 but really you know, we know that people are taking 0:04:19.920 --> 0:04:22.480 risk and making markets around our ets to make them 0:04:22.480 --> 0:04:25.160 function as well as they can for long term shareholders. 0:04:25.600 --> 0:04:27.440 You know, it doesn't take a lot of money. Even 0:04:27.760 --> 0:04:31.160 the fear of the FED coming in and knocking your 0:04:31.160 --> 0:04:34.760 positions out drove prices I think on last Thursday. So 0:04:35.400 --> 0:04:37.800 by far, the less the better. And if Angel is 0:04:37.839 --> 0:04:40.279 not part of their buying program, that's a positive as 0:04:40.320 --> 0:04:43.120 far as I'm concerned. And this isn't the first time, 0:04:43.200 --> 0:04:45.480 you know, a central bank has gotten involved with E 0:04:45.560 --> 0:04:48.039 t F And you know, look at Japan and and 0:04:48.440 --> 0:04:50.960 sort of the role the central bank has played there. 0:04:51.560 --> 0:04:54.440 What do you think the FED has learned from the 0:04:54.560 --> 0:04:57.840 Japanese experiment there well? And then this is the time 0:04:57.839 --> 0:05:01.599 of radical central bank intervention and where we haven't gone yet. 0:05:01.640 --> 0:05:03.760 I'm interested in what Eric's analogy is going to be 0:05:03.800 --> 0:05:05.960 is when they start buying equities or equity E t 0:05:06.200 --> 0:05:08.160 F s UM. I don't know if you've got a 0:05:08.200 --> 0:05:10.560 room left in the house for that, but uh, you know, 0:05:10.720 --> 0:05:14.120 I think I think we're pivoting more off of the 0:05:14.200 --> 0:05:18.520 O eight O nine experience where we realized that UM 0:05:18.600 --> 0:05:20.960 the government needed to come in to make sure that 0:05:20.960 --> 0:05:24.120 the pipes weren't clogged in terms of the flow of credit, 0:05:24.480 --> 0:05:26.960 that that was just going to kill the economy even further. 0:05:27.040 --> 0:05:28.880 And I think they were. They were right at a 0:05:28.960 --> 0:05:31.640 high level. And I think I'm not sure how much 0:05:31.680 --> 0:05:36.239 they're really buying into MMT and the experience of Japan 0:05:36.560 --> 0:05:39.520 UM in Europe. I hope not too much, because that 0:05:39.640 --> 0:05:43.760 really distorted asset prices. And one scenario that I'm not 0:05:43.800 --> 0:05:46.520 sure people are thinking about too much is what happened 0:05:46.520 --> 0:05:50.080 after O eight oh nine was a big asset melt up. Right. 0:05:50.120 --> 0:05:54.159 Can you imagine the economy running it's of capacity but 0:05:54.240 --> 0:05:57.520 asset prices exploding. I think that would have some some 0:05:57.640 --> 0:06:02.119 interesting political consequences. The e t F buying, it looks 0:06:02.160 --> 0:06:04.480 like it might be a couple of billion. You know, 0:06:04.920 --> 0:06:07.520 they could buy, say up to twenty six billion of 0:06:07.560 --> 0:06:11.640 bond ETFs if they do max out, but they probably won't. 0:06:12.240 --> 0:06:14.839 I think the real interesting thing here is I think 0:06:14.839 --> 0:06:16.600 the flows into l q D and h y G 0:06:17.560 --> 0:06:20.159 is probably front running just of the underlying bond buying. 0:06:20.839 --> 0:06:23.440 The other part I would I would also talk about 0:06:23.560 --> 0:06:26.960 is that when you talk about QUI. Back in the day, 0:06:27.120 --> 0:06:30.600 we used to think about how yes, they were buying bonds, 0:06:30.680 --> 0:06:33.599 but a lot of that pushed people to buy equities. 0:06:34.000 --> 0:06:37.400 It chased them into risk. So in a way they 0:06:37.440 --> 0:06:41.640 were involved with that indirectly. Japan just went right, just 0:06:41.680 --> 0:06:44.200 went right to the equities. And you know, we do 0:06:44.360 --> 0:06:46.719 look at Bank of Japan and we wrote a piece 0:06:47.000 --> 0:06:50.880 last time. They actually became smart beta designers. They actually 0:06:50.880 --> 0:06:53.960 asked a couple issuers there to design indexes and e 0:06:54.080 --> 0:06:57.800 t f s that waited the stocks to capex and 0:06:57.880 --> 0:07:00.839 who paid workers. Well, that way, they just weren't buying 0:07:00.839 --> 0:07:04.160 companies doing buybacks. So they got that into it. And 0:07:04.400 --> 0:07:06.600 that's not a horrible idea if you're looking to get 0:07:06.640 --> 0:07:09.840 the money to the right place. That isn't the worst 0:07:09.840 --> 0:07:12.600 thing is to make e t f s that hold 0:07:12.680 --> 0:07:16.040 stocks that reward doing capex and uh, you know, paying 0:07:16.040 --> 0:07:19.760 employees higher wage. That's sort of what they're they've gotten into. 0:07:19.800 --> 0:07:21.400 But there that's a whole another level. I don't think 0:07:21.400 --> 0:07:24.360 the Fed's gonna do that anytime soon, John, I also 0:07:24.400 --> 0:07:26.280 wanted to ask you another elephant in the room is 0:07:26.320 --> 0:07:29.240 the whole black Rock scenario here where black Rock is 0:07:29.280 --> 0:07:33.120 basically the Fed's preferred partner and all of this um, 0:07:33.160 --> 0:07:35.280 you're you're an issuer as well. What what's your read 0:07:35.280 --> 0:07:39.240 of that? Well, I guess, uh, you know, look, they're 0:07:39.280 --> 0:07:42.960 supremely qualified with their risk systems and their presence in 0:07:43.000 --> 0:07:46.800 the markets to execute this buying program. But I certainly 0:07:46.800 --> 0:07:49.760 hope it's it's well supervised. And as I said before, 0:07:49.800 --> 0:07:52.440 going back to the elephant, the less they do the better, 0:07:52.880 --> 0:07:55.480 especially in the E T F markets where you know, 0:07:55.520 --> 0:07:59.480 our ecosystem with market makers and and everyone has risk 0:07:59.600 --> 0:08:03.200 on so whatever the FED does, they're hurting someone, if 0:08:03.200 --> 0:08:05.320 you want to look at it that way. So I 0:08:05.640 --> 0:08:09.800 think probably I'd rather have more of black rocks activity 0:08:09.880 --> 0:08:13.960 towards the underlying markets where they feel there's breakage, rather 0:08:14.040 --> 0:08:17.040 than messing with the e t s, which you know 0:08:17.080 --> 0:08:19.760 they're they're big, they're perceived to be liquid, but we're 0:08:19.800 --> 0:08:22.320 still a fraction of the size of the mutual funds. 0:08:22.840 --> 0:08:25.680 And you know, we haven't gotten to the whole outflow 0:08:25.840 --> 0:08:30.200 story of munis and other asset classes, but a lot 0:08:30.240 --> 0:08:33.600 of that was driven by mutual funds as well. You 0:08:33.679 --> 0:08:37.080 just mentioned the word MUNI. Now, during the worst of 0:08:37.160 --> 0:08:39.959 the sell off a couple of weeks ago, it drove 0:08:40.040 --> 0:08:43.240 dislocations in bond e t F s. That means their 0:08:43.240 --> 0:08:45.720 price was trading below their n A V. To me, 0:08:45.840 --> 0:08:49.319 that's a measure of the liquidity of the underlying Otherwise 0:08:49.320 --> 0:08:52.719 that would be armed away. Now h y D which 0:08:52.800 --> 0:08:55.240 is the high old MUNI that's your fund. It wasn't 0:08:55.240 --> 0:08:57.760 the biggest discount, but it was close to it. I 0:08:57.800 --> 0:09:01.520 think at one point it was like day after day 0:09:01.800 --> 0:09:06.719 went is high or low as now it's three post 0:09:06.800 --> 0:09:10.559 fed Kitchen Sinc. Bathroom Sinc. Walk us through what it's 0:09:10.600 --> 0:09:12.640 like to be the issuer of a product going through 0:09:12.679 --> 0:09:17.040 something like that. Well, the primary mechanism for closing that 0:09:17.120 --> 0:09:20.880 gap is the market makers, right because theoretically they have 0:09:20.960 --> 0:09:23.120 the opportunity to buy the e t F at a 0:09:23.240 --> 0:09:27.160 price that's below what they can redeem those shares for 0:09:27.440 --> 0:09:31.480 from the fund at the underlying nav. So job one, 0:09:31.600 --> 0:09:33.680 two and three was pretty much to work with the 0:09:33.760 --> 0:09:37.320 market makers as much as possible. One way we did 0:09:37.360 --> 0:09:40.080 that was to speed up our adoption of the e 0:09:40.160 --> 0:09:42.720 t F rule, which allows for custom baskets, which is 0:09:42.720 --> 0:09:45.000 not sort of a full capability that we had. We 0:09:45.080 --> 0:09:47.679 did that, um, you know, kind of very early on 0:09:47.720 --> 0:09:50.160 into the crisis, and then there was a lot of 0:09:50.440 --> 0:09:53.679 as you can imagine, communications with clients because a lot 0:09:53.679 --> 0:09:56.520 of people didn't understand what's going on. But I really 0:09:56.520 --> 0:09:58.280 think a lot of this had to do with the 0:09:58.320 --> 0:10:02.000 whole selling of munis in general. All Right, prices widened 0:10:02.559 --> 0:10:05.679 and the market makers were just not comfortable whether they 0:10:05.679 --> 0:10:08.040 could sell the bonds if they got delivered from the 0:10:08.040 --> 0:10:17.000 E t F and at what price? Okay? So yeah, 0:10:17.000 --> 0:10:19.160 and I also want to talk about gaming. Are you? 0:10:19.200 --> 0:10:21.200 Are you a pretty hardcore gamer, because I mean you 0:10:21.240 --> 0:10:24.160 have a an E Sports ETF ticker e s P. 0:10:24.320 --> 0:10:28.319 Oh yeah no, but I can tell you the PlayStation 0:10:28.400 --> 0:10:32.440 in my basement's getting overheating these days. I've got I've 0:10:32.480 --> 0:10:35.880 got three boys at home and even my oldest too, 0:10:35.960 --> 0:10:40.560 as a job is now reverted back to eleventh grade. 0:10:40.640 --> 0:10:44.200 I think, so have I. We have an Attendo switch 0:10:44.280 --> 0:10:48.319 and I've gotten addicted to this Turbo football game. Um, 0:10:48.360 --> 0:10:50.920 and I've started playing a season. Yeah it's getting um 0:10:50.920 --> 0:10:54.360 but anyway, UM, I have a on I fell asleep. 0:10:54.360 --> 0:10:56.120 I took a nap the other day and I woke 0:10:56.200 --> 0:10:58.360 up with a note on my chest. Asked my son 0:10:58.400 --> 0:11:01.080 asking me to log in to my computer so he 0:11:01.080 --> 0:11:05.240 could play Roadblocks because mommy took the iPad. And this 0:11:05.320 --> 0:11:07.680 is why I tend to cover the video game ETFs 0:11:07.720 --> 0:11:10.719 a lot, because I can see the demand firsthand. If 0:11:10.760 --> 0:11:12.839 you look at your to date, esp O is up 0:11:12.880 --> 0:11:16.679 five the markets down and during March when the sell 0:11:16.720 --> 0:11:20.880 off was the worst Spy was down, ESPO was down 0:11:20.920 --> 0:11:24.280 ten percent. Only talk about what's going on there? Is 0:11:24.320 --> 0:11:29.640 this just people seeing the demand for these UH stocks 0:11:30.440 --> 0:11:32.439 when you have a quarantine or is this much more 0:11:32.440 --> 0:11:37.120 of a maybe more future demand kind of buying. Well, 0:11:37.200 --> 0:11:39.679 I think we try to offer et f that are 0:11:39.720 --> 0:11:42.959 more longer term trends than just a fad UM. So 0:11:43.160 --> 0:11:47.840 you know, actually last year Eric also had really strong outperformance. 0:11:48.240 --> 0:11:52.800 It's sort of an aggressive growth type of UH E 0:11:52.880 --> 0:11:55.360 t F I would call it. And it's really work 0:11:55.360 --> 0:11:58.040 at work at home e t F. I mean, it's 0:11:58.240 --> 0:12:00.559 it's sort of like zoom stock right, is sort of 0:12:00.559 --> 0:12:04.880 a direct play on people entertaining themselves at home when 0:12:04.920 --> 0:12:07.480 they're stuck and they can't move UM. And the numbers 0:12:07.480 --> 0:12:11.439 are astonishing. I mean one of the Asian listed or 0:12:11.559 --> 0:12:16.520 Singapore based companies has seventy million UH players a day 0:12:16.559 --> 0:12:19.880 logging in from different places in in in Asia and 0:12:19.920 --> 0:12:23.520 that's just Asia. So it's it's really it's really an 0:12:23.520 --> 0:12:27.600 amazing phenomenon. We think it will continue. I think it 0:12:27.640 --> 0:12:30.520 could morph. My my kind of point is this kind 0:12:30.559 --> 0:12:34.000 of entertainment can morph into more customer interaction. You know, 0:12:34.040 --> 0:12:36.920 you're playing kind of static game. But what happens when 0:12:37.400 --> 0:12:40.200 the audience can affect the players in a game? In 0:12:40.280 --> 0:12:44.959 real sports and real sports, people get involved virtual reality. 0:12:45.000 --> 0:12:47.040 There's lots of ways that can evolve in a very 0:12:47.040 --> 0:12:50.240 interesting way. I think my nine year old would much 0:12:50.360 --> 0:12:54.040 rather watch somebody play a video game on YouTube then 0:12:54.160 --> 0:12:58.080 watch sports real sports with me. So this, in a way, 0:12:58.200 --> 0:13:02.600 this event just cceleerates an existing trend, right, it doesn't 0:13:02.640 --> 0:13:06.120 it doesn't necessarily shift the demand function, but definitely it 0:13:06.160 --> 0:13:09.440 will be here in a bigger way after this. The 0:13:09.520 --> 0:13:11.800 thing about s p O is and all the video 0:13:11.800 --> 0:13:13.520 game et s, I think there's four or five of 0:13:13.520 --> 0:13:16.040 them at this point. Um, the you know, the returns 0:13:16.040 --> 0:13:18.240 have been great. If if es p O was an 0:13:18.280 --> 0:13:20.640 active manager, it would be a feature story in Forbes 0:13:21.120 --> 0:13:23.320 because they're doing so much better than the market. Right, 0:13:23.679 --> 0:13:25.480 But it's got a hundred and thirty three million. To me, 0:13:25.600 --> 0:13:30.640 this is a little light considering the outperformance in both 0:13:30.800 --> 0:13:33.920 up and down market, what do you equate this to. 0:13:34.360 --> 0:13:38.400 My theory is advisors are hesitant to put something called 0:13:38.640 --> 0:13:41.440 e sports or video games on a client's statement, and 0:13:41.480 --> 0:13:45.720 there's just a perception barrier because robotics and cybersecurity would 0:13:45.760 --> 0:13:48.439 clean up if they were posted in this kind of performance. 0:13:49.559 --> 0:13:53.320 I kind of agree with you, um that the asset 0:13:53.320 --> 0:13:55.120 growth is a little bit less than what I would 0:13:55.120 --> 0:13:58.040 have hoped for given the performance. But I think it's 0:13:58.080 --> 0:14:01.440 just a conversation people love to have with their clients. 0:14:01.760 --> 0:14:04.240 So I don't think it's the this. You know, they're 0:14:04.280 --> 0:14:07.040 not scared to see it on their statements. Uh, it's 0:14:07.080 --> 0:14:11.040 a very visible trend there. There people playing this in basements, 0:14:11.040 --> 0:14:14.240 they're playing it in malls. Um, you know, family members 0:14:14.240 --> 0:14:18.640 are involved. So I it's kind of cutting edge in 0:14:18.640 --> 0:14:21.080 a way. I just don't You're right, it hasn't quite 0:14:21.200 --> 0:14:24.520 broken through, but I think it could very well this year. 0:14:25.200 --> 0:14:29.520 So yeah, how do you distinguish your product from the 0:14:29.560 --> 0:14:32.760 other products that are there? Um? You know, the main 0:14:32.880 --> 0:14:35.080 thing that we like to say that we have in 0:14:35.120 --> 0:14:38.640 our thematic ets is pure play, so that they're really 0:14:38.640 --> 0:14:42.200 trying to get a majority of their revenue from the 0:14:43.280 --> 0:14:46.200 essence of what we're trying to capture. So we we 0:14:46.280 --> 0:14:49.440 do have some bigger companies in there, but we cap them. 0:14:49.520 --> 0:14:51.680 And then if you look at the portfolio as a whole, 0:14:51.880 --> 0:14:54.800 and it reflects a lot of Asian names, and that's 0:14:54.840 --> 0:14:58.600 really where there is a very big phenomenon. So uh, 0:14:58.720 --> 0:15:00.920 you know, when I think we were the second or 0:15:00.960 --> 0:15:03.240 so ish to come out that the first one was 0:15:03.280 --> 0:15:06.280 just video games, this was more, uh some of the 0:15:06.320 --> 0:15:10.400 gaming and online sports aspect of it. So that's uh, 0:15:10.520 --> 0:15:12.800 that's really how we would focus our you know, that's 0:15:12.840 --> 0:15:17.040 what we did. We follow our regular rules for pure play. Um, 0:15:17.040 --> 0:15:19.200 oh kay, let's change it. We'll stick with equities. But 0:15:19.240 --> 0:15:21.520 I want to change the topic to something that was 0:15:21.600 --> 0:15:24.320 put to put on the back burner for the last month, 0:15:24.440 --> 0:15:26.480 but was on the front burner for like six months prior, 0:15:26.480 --> 0:15:29.200 which is E s G. Um. It's probably gonna come 0:15:29.280 --> 0:15:31.080 up again as soon as the market I've already seen 0:15:31.560 --> 0:15:34.440 bubbling of like E s G debate coming back. You're 0:15:34.480 --> 0:15:37.160 interesting to me because you have this e t F 0:15:37.240 --> 0:15:40.600 that's low carbon energy smog is the ticker. You also 0:15:40.640 --> 0:15:43.880 have a green bond ETF, but you also are the 0:15:43.920 --> 0:15:47.280 issuer of k o L, which is the coal E 0:15:47.440 --> 0:15:51.200 t F, And personally, I kind of dig uh the 0:15:51.360 --> 0:15:53.840 sort of look, I'm just trying to serve the people, 0:15:53.880 --> 0:15:58.080 whatever your take is. But is that by design or 0:15:58.120 --> 0:16:01.440 by accident? Can you explain, sir, having up those two 0:16:01.520 --> 0:16:06.160 different sides of the coin. Um, well, they're a little irreconcilable, 0:16:06.280 --> 0:16:08.040 I guess if you want to look at it that way, 0:16:08.080 --> 0:16:10.880 So I'll grant that up front. Um, you know, ko 0:16:11.080 --> 0:16:14.200 L was from our first era of ETS, a long 0:16:14.240 --> 0:16:16.280 time ago, when we were just trying to capture pure 0:16:16.320 --> 0:16:20.920 play and people hadn't broken up the resources world in 0:16:21.040 --> 0:16:25.280 ways that made sense, so um, lots of mining things 0:16:25.320 --> 0:16:28.080 where everything was just thrown together. So we stripped aside 0:16:28.120 --> 0:16:31.640 agriculture shares like MoU and KOL was one of them. 0:16:31.680 --> 0:16:34.200 It's it's barely an E t F anymore. I think 0:16:34.240 --> 0:16:38.080 it's thirty million last I looked, And you know, we've considered, 0:16:38.320 --> 0:16:40.720 uh um, you know, thought about what to do with 0:16:40.760 --> 0:16:44.760 it in light of changing customer demands. But you know, 0:16:45.080 --> 0:16:48.320 you may know we're also an active money manager. We 0:16:48.360 --> 0:16:51.680 have actively managed funds, and I think there's been a 0:16:51.680 --> 0:16:53.960 lot of good thinking about E s G. But we 0:16:54.080 --> 0:16:57.040 certainly spent a lot of time on it, and I 0:16:57.040 --> 0:16:59.200 would just point out I think I think we're on 0:16:59.240 --> 0:17:01.680 the same page year that E s G one Dotto 0:17:02.480 --> 0:17:05.399 and the for Active Managers was making sure that they 0:17:05.440 --> 0:17:08.760 took more of a three degree look at the different 0:17:08.840 --> 0:17:12.280 kind of risks that their companies could have. Environmental and 0:17:12.320 --> 0:17:14.680 social governance was always a part of what they did, 0:17:15.320 --> 0:17:18.560 and um, I think now putting them into index funds 0:17:18.600 --> 0:17:22.040 is a strain and there's a lot of trade offs 0:17:22.119 --> 0:17:24.200 that need to be made. So we think the pure 0:17:24.240 --> 0:17:29.960 play on environmental is something that we can execute on now. John, 0:17:30.000 --> 0:17:31.960 I also want to just ask you, as we sort 0:17:32.000 --> 0:17:34.200 of come to an end here, what do you feel 0:17:34.240 --> 0:17:38.520 like the E t F world isn't talking enough about that? 0:17:39.200 --> 0:17:41.800 You know, when we get through this moment, we should 0:17:41.800 --> 0:17:45.880 spend more time talking about Well, I don't know, it's 0:17:45.920 --> 0:17:50.720 certainly mentioned, but it's an incredibly concentrated industry and the 0:17:50.840 --> 0:17:55.760 big shareholders really own a lot of corporate America, and 0:17:56.160 --> 0:17:58.679 you know that's sort of been talked about without a 0:17:58.720 --> 0:18:01.520 lot of suggestions. You know, Jack Bogo wrote about it 0:18:01.560 --> 0:18:03.960 in the last PC did for the Wall Street Journal 0:18:03.960 --> 0:18:07.560 before he passed away. So I think that's that's a 0:18:07.560 --> 0:18:10.199 big reality, and black Rock doing the buying for the 0:18:10.400 --> 0:18:13.760 Treasury and the Fed is just going to be, you know, 0:18:13.920 --> 0:18:17.240 another another thing to talk about in that vein, but 0:18:17.359 --> 0:18:19.000 not much we can do about it, I guess as 0:18:19.000 --> 0:18:20.920 an independent issue or just kind of make it work 0:18:20.920 --> 0:18:24.119 it through Yahn. We got to ask about Bitcoin. I know, 0:18:24.240 --> 0:18:25.880 that's another one of these issues that kind of went 0:18:25.920 --> 0:18:27.800 to the backburner a little bit when when the vix 0:18:27.920 --> 0:18:30.040 is up, a lot of this stuff just goes away 0:18:30.080 --> 0:18:32.919 for a while. But it's gonna come back. Bitcoin and 0:18:32.920 --> 0:18:35.760 whether it will be an e t F Tyler Winklevoss 0:18:35.920 --> 0:18:39.399 tweeted out on the tenth April the launch of the 0:18:39.440 --> 0:18:42.680 Bitcoin fund on the Toronto Stock Exchange was one of 0:18:42.720 --> 0:18:45.560 the best clothes and fund launches in Canada's history. So 0:18:46.160 --> 0:18:47.800 it's a closed the funness on an e t F, 0:18:47.920 --> 0:18:51.960 but it's similar. I mean those aren't too far apart there, 0:18:52.000 --> 0:18:55.880 you know, close in the genre, right. What's your take on, 0:18:56.119 --> 0:18:58.600 you know, whether we could see a Bitcoin ETF here, 0:18:59.440 --> 0:19:02.640 whether you know the sec is you know softening at all. 0:19:02.920 --> 0:19:05.000 I know Matt Hogan over a bit wise has been 0:19:05.000 --> 0:19:07.640 working over time to try to get them to um, 0:19:07.720 --> 0:19:09.800 you know, change their view on it and look at 0:19:09.800 --> 0:19:11.720 it as a good thing. There's a couple o t 0:19:11.880 --> 0:19:15.159 C products in the US that are private trusts and 0:19:15.200 --> 0:19:19.600 they trade it, you know, anything from fift premiums, and 0:19:19.640 --> 0:19:21.400 a lot of people can say, well, you know this, 0:19:21.920 --> 0:19:23.560 a bitcoin e t F would trade it maybe a 0:19:23.560 --> 0:19:26.880 one percent premium at that, maybe even lower. Why wouldn't 0:19:26.880 --> 0:19:29.680 they allow it if these other products are out there 0:19:30.240 --> 0:19:33.880 and you act actually get hurt buying at a high 0:19:33.880 --> 0:19:38.360 premium and lose money even if bitcoin went up. Yeah. Look, 0:19:38.359 --> 0:19:39.960 I mean you know that we've been trying to get 0:19:40.080 --> 0:19:43.280 our own bitcoin et F approved for several years now. 0:19:43.640 --> 0:19:49.719 There's no real legal or uh you know, investment reason 0:19:49.800 --> 0:19:53.320 to not allow a product like that. And as this 0:19:53.400 --> 0:19:56.240 episode has reminded us in the markets, you don't need 0:19:56.320 --> 0:19:59.240 to have bitcoin to have volatility. And I think the 0:19:59.320 --> 0:20:03.080 e t F would just add to UM the ecosystem 0:20:03.119 --> 0:20:05.960 for for uh you know, bitcoin e t F would 0:20:05.960 --> 0:20:08.680 add to the ecosystem of that investment class. I will 0:20:08.720 --> 0:20:12.480 point out that, you know, gold, this has been a 0:20:12.520 --> 0:20:16.679 time when central banks are going so nuts that appetite 0:20:16.680 --> 0:20:19.199 for gold and and bitcoin goes up. And actually the 0:20:19.200 --> 0:20:24.240 correlation between bitcoin and gold bullion has gone from about 0:20:24.440 --> 0:20:28.320 zero before this year to something like a point five 0:20:28.320 --> 0:20:31.840 correlation this year, which is actually super interesting. I would 0:20:31.840 --> 0:20:35.679 say so far both have been uh you know, working 0:20:35.680 --> 0:20:38.920 independently of the overall markets, but they haven't broken through. 0:20:39.440 --> 0:20:42.879 And what's amazing is just investor appetite in the traditional 0:20:42.960 --> 0:20:46.920 world is I think not as big for bitcoin as 0:20:46.960 --> 0:20:49.800 people might imagine. I could be wrong, but I don't 0:20:49.840 --> 0:20:53.720 think it's necessarily an instant billion dollar e t F eric. Yeah, 0:20:53.720 --> 0:20:56.520 and I don't think it's gonna take over Middle America 0:20:56.680 --> 0:20:58.720 with Grandma was losing all that. I think people will 0:20:58.720 --> 0:21:00.960 see a bitcoin and on the name, and it will 0:21:01.000 --> 0:21:03.760 track the people who seek it out. Yeah, I see it. 0:21:03.840 --> 0:21:07.399 Maybe the whole category a couple of billion. This is 0:21:07.440 --> 0:21:10.040 me using the ones in Sweden and Switzerland. They haven't 0:21:10.040 --> 0:21:12.719 exactly let the world on fire and all of Europe 0:21:12.720 --> 0:21:16.320 gets there and wealthy people here could buy them. So um, yeah, 0:21:16.359 --> 0:21:18.840 I'm with you. I think it would find the right audience, 0:21:19.320 --> 0:21:22.600 people who I don't know. I I'm very I think 0:21:22.640 --> 0:21:25.560 it's e t F S gives something the best possible 0:21:25.560 --> 0:21:28.240 shot at a good deal because of that arbitrage mechanism, 0:21:28.280 --> 0:21:30.280 which you don't get in the OTC product or closed 0:21:30.280 --> 0:21:34.040 and fund agree, Yahn, do you have a would you 0:21:34.040 --> 0:21:37.760