Speaker 1: Woking our trillions.
Speaker 2: I'm Joel Webber and I'm Eric Belchunis.
Speaker 1: Eric. One thing that you and I both love this
Speaker 1: time of year is doing a Halloween themed episode. We've
Speaker 1: done like ETF graveyards before, but then we started kicking
Speaker 1: this idea around and you had maybe the best one yet.
Speaker 3: Yeah, so we have this phrase.
Speaker 2: We use the team called the Lazarus List, which is
Speaker 2: obviously the guy in the Bible who Jesus resurrected, and
Speaker 2: this is could We argued we could have done this
Speaker 2: on Easter, but because it does involve ETFs that have
Speaker 2: been deceased. And then somebody else comes along and says, hey,
Speaker 2: I think I can make this work. Even though it
Speaker 2: failed for this issuer, somebody tries it again and they
Speaker 2: sort of resurrect the idea put it back in the market.
Speaker 2: There's even been cases where it's been tried two or
Speaker 2: three times and every now and then and it's like
Speaker 2: the third Times of Charm situation.
Speaker 1: At first if you don't succeed, dry again.
Speaker 2: Yeah, And so we just kind of find this a
Speaker 2: quirky little wing of the ETF world when people look
Speaker 2: at something that didn't work and have the I guess
Speaker 2: vision or gumption to think I can make this work.
Speaker 1: To walk us through this version of the ETF graveyard,
Speaker 1: We're going to be joined by Bloomberg Intelligence ETF analysts
Speaker 1: Sarah Vegas, this time on trillions. The Lazarus List, Athanasios,
Speaker 1: Welcome back to Trillians.
Speaker 4: Glad to be back.
Speaker 1: Okay, so you have put together a little bit of
Speaker 1: a list. These ETFs were ones that died went to
Speaker 1: the ETF graveyard, only they weren't dead yet.
Speaker 4: No, And I think that speaks to where we are
Speaker 4: in the ETF market.
Speaker 2: Right.
Speaker 1: There's there's a good idea out there, and it maybe
Speaker 1: really was a good idea. Maybe maybe the timing wasn't
Speaker 1: quite right.
Speaker 4: Yeah, exactly, and we're back to like recycling ideas. Right,
Speaker 4: a lot of stuff's been tested that they're like, hey,
Speaker 4: you know what, this may be closed too soon, or
Speaker 4: you know, we maybe could give it another shot or
Speaker 4: rebrand it through a different you know, or maybe.
Speaker 1: Or maybe it really wasn't meant to live, right, So yeah,
Speaker 1: I mean that's be fair point.
Speaker 4: Maybe these might close again. If you close twice, that's
Speaker 4: a tough pill to swallow, I think, right, if you
Speaker 4: try two times.
Speaker 1: Okay, so what's the first one that you think embodies
Speaker 1: this idea.
Speaker 4: Let's start with probably something most recently. I Shares brought
Speaker 4: back these target date ETFs. They tried this I think
Speaker 4: it was twenty fourteen. So basically what this does is
Speaker 4: like their asset allocation ETF, they hold a little bit
Speaker 4: of everything, stocks, bonds. It's made to just be a
Speaker 4: one stop shop. Hey, Eric, what it's one of the
Speaker 4: tickers for this.
Speaker 2: So one of them, jol is it D This is
Speaker 2: the I Shares life path target date twenty four five
Speaker 2: twenty forty five ETF. So the twenty forty five would
Speaker 2: be the year that you're supposed to retire, So as
Speaker 2: a gener exer like myself, that would be where I'm
Speaker 2: aiming for. Hopefully all will be retired even before then
Speaker 2: if I'm lucky.
Speaker 3: But this is designed to.
Speaker 2: Be in all equities early on and then slowly shift
Speaker 2: to some portion of fixed income. I believe right now
Speaker 2: this one is I want to say, eighty five to
Speaker 2: ninety percent equity still and forty percent is international.
Speaker 3: So look, this is like.
Speaker 2: You've actually brought this up in occasional episodes. You're like,
Speaker 2: why isn't there an ETF that just does everything. Well,
Speaker 2: this is kind of it. It uses other I shares
Speaker 2: ETFs to give you, like what would be a complete
Speaker 2: portfolio that an advisor would set up with you using
Speaker 2: many puzzle pieces. This one does it in one shot
Speaker 2: and it moves as you get closer to retirement. So
Speaker 2: these are very popular in four to one K plans,
Speaker 2: but they failed almost all the time in the ETF
Speaker 2: world because again, advisors are the main customers of ETFs,
Speaker 2: and advisors, to quote George W. Bush, want to be
Speaker 2: the deciders. They want to pick which funds you go into.
Speaker 2: They can't have one fund and show the client that
Speaker 2: you're in one ticker and the tick clients, why do
Speaker 2: I need you? And so this is why this idea
Speaker 2: has failed in the past, but I shares resurrecting it
Speaker 2: is interesting, but that's what these ETFs are. There's I
Speaker 2: think six to eight of them for the different retirement years.
Speaker 1: So they bit the dust. What happened?
Speaker 4: It's a fair question. I think they were a little
Speaker 4: ahead of their time. Remember like twenty fourteen ETFs weren't
Speaker 4: you know all the rage that they are now and
Speaker 4: they've been they're really trying to go after like clients
Speaker 4: that don't have four to one K plans, because these
Speaker 4: are pretty popular options in those kind of instructures. So
Speaker 4: I think the market is a much more mature place,
Speaker 4: people more comfortable with ETFs. Again to xpoint, I don't
Speaker 4: know if they're gonna have a ton of success, but
Speaker 4: I think they might have a better go at it
Speaker 4: than they did in twenty fourteen.
Speaker 2: Yeah, and we had Blackrock on ETFIQ on a recent
Speaker 2: show to talk about these, and they were saying that
Speaker 2: the reason they're doing this isn't to hit advisors or
Speaker 2: the four to one k market, but to go after
Speaker 2: the fifty percent of people who do not have exposure
Speaker 2: to equities. They feel like this is a very easy
Speaker 2: way to reach them, and they're trying to do a
Speaker 2: little bit of God's work here, Joel, to try to
Speaker 2: get those people invested. And I would say this is
Speaker 2: not being take advantage of. Honestly, there's so many things
Speaker 2: you can invest in if you don't know a lot
Speaker 2: about investments that are like bad, but this is like
Speaker 2: these charge eleven basis points and they're in very solid
Speaker 2: I shares ETFs. They usually pick the cheaper ones. It
Speaker 2: makes sense Honestly, Joel, if the government really wanted to
Speaker 2: clear the wealth gap, they would actually put every person
Speaker 2: in one of these when they are born and then
Speaker 2: make them, like, you know, pass some financial literacy tests
Speaker 2: and then you get the account when you're eighteen or
Speaker 2: something like that. Not saying to put them all in
Speaker 2: black rock, but something like this would make a lot
Speaker 2: of sense as something you get when you're born, versus
Speaker 2: say a social security system. So I think these are
Speaker 2: interesting in that regard, in that they are going after
Speaker 2: the fifty percent that don't have any exposure to the markets.
Speaker 1: Okay, Athanasios, give me one that surprised you.
Speaker 4: Another pretty recent one, luxury goods. This has been tried
Speaker 4: in the past. I think it was Roundhill that just
Speaker 4: brought it back. And if you look at the performance
Speaker 4: of luxury goods, it's really it's done like phenomenal. And
Speaker 4: I think it was rich people like to buy fancy
Speaker 4: stuff and it seems pretty it doesn't get impacted by
Speaker 4: the economy, right.
Speaker 1: Like recession proof everything.
Speaker 4: Yeah, and I think it was Louis Vaton was at
Speaker 4: one point like hit the highest market cap ever for
Speaker 4: European company, So that one's an interesting idea. It might
Speaker 4: be too niche I think for it to get quite
Speaker 4: a bit of assets, but the performance is really strong.
Speaker 4: If there's one area outside the US. You know, we
Speaker 4: tend to be very US focused. This one seemed to
Speaker 4: do pretty well. I don't know if the performance will
Speaker 4: be enough to get people enticed to invest in it,
Speaker 4: but I think it's a pretty interesting idea that gets overlooked.
Speaker 1: Eric, what's the ticker on?
Speaker 2: So there's actually two. There's l u X and l
Speaker 2: u x X, So two people have tried to resurrect this.
Speaker 2: They're both in the market, both not that big. I'll
Speaker 2: give you some of the holding's stroll. I mean, these
Speaker 2: are some of your favorite brands, Hermes ferrari A mens
Speaker 2: eric a me is it? Yeah? No, I'm from the
Speaker 2: other side of the tracks for sure. S They Lauder Royal,
Speaker 2: Caribbean Cruises, Las Vegas, Sands, Williams and Sonoma, Toll Brothers.
Speaker 3: That's interesting.
Speaker 2: That's like a home builders, Win Resorts, Hennessy, Louis Vatan.
Speaker 3: So yeah, I mean you read through these names.
Speaker 1: How does that compare with the other one?
Speaker 2: Very similar, These have a lot of overlap. The one
Speaker 2: difference is l U X. The one with only one
Speaker 2: X is more concentrated, so it should have more volatility,
Speaker 2: which can be good and bad. LUXX has more holdings,
Speaker 2: and if you look at the assets, both are under
Speaker 2: ten million, which is you know, borderline life support area.
Speaker 2: So I don't know if they've really been able to
Speaker 2: resurrect this successfully. These two could end up right back
Speaker 2: in the same place if I'm being honest.
Speaker 1: Okay, we talked about some ones that have had some
Speaker 1: difficulties walking through the graveyard, where there's maybe one that
Speaker 1: hasn't had such a hard time.
Speaker 4: This would be one of the darlings of COVID during
Speaker 4: that time. And its jets.
Speaker 1: Yeah, I remember this one.
Speaker 4: Yeah, the airline ETF. It's been tried, like I think
Speaker 4: two issuers had an airline ETF direction and Googenheim was it,
Speaker 4: and now this is US Global Investors brought that back
Speaker 4: and it's one of the at one point is like
Speaker 4: one of the one of the fastest growing ETFs. You know,
Speaker 4: it was during COVID when airlines stopped and the trade
Speaker 4: started coming back and everyone started plying back into jets
Speaker 4: hit a couple of billion I think at one point.
Speaker 4: But that's one that had been resurrected and had done
Speaker 4: quite well in its second life.
Speaker 2: Yeah, Joel, there were two airlines ETF FAA, which had
Speaker 2: twenty million dollars and closed, and then fliy X, which
Speaker 2: had two million in closed. So both of those were
Speaker 2: in like the twenty ten to twenty fifteen era. And
Speaker 2: then jets launches about seven years ago and it does
Speaker 2: nothing for three or four years. It looks like the
Speaker 2: luxury ETFs where there's like, oh my god, this is
Speaker 2: going to go down, and then bam the pandemic ironically
Speaker 2: because again who's flying during the pandemic. But the pandemic
Speaker 2: really got this thing going, you know. Funny story. We
Speaker 2: had the guy from Jets on ETFIQ the first iteration
Speaker 2: of the show, and it was the last show before
Speaker 2: they we went dark because of the COVID. And then
Speaker 2: we had the Jets guy talking and I remember going
Speaker 2: over the price to earnings ratio and I was like,
Speaker 2: I just ran the numbers and besides Nigeria, your ETF
Speaker 2: has the lowest price to earnings ratio. I think it
Speaker 2: was like four, which is really low. I mean the
Speaker 2: S and p's like twenty something. So and he was
Speaker 2: making the case for it, and we were kind of
Speaker 2: prescient because right after that, jets went up and now
Speaker 2: one point three billion. It charges sixty basis points, So
Speaker 2: they certainly are making a very profitable ETF here, even
Speaker 2: if it has come down a little bit from that,
Speaker 2: you know, sort of peaked during the pandemic.
Speaker 1: Found its moment.
Speaker 4: Oh yeah, absolutely, it can't happen.
Speaker 1: You know, what's the pie today?
Speaker 2: It's still only ten, So like that's how that's how
Speaker 2: like if you're at four, you can rally a lot
Speaker 2: and still have even more to rally. That's how beat
Speaker 2: up airlines were. Again, that's only half of the S
Speaker 2: and P, and that's after a lot of rally. Although
Speaker 2: it's come down a little bit. But I'll give you
Speaker 2: some of the top holdings in this American Airlines, Southwest Airlines,
Speaker 2: Delta air Lines United. I mean, obviously I'm just going
Speaker 2: through all the airlines here that everybody knows. But it's
Speaker 2: even got stuff like Alaska Air Air Canada. So it
Speaker 2: definitely goes a little deeper into some of the like
Speaker 2: lesser known airlines. But I would say that almost all
Speaker 2: of it is pure airline plays.
Speaker 3: There's some other things in there that are.
Speaker 2: Related to the industry, but mostly it's it's airline holdings.
Speaker 4: Athanasias, you got another one for me, I do. Ironically enough,
Speaker 4: this is another transportation one. I don't know why these
Speaker 4: ones seem to keep.
Speaker 1: Them at after that, right, And and like you know,
Speaker 1: if you're if you're looking for like a sector that
Speaker 1: you can kind of hit on, like COVID made this
Speaker 1: probably an interest especially interesting one.
Speaker 4: Uh yeah, And this one also I think kind of
Speaker 4: stems off of COVID and it's shipping. And this was
Speaker 4: during remember there was like a supply chain crisis for
Speaker 4: a while and the ships were just sitting out in
Speaker 4: the in the ocean for a little bit. There was
Speaker 4: one a shipping etf in the past. I think it
Speaker 4: was Googleheimen that closed. Just there's a new one that
Speaker 4: had come up. Boat again trying to go after the
Speaker 4: shipping theme. Something that gets overlooked. I think people don't
Speaker 4: don't give that one much thought. But this one hasn't
Speaker 4: done anything yet. It's not a Jets story, but it's
Speaker 4: definitely a whack.
Speaker 1: One to watch. Yep, Eric, when do you why do
Speaker 1: you think this one hasn't taken off? Considering we all
Speaker 1: became so aware of supply chain issues and global shipping.
Speaker 3: Yeah, this is a.
Speaker 2: One of the most fascinating stories because C was around
Speaker 2: for I don't know, ten twelve years, right, and nothing
Speaker 2: really happened with it, and they closed up shop. And
Speaker 2: I remember acutely following this rate. When C closed, shipping
Speaker 2: went crazy. And if C was opened from the time
Speaker 2: it closed, it would have gone up like one hundred
Speaker 2: percent in like six months.
Speaker 1: It literally had the right exposure, right idea, Yes, and
Speaker 1: it just happened to like shut down a little too early.
Speaker 2: Like like literally a month or two too early. Every
Speaker 2: now and then we see this. The Coal ETF also
Speaker 2: did that, but after one hundred percent gain boat launches.
Speaker 1: So between C barticular, I think boat overseas.
Speaker 3: I know I'm on a boat, is what I keep thinking.
Speaker 2: But certainly the different when C closed before Boat launched,
Speaker 2: that's when the majority of the gains and these stocks happened.
Speaker 2: So Sonic Shares, which has the boat ETF, still has
Speaker 2: twenty million, but it would be doing better if it
Speaker 2: had launched ahead of that. These are sort of one
Speaker 2: hundred percent gain that was missed by both ETFs. So
Speaker 2: just a kind of unfortunate situation. But it was the one
Speaker 2: hundred percent gain that I think caught the attention of
Speaker 2: the Sonic Chairs people who thought, man, I you know,
Speaker 2: this category is up, this sector is up so much.
Speaker 2: Why isn't there an ETF. Oh, this one closed, let's
Speaker 2: launch one. Takes seventy five days to get the ETF
Speaker 2: to market, you know, added up, and you missed a
Speaker 2: big chunk of the rally. And that's what happens A lot.
Speaker 2: A lot of people do not launch ETFs after a
Speaker 2: rough patch. They usually launch them after the good patch,
Speaker 2: when the area gets attention from the media.
Speaker 3: That's why. Only on occasion is it something that launches
Speaker 3: after a.
Speaker 2: Really rough rough period, like the uranium miners, which I
Speaker 2: tend to watch for those because a lot of times,
Speaker 2: at least the ETF's ready for when the moment arrives,
Speaker 2: as supposed to coming a little after the moment. But
Speaker 2: that seems to be with the case.
Speaker 3: With both.
Speaker 1: Athinasious.
Speaker 4: We got one more, probably the most famous one of all.
Speaker 1: Save the best for a last Yeah.
Speaker 3: Rud Off, did you listen to Chris music? Already?
Speaker 1: Not? Not yet? Too early.
Speaker 4: There is red involved.
Speaker 2: The Walmart is putting Christmas ads during the World Series
Speaker 2: last night. I'm like, come on, man, it's not even Halloween.
Speaker 1: You're gonna make those make those numbers early.
Speaker 4: But this one is XIV, the credit Swiss in Verse
Speaker 4: VIX one. You know the volmaged in all.
Speaker 1: That twenty eighteen.
Speaker 4: Yeah, everyone, you know it was a great trade. It
Speaker 4: worked for a while and then it suddenly like one day,
Speaker 4: like totally broken. Yeah, but that has you know, after
Speaker 4: some review Bold two to shares brought back this product.
Speaker 4: The tickers s fix.
Speaker 1: Eric, what is different about it this time?
Speaker 2: Yeah, So I'm gonna read this for beatam because it
Speaker 2: is doing the same thing there had There had been
Speaker 2: a bunch of product or some products that like did
Speaker 2: half of what XIV did, like almost like a diet version.
Speaker 3: This one does go all the way.
Speaker 2: It does short the short term futures, but it does
Speaker 2: time weighted average price to set closing values rather than
Speaker 2: the four pm VIC settlement price. I won't go into details,
Speaker 2: but that is a little tiny tweak that should help
Speaker 2: it from like a Volma Geden situation where XIV had
Speaker 2: to close. But really it does the same thing. And
Speaker 2: to go back to XIV and how spectacular both up
Speaker 2: and down that was listen to these numbers. XIV went
Speaker 2: up twenty four hundred percent since launching through twenty eighteen,
Speaker 2: so that's about seven years. It returned twenty four hundred percent,
Speaker 2: and then it went down ninety percent in like a
Speaker 2: day and a half. So yeah, this was just like,
Speaker 2: I don't know, some kind of supernova kind of situation
Speaker 2: where it just exploded. But it made a lot of
Speaker 2: money for a lot of people, and I think this
Speaker 2: issuer was like, Hey, this is a product that should exist.
Speaker 2: Let's make a couple of tweaks. Now, keep in mind
Speaker 2: they also launched a double leverage one, which is again
Speaker 2: like another new t VIX which also went down in
Speaker 2: a blazing glory. This one is eighty six million dollars
Speaker 2: and you've has one hundred and fifty million, so and
Speaker 2: this issue charges a high fee for both, so they're
Speaker 2: both profitable already, so they're going to be around for
Speaker 2: the foreseeable future. But again for investors out there, anything
Speaker 2: related to the VIX is immediately rated R. It's like
Speaker 2: going to a rated R movie. I really would look
Speaker 2: to see why it's rated R. In our case, this
Speaker 2: is rolling VIX futures. When it's XIV. It's the equivalent
Speaker 2: of selling insurance like hurricane insurance. You get the premium
Speaker 2: and that's nice, but when a hurricane hits, you're on
Speaker 2: the hook. And that's essentially what happened with XIV. There
Speaker 2: was just no hurricanes for a long time, and then
Speaker 2: bam there was a massive one, like a Andrew type
Speaker 2: hurricane called Vahmageddon. And so right now you know, obviously
Speaker 2: with lowvall you'll make more money in uvix, and then
Speaker 2: when the hurricane hits, that's when t VIX goes up
Speaker 2: and spikes. So again, these are very power tool type products.
Speaker 2: I'd be very careful with them if you're listening at home.
Speaker 2: But yeah, they're back on the market, resurrected Lazarus style.
Speaker 1: Okay, I want to ask, is there one that when
Speaker 1: down that hasn't come back that you're like, oh, this
Speaker 1: is this is when to watch.
Speaker 4: I mean there's a lot. I would bring back the
Speaker 4: coal one, so if you have the superpower. Yeah, there's
Speaker 4: a whole lineup from Bannack Coal Frack that I think
Speaker 4: got closed during this whole ESG craze, right, and now
Speaker 4: that story's being unwound a little bit, so I feel
Speaker 4: like they were unfairly criticized and closed during that time,
Speaker 4: so I feel like they should get like a get
Speaker 4: out of jail free card and be able to come back.
Speaker 4: So that's one i'd probably bring back. And I think
Speaker 4: it's I think it's a good trade. I think it's
Speaker 4: a it's pretty it's it's a pretty unique exposure.
Speaker 1: Eric. When you're walking around around the graveyard, which one
Speaker 1: went too soon for you?
Speaker 2: For some reason, For some reason, I just immediately think
Speaker 2: of the fishing ETF. But that's just because I love fishing.
Speaker 2: It has nothing to do with the performance. I just
Speaker 2: I just think the world's a better place with an
Speaker 2: ETF with fishing in the name. I just makes you
Speaker 2: think of going out there on the sea and fishing.
Speaker 2: This thing launched fish at the beginning of the financial crisis.
Speaker 2: I think it just had a bad timing.
Speaker 1: Okay, wait, wait, I know that is nostalgic or something.
Speaker 1: I don't know what that was, but now give us
Speaker 1: a real one. Okay.
Speaker 2: There was an ETF called the Short Squeeze ETF s
Speaker 2: q ZZ I think was the ticker, and it was
Speaker 2: an interesting product. It closed rate before all the game
Speaker 2: stop stuff where every stock that had a lot of
Speaker 2: high shorts in it was getting bought by the quote
Speaker 2: apes and the Reddit crowd, and it honestly, if it
Speaker 2: were around, it would have killed it during the Game
Speaker 2: stop era because all the stocks that were heavily shorted
Speaker 2: were being bought like crazy to try to create a
Speaker 2: short squeeze.
Speaker 1: I think it's like a third example of one that
Speaker 1: closed like just when it's time was like it.
Speaker 2: I know, we were actually trying to think of a
Speaker 2: term for that, where it's almost like you leave the
Speaker 2: movie right before like the exciting part, Like it's like,
Speaker 2: oh man, if you waited like two more minutes, you
Speaker 2: would have caught it.
Speaker 3: You would have been fine.
Speaker 1: Misconnection, I think that was what I mean, Yeah.
Speaker 3: Misk connection.
Speaker 2: But the short squeeze ETF would have been perfect for
Speaker 2: that era. But I do believe that in certain cases
Speaker 2: short squeeze, like in certain markets, those stocks that are
Speaker 2: heavily shorted, besides the sort of like Reddit crowd, can
Speaker 2: be a valuable tool for certain investors tool set. So
Speaker 2: that one was one I thought should have been resurrected.
Speaker 2: I thought somebody would have done it, especially as the
Speaker 2: Game Stop stuff was in full bloom. I thought somebody
Speaker 2: would have thrown that in the market, but a shame.
Speaker 2: I know the guy who put that out, and he's
Speaker 2: like a hedge fund manager at heart, and he closed
Speaker 2: it again, just prior to the whole game stop stuff.
Speaker 1: Well there's still time and maybe you know there's another
Speaker 1: Halloween episode that Athanasios. Thanks very much for joining us
Speaker 1: on Trillions.
Speaker 4: Oyeah, thanks for having me.
Speaker 1: Happy Halloween, Eric, Happy Halloween.
Speaker 5: Thanks for listening to Trillions until next time. You can
Speaker 5: find us on the Bloomberg Terminal, Bloomberg dot com, Apple Podcasts, Spotify,
Speaker 5: or wherever else you'd like to listen. We'd love to
Speaker 5: hear from you. We're on Twitter, I'm at Joel Webber Show.
Speaker 5: He's at Eric Balchuna's. This episode of Trillions was produced
Speaker 5: by Magnus Hendrickson.
Speaker 1: Bye.