1 00:00:05,840 --> 00:00:08,840 Speaker 1: Welcome to Trillions. I'm Joel Weeber and I'm Eric bel Tunis. 2 00:00:11,320 --> 00:00:13,360 Speaker 1: Eric is just back from inside E t F S 3 00:00:13,360 --> 00:00:16,160 Speaker 1: and Florida. What what is that again? Uh? You know, 4 00:00:16,200 --> 00:00:20,160 Speaker 1: it's the biggest et F conference I think around. People 5 00:00:20,200 --> 00:00:23,200 Speaker 1: go from the industry. It's in Hollywood, Florida, so it's 6 00:00:23,200 --> 00:00:25,680 Speaker 1: always like nice weather in February. Uh. And you've got 7 00:00:25,760 --> 00:00:27,960 Speaker 1: all kinds of people, you know, everybody from like Vanguard 8 00:00:28,000 --> 00:00:31,160 Speaker 1: and black Rock, right, two small issuers, to index makers, 9 00:00:31,200 --> 00:00:34,559 Speaker 1: to the back office to advisors. Uh. And they all 10 00:00:34,600 --> 00:00:36,599 Speaker 1: just big trade show, big trade show. It's you know 11 00:00:36,640 --> 00:00:39,320 Speaker 1: again like last year, I called the Comic Con of ETFs. 12 00:00:39,640 --> 00:00:42,479 Speaker 1: So last year you took your microphone and we did 13 00:00:42,520 --> 00:00:44,840 Speaker 1: a little episode and this year it was a really 14 00:00:44,960 --> 00:00:46,320 Speaker 1: Last year it was fun. I like that one, so 15 00:00:46,360 --> 00:00:48,000 Speaker 1: we wanted to do it again. Yeah. No, I think 16 00:00:48,000 --> 00:00:50,280 Speaker 1: it's good. It's just a little little sound bites. And 17 00:00:50,440 --> 00:00:52,520 Speaker 1: when I'm walking around, I'm busy, but I can get 18 00:00:52,560 --> 00:00:55,320 Speaker 1: somebody for five minutes or less, and it's just a 19 00:00:55,360 --> 00:00:58,200 Speaker 1: convenient way for me to get take a swab and 20 00:00:58,240 --> 00:01:00,000 Speaker 1: try to uh, you know, give you a little taste 21 00:01:00,080 --> 00:01:02,279 Speaker 1: of what what you missed. That's nice. I like that. 22 00:01:02,320 --> 00:01:05,959 Speaker 1: What what was the theme of the Petrie dish this year? Um? 23 00:01:06,000 --> 00:01:09,280 Speaker 1: You know, again E s G is relentless. The issuers 24 00:01:09,319 --> 00:01:10,920 Speaker 1: are very excited about it. We'll go over that in 25 00:01:10,920 --> 00:01:13,319 Speaker 1: a minute. UM. I don't know how much the actual 26 00:01:13,319 --> 00:01:15,760 Speaker 1: investors like it, but um issuers are into E s G. 27 00:01:16,440 --> 00:01:18,800 Speaker 1: There was some still, like I guess a little hangover 28 00:01:18,880 --> 00:01:21,920 Speaker 1: from x I V implosion and whether these exotic products 29 00:01:21,959 --> 00:01:25,080 Speaker 1: are suitable. UM was like a year ago, right, that 30 00:01:25,160 --> 00:01:27,640 Speaker 1: was a year ago, but there's still now there's downloads, 31 00:01:27,840 --> 00:01:30,440 Speaker 1: defined outcome ets. There's still a lot of I don't know, 32 00:01:30,520 --> 00:01:33,399 Speaker 1: like power tool type products coming out UM. And then 33 00:01:33,400 --> 00:01:36,039 Speaker 1: there was I think a lot of Thematic was a 34 00:01:36,040 --> 00:01:38,840 Speaker 1: big one because again there's been some good money into 35 00:01:38,840 --> 00:01:41,400 Speaker 1: them ETF. So that's where a lot of the smaller 36 00:01:41,440 --> 00:01:44,800 Speaker 1: time people are excited, you know. And we have a 37 00:01:44,840 --> 00:01:47,280 Speaker 1: couple of clips, clips of people with you know, basically 38 00:01:47,280 --> 00:01:49,640 Speaker 1: an index, idea and a dream and they go to 39 00:01:49,640 --> 00:01:51,760 Speaker 1: this event to try to hook up with an issuer. Oh, 40 00:01:51,800 --> 00:01:54,640 Speaker 1: by the way, since last year trillions was brand new 41 00:01:55,160 --> 00:01:58,200 Speaker 1: while you were at inside e TF, what do people 42 00:01:58,240 --> 00:02:00,920 Speaker 1: have to say this time? UM, so last year not 43 00:02:00,960 --> 00:02:02,880 Speaker 1: so much. Maybe one or two people this year a 44 00:02:02,880 --> 00:02:06,400 Speaker 1: lot more I think. You know, obviously issuers will take 45 00:02:06,440 --> 00:02:08,239 Speaker 1: notice because they want to come on and promote stuff. 46 00:02:08,280 --> 00:02:10,280 Speaker 1: So I'm not taking all of it. It's not all 47 00:02:10,280 --> 00:02:12,520 Speaker 1: going to my head. But there was some one guy 48 00:02:12,560 --> 00:02:15,400 Speaker 1: in particular stop me and said, listen, I just was 49 00:02:15,440 --> 00:02:17,320 Speaker 1: moved over to the E t F team at this 50 00:02:17,360 --> 00:02:19,280 Speaker 1: big company, and um, I didn't know a lot and 51 00:02:20,120 --> 00:02:22,040 Speaker 1: I sort of listened to your podcast, and I gotta 52 00:02:22,080 --> 00:02:24,040 Speaker 1: tell you, like, I was not happy about being moved, 53 00:02:24,520 --> 00:02:26,959 Speaker 1: but like your podcast really made it accessible fun, I 54 00:02:27,080 --> 00:02:29,480 Speaker 1: understand it better. And now I even got my wife 55 00:02:29,520 --> 00:02:32,120 Speaker 1: into it, and you know, she we both really love 56 00:02:32,200 --> 00:02:36,200 Speaker 1: the R two Dad's episode, which continues to resonate. Um, 57 00:02:36,240 --> 00:02:38,040 Speaker 1: and that was really great. That was the one that 58 00:02:38,080 --> 00:02:40,160 Speaker 1: stuck out, and I was just like to get like 59 00:02:40,200 --> 00:02:42,799 Speaker 1: that kind of heartfelt compliment about it. Was nice. I 60 00:02:42,840 --> 00:02:44,440 Speaker 1: gotta tell you so, because we worked hard on this. 61 00:02:44,480 --> 00:02:51,680 Speaker 1: So this time I'm trillions Comic Con of E t 62 00:02:51,840 --> 00:02:56,000 Speaker 1: F S Round two. All right, So you went around 63 00:02:56,360 --> 00:02:58,920 Speaker 1: inside et F with the microphone sticking in people's faces. 64 00:02:58,919 --> 00:03:01,600 Speaker 1: Who were getting here from first? First is Ben Johnson 65 00:03:01,600 --> 00:03:03,359 Speaker 1: from Morning Starting. Now we heard from him last year. 66 00:03:03,760 --> 00:03:06,480 Speaker 1: He is my peer, kind of my competitor, but he's 67 00:03:06,560 --> 00:03:09,320 Speaker 1: very articulate and um I just asked about a couple 68 00:03:09,360 --> 00:03:11,840 Speaker 1: of the bigger sort of themes that were being buzzed 69 00:03:11,880 --> 00:03:14,000 Speaker 1: out at the conference. The first one is on what 70 00:03:14,320 --> 00:03:16,440 Speaker 1: one of the main presentations was on was what comes 71 00:03:16,480 --> 00:03:18,400 Speaker 1: after the e t F? The e t F disrupted 72 00:03:18,400 --> 00:03:20,120 Speaker 1: the mutual fund? What's going to disrupt the e t F? 73 00:03:20,600 --> 00:03:24,600 Speaker 1: And Dave naten Egg and Matt Hogan speculated that the 74 00:03:24,720 --> 00:03:27,640 Speaker 1: disruptor would be something called direct indexing, where you just 75 00:03:27,680 --> 00:03:31,000 Speaker 1: basically fill out some form and you get a basket 76 00:03:31,040 --> 00:03:33,079 Speaker 1: of stocks that's right tier liking because the E t 77 00:03:33,200 --> 00:03:34,920 Speaker 1: F is sort of like you have to take what's there. 78 00:03:35,600 --> 00:03:38,040 Speaker 1: But Ben is skeptical. Here's what he has to say. So, 79 00:03:38,200 --> 00:03:43,920 Speaker 1: direct indexing is approach to creating portfolios that treats everyone 80 00:03:44,040 --> 00:03:46,840 Speaker 1: is the unique snowflake that they are, that creates a 81 00:03:46,960 --> 00:03:51,240 Speaker 1: very specific portfolio to meet their very specific leaves, which 82 00:03:51,440 --> 00:03:54,520 Speaker 1: in theories a great concept. It's an interesting concept, but 83 00:03:54,560 --> 00:03:57,280 Speaker 1: I think in reality it has the potential to walk 84 00:03:57,320 --> 00:03:59,800 Speaker 1: back a lot of the progress that investors have made 85 00:04:00,120 --> 00:04:03,240 Speaker 1: over the course of the past four plus decades, driving 86 00:04:03,280 --> 00:04:09,000 Speaker 1: towards ever lower fees, ever, greater transparency, less complexity across 87 00:04:09,080 --> 00:04:13,880 Speaker 1: the board, and fundamentally lower costs. So to the extent 88 00:04:13,960 --> 00:04:16,320 Speaker 1: that you take this wonderful rapper, the e t F 89 00:04:16,680 --> 00:04:19,160 Speaker 1: that we've all come down here to Florida to worship 90 00:04:19,200 --> 00:04:22,440 Speaker 1: too for every year for ten plus years now, I 91 00:04:22,760 --> 00:04:26,800 Speaker 1: think it could actually be detrimental to investors. That was 92 00:04:26,839 --> 00:04:29,440 Speaker 1: a rain cloud. Well on their presentation. He was sort 93 00:04:29,440 --> 00:04:31,240 Speaker 1: of saying, don't you know the e t F is 94 00:04:31,279 --> 00:04:34,640 Speaker 1: going nowhere? I know what he's saying. Look, you can 95 00:04:34,640 --> 00:04:36,240 Speaker 1: get an e t F now for four or five 96 00:04:36,440 --> 00:04:38,559 Speaker 1: whole You get a whole portfolio. The world's cheapest TTF 97 00:04:38,560 --> 00:04:41,000 Speaker 1: portfolio is now five basis points. That was another presentation. 98 00:04:41,480 --> 00:04:44,360 Speaker 1: That's an amazing thing. Direct indexing would cost more. The 99 00:04:44,440 --> 00:04:47,120 Speaker 1: selling and buying of the stocks would create potentially capital 100 00:04:47,160 --> 00:04:51,360 Speaker 1: gains which get are eliminated because the creation redemption mechanism 101 00:04:51,400 --> 00:04:53,520 Speaker 1: and the E t F. I agree with them. You 102 00:04:53,560 --> 00:04:56,479 Speaker 1: know what Ben was saying, and I agree is the 103 00:04:56,560 --> 00:05:00,880 Speaker 1: mass customization is your portfolio using E t S The 104 00:05:01,240 --> 00:05:03,159 Speaker 1: fact that you can get anything in the world now. 105 00:05:03,920 --> 00:05:06,320 Speaker 1: He equated it to going to Chipotle and like picking 106 00:05:06,320 --> 00:05:08,760 Speaker 1: out all your ingredients, the ingredients or the E T 107 00:05:08,920 --> 00:05:10,880 Speaker 1: F s. What Dave and Matt were kind of saying 108 00:05:10,920 --> 00:05:12,920 Speaker 1: was like, maybe you want to like really get specific 109 00:05:12,960 --> 00:05:15,480 Speaker 1: about the pork, and maybe you wanted from a certain 110 00:05:15,760 --> 00:05:18,800 Speaker 1: you know, distributor with a certain uh, every ingredient of 111 00:05:18,839 --> 00:05:22,360 Speaker 1: that particular ingredient would be your customized to you. I 112 00:05:22,440 --> 00:05:24,920 Speaker 1: don't even think people care that much about that level 113 00:05:24,960 --> 00:05:27,560 Speaker 1: of detail. I think an E s G that is 114 00:05:27,600 --> 00:05:30,599 Speaker 1: maybe where they want that kind of customization because it 115 00:05:30,680 --> 00:05:32,880 Speaker 1: is so personal. But I think if your portfolio, i mean, 116 00:05:32,880 --> 00:05:35,200 Speaker 1: look a total market, a total bond, I think most 117 00:05:35,240 --> 00:05:37,920 Speaker 1: people were just fine with that. Isn't it interesting though, 118 00:05:38,040 --> 00:05:40,080 Speaker 1: how the word direct has a little bit of buzz 119 00:05:40,120 --> 00:05:42,320 Speaker 1: to it because you know, in in I p O Land, 120 00:05:42,320 --> 00:05:44,920 Speaker 1: which is what you have historically done to go public, 121 00:05:45,240 --> 00:05:47,920 Speaker 1: Spotify last year did this direct listing thing and basically 122 00:05:47,960 --> 00:05:50,239 Speaker 1: said we don't need this I p O and cuts 123 00:05:50,240 --> 00:05:52,400 Speaker 1: out a bunch of fees and everything else, and and 124 00:05:52,640 --> 00:05:55,520 Speaker 1: it's a little similar and that it harnesses the fact 125 00:05:55,600 --> 00:05:57,680 Speaker 1: that at this day and age, people can just take 126 00:05:57,760 --> 00:06:01,560 Speaker 1: things to market places with a different vibe than they've 127 00:06:01,800 --> 00:06:04,039 Speaker 1: previously been able to. Yeah, there's just you know, the 128 00:06:04,080 --> 00:06:05,960 Speaker 1: fact that these e t f s are on in exchange. 129 00:06:06,000 --> 00:06:09,080 Speaker 1: You can trade them there regulated by the SEC. They're 130 00:06:09,080 --> 00:06:12,400 Speaker 1: in a pretty prospectus rapping a lot of that official 131 00:06:12,480 --> 00:06:16,360 Speaker 1: nous and liquidity is don't It's gonna take a long 132 00:06:16,400 --> 00:06:18,719 Speaker 1: time for that to go away. But Matt and Dave 133 00:06:18,760 --> 00:06:21,040 Speaker 1: are as sharp as they get, and you know, you gotta. 134 00:06:21,200 --> 00:06:25,080 Speaker 1: Their presentation is always provocative, and it was again this year. 135 00:06:25,120 --> 00:06:27,440 Speaker 1: So it's food for thought. Okay, now we're gonna hear 136 00:06:27,520 --> 00:06:30,960 Speaker 1: from the legendary Paul Tutor Jones, who I um he 137 00:06:31,040 --> 00:06:33,480 Speaker 1: spoke and then Paul Tutor Jones, the hedge fund manager. 138 00:06:34,200 --> 00:06:37,040 Speaker 1: Jones got Jones, Yeah, he was up there presenting on 139 00:06:37,160 --> 00:06:39,479 Speaker 1: e s G. He is all in on this. His 140 00:06:39,560 --> 00:06:42,640 Speaker 1: company has built an index that a Goldman Sachs et 141 00:06:42,760 --> 00:06:45,560 Speaker 1: F trap tracks with the ticker just and what I 142 00:06:45,560 --> 00:06:48,520 Speaker 1: found interesting about his presentation was he doesn't do e 143 00:06:48,760 --> 00:06:51,240 Speaker 1: s G like a lot of the funds, and a 144 00:06:51,279 --> 00:06:52,880 Speaker 1: lot of the funds have their own special way of 145 00:06:52,920 --> 00:06:55,279 Speaker 1: e s G. So I asked him about how he 146 00:06:55,360 --> 00:06:59,320 Speaker 1: kind of puts worker compensation above climate issues, which most 147 00:06:59,360 --> 00:07:01,120 Speaker 1: e s G might not do that, and that's why 148 00:07:01,200 --> 00:07:03,960 Speaker 1: Exxon lands in his e t F just which a 149 00:07:04,000 --> 00:07:06,240 Speaker 1: lot of people would be shocked at exons in your 150 00:07:06,240 --> 00:07:08,880 Speaker 1: E t F. He justifies why. Oh and by the way, 151 00:07:08,920 --> 00:07:11,240 Speaker 1: if you hear some dishes in the background. I after 152 00:07:11,280 --> 00:07:13,880 Speaker 1: his presentation, I went backstage and uh, we had to 153 00:07:13,880 --> 00:07:15,760 Speaker 1: go into the kitchen area, so it could be a 154 00:07:15,760 --> 00:07:18,840 Speaker 1: little clangy back there. So just f why, Hey man, 155 00:07:18,840 --> 00:07:21,120 Speaker 1: I'm working hard for the team here. The biggest difference 156 00:07:21,600 --> 00:07:23,200 Speaker 1: between us and other e s g s we had 157 00:07:23,240 --> 00:07:25,760 Speaker 1: no negative screening. So we listen to American public. The 158 00:07:25,760 --> 00:07:28,920 Speaker 1: American public says climate changers are really important. But you 159 00:07:28,960 --> 00:07:33,280 Speaker 1: know what, someone making a living wage, having being treated well, 160 00:07:33,640 --> 00:07:35,800 Speaker 1: having a decent income is two and a half times 161 00:07:35,840 --> 00:07:40,080 Speaker 1: support his climate change. And so again what we do 162 00:07:40,160 --> 00:07:43,679 Speaker 1: is we listen to American public, and just because someone 163 00:07:43,840 --> 00:07:47,760 Speaker 1: doesn't score great on climate change isn't a reason to 164 00:07:47,920 --> 00:07:51,960 Speaker 1: exclude them from other things they may be doing great. 165 00:07:52,360 --> 00:07:55,800 Speaker 1: Exion is a great example. Exxon has the third highest 166 00:07:55,800 --> 00:07:58,480 Speaker 1: pay UH in the oil and gas industry and the 167 00:07:58,520 --> 00:08:01,920 Speaker 1: energy sector has the third and they have tenuere track 168 00:08:02,040 --> 00:08:07,000 Speaker 1: record of the greatest gender equity screening, so that they're 169 00:08:07,040 --> 00:08:10,240 Speaker 1: making sure they have a diverse, diverse workforce both on 170 00:08:10,360 --> 00:08:13,600 Speaker 1: race and gender, virtually anyone in that whole sector. So 171 00:08:14,320 --> 00:08:18,320 Speaker 1: it's not just about one event, it's about our one factor. 172 00:08:18,320 --> 00:08:20,600 Speaker 1: It's about multiple factors. And that's why this is such 173 00:08:20,600 --> 00:08:22,880 Speaker 1: a great et F So I hadn't heard about just 174 00:08:23,800 --> 00:08:25,840 Speaker 1: what's your take on it when you look at what 175 00:08:25,880 --> 00:08:28,840 Speaker 1: it's holding are I? Well, look, I agree with him. 176 00:08:29,040 --> 00:08:32,480 Speaker 1: I do think workers compensation, quality of life. He basically 177 00:08:32,720 --> 00:08:35,160 Speaker 1: showed a chart of what people think is most important 178 00:08:35,160 --> 00:08:38,080 Speaker 1: from companies, and that's how he designed it. And the 179 00:08:38,360 --> 00:08:41,760 Speaker 1: public is more concerned about workers compensation and treating people 180 00:08:41,840 --> 00:08:44,880 Speaker 1: nicely than they are about the climate right now. So 181 00:08:44,960 --> 00:08:47,960 Speaker 1: he's basically doing it structuring it that way. And I 182 00:08:48,000 --> 00:08:50,959 Speaker 1: gotta tell you, this guy was very convincing. Um that's 183 00:08:50,960 --> 00:08:53,920 Speaker 1: why he's probably such a success. The guy next to me, 184 00:08:53,920 --> 00:08:56,360 Speaker 1: he sat down, Um, he goes. I gotta be honest, 185 00:08:56,400 --> 00:08:58,400 Speaker 1: I was. I was pretty skeptical, but he kind of 186 00:08:58,440 --> 00:09:01,280 Speaker 1: sold me on this and I told him that afterwards. 187 00:09:01,320 --> 00:09:03,120 Speaker 1: He was pretty pleased by that. But just as off 188 00:09:03,120 --> 00:09:05,240 Speaker 1: to a good start. I think it's about two million. 189 00:09:05,480 --> 00:09:07,880 Speaker 1: That probably ranks it in top seven biggest d S 190 00:09:07,960 --> 00:09:10,120 Speaker 1: g A t F S already. But he's ambitious. He 191 00:09:10,120 --> 00:09:12,520 Speaker 1: wants this to be you know, a huge e t 192 00:09:12,679 --> 00:09:16,640 Speaker 1: F billions of dollars. Uh. He's pretty aggressive, grassroots sounding 193 00:09:16,760 --> 00:09:18,440 Speaker 1: for you know, try. He wants to take the fight 194 00:09:18,480 --> 00:09:20,640 Speaker 1: to the c suite, make them hear people, and he 195 00:09:20,679 --> 00:09:22,959 Speaker 1: thinks that you know you're by investing in that way, 196 00:09:23,200 --> 00:09:25,560 Speaker 1: that's the best way to send them a message. And 197 00:09:25,679 --> 00:09:28,720 Speaker 1: Excellent is not one that you would maybe expect to haven. 198 00:09:28,720 --> 00:09:31,840 Speaker 1: And he has lens right, yes, And that is why 199 00:09:31,920 --> 00:09:34,240 Speaker 1: I find it so interesting. What else is in there? 200 00:09:35,160 --> 00:09:36,480 Speaker 1: You know, it's a lot of the tex stalks. Like 201 00:09:36,640 --> 00:09:38,360 Speaker 1: I looked at it recently, I think it's like Google's 202 00:09:38,360 --> 00:09:42,520 Speaker 1: in there. Um, you've got um apple. Most of them 203 00:09:42,600 --> 00:09:45,000 Speaker 1: are ones you tend to see. But again, Excellent sort 204 00:09:45,000 --> 00:09:47,000 Speaker 1: of you know, sticks out like a sore thumb. But 205 00:09:47,520 --> 00:09:49,680 Speaker 1: he just you know that he's in there for a reason, 206 00:09:49,679 --> 00:09:57,319 Speaker 1: according to him, who're gonna hear from? Next? Okay? Next 207 00:09:57,360 --> 00:10:00,199 Speaker 1: is Perth Toll. She is one of these people who 208 00:10:00,200 --> 00:10:02,760 Speaker 1: has an index in a dream. So she was there, 209 00:10:03,080 --> 00:10:04,800 Speaker 1: you know, to do a lot of networking and she 210 00:10:04,880 --> 00:10:08,120 Speaker 1: just landed a deal to get her index with an 211 00:10:08,160 --> 00:10:10,160 Speaker 1: actual e t F and she found her first like 212 00:10:10,240 --> 00:10:13,280 Speaker 1: anchor tenant or client like seed capital. And so she 213 00:10:13,320 --> 00:10:15,240 Speaker 1: talked a little bit about what what this new ETF 214 00:10:15,280 --> 00:10:17,280 Speaker 1: will do. So she had the idea for an index, 215 00:10:17,480 --> 00:10:19,400 Speaker 1: and now she has to go around finding how do 216 00:10:19,440 --> 00:10:21,720 Speaker 1: I get a wrapper for this? Yeah? Her index is 217 00:10:21,840 --> 00:10:24,880 Speaker 1: freedom weighted Emerging Markets. Yeah, so we are instead of 218 00:10:24,920 --> 00:10:28,200 Speaker 1: market cap waiting the emerging markets, we freedom weight the 219 00:10:28,280 --> 00:10:31,160 Speaker 1: emerging markets, which means we're looking at seventy nine different 220 00:10:31,160 --> 00:10:35,280 Speaker 1: freedom variables and getting a UM composite country score and 221 00:10:35,400 --> 00:10:38,559 Speaker 1: using that country score UM that freedom level to wait 222 00:10:38,920 --> 00:10:42,079 Speaker 1: and select countries. So our country weights and country selection 223 00:10:42,160 --> 00:10:45,440 Speaker 1: comes from freedom waves in those countries. And that freedom 224 00:10:45,440 --> 00:10:48,480 Speaker 1: weight comes from UM three different categories of freedoms, the 225 00:10:48,559 --> 00:10:50,280 Speaker 1: rights of life, the rights of liberty, and the rights 226 00:10:50,280 --> 00:10:53,480 Speaker 1: of property. And what made you think of this? So 227 00:10:53,559 --> 00:10:55,600 Speaker 1: I grew up in China, and uh, I grew up, 228 00:10:55,600 --> 00:10:57,040 Speaker 1: you know, half in China, half in the US, and 229 00:10:57,080 --> 00:11:00,319 Speaker 1: I saw some things. UM when I went back to 230 00:11:00,920 --> 00:11:02,760 Speaker 1: you know, live in Hong Kong and traveled a lot 231 00:11:02,800 --> 00:11:06,800 Speaker 1: to mainland China over that time. UM, that made me 232 00:11:06,800 --> 00:11:10,360 Speaker 1: realize that freedom was important for a market. And UM, 233 00:11:10,400 --> 00:11:12,880 Speaker 1: I saw the difference between the mainland Chinese market and 234 00:11:12,880 --> 00:11:15,720 Speaker 1: the Hong Kong market and you know, frankly the US 235 00:11:15,800 --> 00:11:20,040 Speaker 1: market and just noticed that freedom has a huge impact 236 00:11:20,040 --> 00:11:23,600 Speaker 1: on market. So that's a fascinating idea that that markets 237 00:11:23,600 --> 00:11:26,760 Speaker 1: are better off when they're free, right, and that there's 238 00:11:26,800 --> 00:11:29,280 Speaker 1: different types of freedom that she's come up with. How 239 00:11:29,320 --> 00:11:30,679 Speaker 1: do you think that's gonna work in an e t 240 00:11:30,840 --> 00:11:33,120 Speaker 1: f Uh, We're gonna have to see she you know, 241 00:11:33,200 --> 00:11:36,160 Speaker 1: she's basing it on the more freedom, the more democracy, 242 00:11:36,640 --> 00:11:40,000 Speaker 1: the better capital markets do. So look, the performance will 243 00:11:40,000 --> 00:11:42,320 Speaker 1: probably drive most of the flows here, but I just 244 00:11:42,440 --> 00:11:45,120 Speaker 1: love that this is I love this part of the 245 00:11:45,160 --> 00:11:48,600 Speaker 1: ETF industry where somebody who has a real life experience 246 00:11:48,679 --> 00:11:52,040 Speaker 1: that's you know, across borders comes here and turns it 247 00:11:52,120 --> 00:11:55,920 Speaker 1: into an actionable idea. It's very Silicon Valley esque. And 248 00:11:56,080 --> 00:11:57,679 Speaker 1: you know, you don't get these kind of stories at 249 00:11:57,679 --> 00:11:59,520 Speaker 1: the big issuers very much. So there's a lot of 250 00:11:59,520 --> 00:12:02,720 Speaker 1: these small indies I call them who are just on 251 00:12:02,760 --> 00:12:04,920 Speaker 1: the grassroots with a you know, an idea, looking to 252 00:12:04,960 --> 00:12:07,439 Speaker 1: get it going. And you know a couple of them 253 00:12:07,440 --> 00:12:11,800 Speaker 1: will will become hits. So so you got like China, Mexico, Nigeria, 254 00:12:12,120 --> 00:12:14,320 Speaker 1: and how do you put all those together? Well, clearly, look, 255 00:12:14,320 --> 00:12:18,960 Speaker 1: most emerging markets ttfs are like twenty China. This will 256 00:12:19,000 --> 00:12:22,200 Speaker 1: be something else. There are some fundamentally weighted emerging market 257 00:12:22,240 --> 00:12:25,440 Speaker 1: tts or that do it different ways, where China is 258 00:12:25,440 --> 00:12:27,960 Speaker 1: a lower weight. UM, so I would imagine it would 259 00:12:27,960 --> 00:12:30,240 Speaker 1: look something more like that, and so you'd probably be 260 00:12:30,559 --> 00:12:32,959 Speaker 1: looking at if one of the countries that wasn't China 261 00:12:33,040 --> 00:12:36,000 Speaker 1: did really well, you would do better. My guess is 262 00:12:36,040 --> 00:12:38,840 Speaker 1: this thing kind of fluctuates and performance and it probably 263 00:12:39,200 --> 00:12:40,920 Speaker 1: will catch some people if it has a good run. 264 00:12:41,280 --> 00:12:43,400 Speaker 1: But I do think that it's an E s G 265 00:12:44,720 --> 00:12:46,559 Speaker 1: play like it can appeal to the E s G 266 00:12:46,679 --> 00:12:50,559 Speaker 1: investor in the into the in terms of the emerging markets. Okay, 267 00:12:50,559 --> 00:12:54,800 Speaker 1: so we've talked to Ben and bottle Lightning with a 268 00:12:54,800 --> 00:12:58,600 Speaker 1: big idea. Who's next. Next up we have is Michael 269 00:12:58,679 --> 00:13:03,240 Speaker 1: Steele Um if you much MSNBCU, he's on a lot um. 270 00:13:03,240 --> 00:13:05,320 Speaker 1: He's the he used to be the chairman of the GOP. 271 00:13:05,440 --> 00:13:08,080 Speaker 1: I believe he was there with Donna Brazil doing this 272 00:13:08,280 --> 00:13:10,800 Speaker 1: just sort of like political roundtable. Not for nothing. You've 273 00:13:10,800 --> 00:13:13,760 Speaker 1: got some names I did. He was pretty easy. He 274 00:13:13,800 --> 00:13:16,040 Speaker 1: came out after into the public sphere and a lot 275 00:13:16,040 --> 00:13:17,360 Speaker 1: of people were talking to him, and I just walked 276 00:13:17,400 --> 00:13:19,200 Speaker 1: up real quick and asked him. I had to ask 277 00:13:19,280 --> 00:13:22,360 Speaker 1: him about MAGA And you know, there's a MAGA et 278 00:13:22,520 --> 00:13:25,559 Speaker 1: F that invests in stocks that have heavy GOP donors. 279 00:13:25,920 --> 00:13:28,320 Speaker 1: What do you think of that? I did not have 280 00:13:28,400 --> 00:13:31,800 Speaker 1: to check that out. Really really, that's a real thing. 281 00:13:31,880 --> 00:13:35,240 Speaker 1: That's a real thing. Yeah, God bless him. Is it? 282 00:13:35,360 --> 00:13:38,400 Speaker 1: Is it a good return? No? It has no Tech's 283 00:13:38,440 --> 00:13:42,000 Speaker 1: only industrials and energy, So yeah, without tech because they 284 00:13:42,000 --> 00:13:48,200 Speaker 1: don't they don't donate top so that you know tech. Yeah, yeah, 285 00:13:48,240 --> 00:13:50,880 Speaker 1: where we got Look, we can have a better relationship 286 00:13:50,920 --> 00:13:53,080 Speaker 1: with the tech community, for sure, because I think a 287 00:13:53,080 --> 00:13:55,599 Speaker 1: lot of the things is that the tech community is 288 00:13:55,640 --> 00:13:59,440 Speaker 1: concerned about. At least old school conservatives like myself would 289 00:13:59,480 --> 00:14:02,920 Speaker 1: be there advocating to support them, but it's kind of 290 00:14:02,960 --> 00:14:05,840 Speaker 1: hard these days. So dude didn't even know about MAGA. Yeah, 291 00:14:05,840 --> 00:14:07,320 Speaker 1: he didn't know about it. I mean it's pretty small 292 00:14:07,360 --> 00:14:10,000 Speaker 1: e t F. But um, you know his reaction was 293 00:14:10,600 --> 00:14:13,080 Speaker 1: I think interesting. You know somebody who used to be uh, 294 00:14:13,160 --> 00:14:15,920 Speaker 1: the GOP chairman, That is an interesting idea that that 295 00:14:15,920 --> 00:14:18,040 Speaker 1: would be the target market, right there is somebody like that. 296 00:14:18,440 --> 00:14:21,760 Speaker 1: It is also interesting that he understands why it wouldn't 297 00:14:21,760 --> 00:14:24,520 Speaker 1: have tech right, and it's so and it's a problem, 298 00:14:24,560 --> 00:14:26,120 Speaker 1: and and and then it's a problem. I think it 299 00:14:26,240 --> 00:14:30,880 Speaker 1: was just really interesting. And maybe someday, someday MAGA will 300 00:14:30,960 --> 00:14:35,720 Speaker 1: have overweight tech. Who knows that'll be the day. Uh. 301 00:14:35,720 --> 00:14:38,080 Speaker 1: And if you want to learn more about MAGA, Rachel 302 00:14:38,080 --> 00:14:40,080 Speaker 1: Evans did a great episode with us where she went 303 00:14:40,120 --> 00:14:42,600 Speaker 1: and talked to the founder down in Texas, what what 304 00:14:42,760 --> 00:14:52,920 Speaker 1: instigated the idea and how it's constructed. Okay, so the 305 00:14:52,920 --> 00:14:55,000 Speaker 1: first guy that we talked to was Ben Johnson. You 306 00:14:55,080 --> 00:14:57,200 Speaker 1: talked to him more than once. What was what was 307 00:14:57,240 --> 00:14:58,800 Speaker 1: the next question that you asked him? I asked him 308 00:14:58,800 --> 00:15:01,680 Speaker 1: about the There was two big bombshell news that was 309 00:15:01,680 --> 00:15:04,600 Speaker 1: there's always somebody putting out news around the conference. Fidelity 310 00:15:04,600 --> 00:15:07,000 Speaker 1: and Schwab literally within an hour of each other, put 311 00:15:07,000 --> 00:15:08,840 Speaker 1: out news that they were increasing the amount of e 312 00:15:08,880 --> 00:15:11,680 Speaker 1: t s you could trade for free, because last year 313 00:15:11,760 --> 00:15:13,720 Speaker 1: Vanguard said you can basically trade all of them eighteen 314 00:15:13,760 --> 00:15:15,840 Speaker 1: hundred and everybody was like, oh my god. It was 315 00:15:15,840 --> 00:15:19,440 Speaker 1: like a bombshell. And so now Fidelity and Schwab said, okay, 316 00:15:19,480 --> 00:15:21,600 Speaker 1: we're gonna up ours now you can trade five hundred 317 00:15:21,640 --> 00:15:24,160 Speaker 1: for free. I asked Ben about that and what he thought. 318 00:15:24,400 --> 00:15:27,320 Speaker 1: I think the important point for investors is to understand 319 00:15:27,360 --> 00:15:32,160 Speaker 1: that free is not free. That although it's a fantastic 320 00:15:32,200 --> 00:15:36,760 Speaker 1: thing that fees had been compressed to near zero levels, 321 00:15:36,800 --> 00:15:40,239 Speaker 1: there's a handful of funds that charge nothing, that commissions 322 00:15:40,640 --> 00:15:43,600 Speaker 1: have gone away. In the case of an ever larger 323 00:15:43,640 --> 00:15:46,840 Speaker 1: list of e t s that the real risk here 324 00:15:46,920 --> 00:15:50,040 Speaker 1: is that they're an implicit costs that are hidden elsewhere. 325 00:15:50,200 --> 00:15:52,600 Speaker 1: So I think the first place you should look is 326 00:15:52,640 --> 00:15:55,040 Speaker 1: what are you learning on your cash account, what are 327 00:15:55,080 --> 00:15:57,640 Speaker 1: you earning on your money market account, and how does 328 00:15:57,680 --> 00:16:02,280 Speaker 1: that stack up relative to say an online savings account. Okay, 329 00:16:02,280 --> 00:16:05,400 Speaker 1: so that's interesting. Yeah, again, you know low cost e 330 00:16:05,520 --> 00:16:07,680 Speaker 1: t f s low cost you're free trading. There's a 331 00:16:07,680 --> 00:16:09,440 Speaker 1: bit of a loss leader angle to this. They're trying 332 00:16:09,440 --> 00:16:11,360 Speaker 1: to get you into do other things. He made a 333 00:16:11,360 --> 00:16:13,280 Speaker 1: good point that if you're doing free trading and using 334 00:16:13,280 --> 00:16:15,400 Speaker 1: their platform, and like you have a cash account there, 335 00:16:15,720 --> 00:16:17,720 Speaker 1: look at how much you're getting on that cash account 336 00:16:17,760 --> 00:16:20,240 Speaker 1: and compare it elsewhere. That's one thing. The other thing 337 00:16:20,320 --> 00:16:22,600 Speaker 1: is did e t F that trade for free on 338 00:16:22,640 --> 00:16:25,720 Speaker 1: schwab and fidelity other places they are paid a play. 339 00:16:25,760 --> 00:16:29,240 Speaker 1: So a lot of those issuers are giving them money 340 00:16:29,360 --> 00:16:32,160 Speaker 1: to make them free trading their subsidizing that, and they 341 00:16:32,640 --> 00:16:34,200 Speaker 1: picked the e t f s to push that. They 342 00:16:34,200 --> 00:16:36,320 Speaker 1: don't have as much assets, so a lot of times 343 00:16:36,440 --> 00:16:38,240 Speaker 1: the ones that are free aren't the ones you that 344 00:16:38,320 --> 00:16:40,560 Speaker 1: might be most popular, that you might want. So it's 345 00:16:40,560 --> 00:16:46,760 Speaker 1: another thing to look out for. You know. Another thing 346 00:16:46,840 --> 00:16:50,240 Speaker 1: that I was wondering about Eric last year, Uh, you 347 00:16:50,320 --> 00:16:52,080 Speaker 1: had to go up on stage and make a pitch 348 00:16:52,120 --> 00:16:55,080 Speaker 1: about something. Oh God, you didn't do well? What how 349 00:16:55,080 --> 00:16:57,880 Speaker 1: did you do this year? Not good? What happened? I 350 00:16:57,920 --> 00:17:00,160 Speaker 1: don't know what it is? And what's the format? What 351 00:17:00,200 --> 00:17:02,400 Speaker 1: are you guys? What are you doing? It's Uh, it's 352 00:17:02,440 --> 00:17:04,600 Speaker 1: basically called Battle of the Pundance and we all make 353 00:17:04,640 --> 00:17:06,159 Speaker 1: a case for the best new e TF launch. We 354 00:17:06,200 --> 00:17:08,640 Speaker 1: have two minutes. Somebody's assigned to rebut you for one minute, 355 00:17:08,640 --> 00:17:10,639 Speaker 1: and then you have thirty second response and then the 356 00:17:10,640 --> 00:17:13,960 Speaker 1: audience cheers. The cheering of the audiences decides the winner. 357 00:17:14,600 --> 00:17:16,120 Speaker 1: And I don't know, it's probably middle of the I'm 358 00:17:16,119 --> 00:17:18,760 Speaker 1: always middle of the pack. Um, what was your pick? 359 00:17:18,840 --> 00:17:20,840 Speaker 1: What was your opony? This year? I picked a A 360 00:17:20,840 --> 00:17:24,240 Speaker 1: A U a new gold ETF from Perth, and I 361 00:17:24,240 --> 00:17:27,840 Speaker 1: picked it because it it's a cheap, it's physically it's 362 00:17:27,880 --> 00:17:30,479 Speaker 1: physically backed, it's backed by the Australian Government. It's it's 363 00:17:30,480 --> 00:17:32,560 Speaker 1: just it's got a lot of features, it's low cost, 364 00:17:32,840 --> 00:17:34,720 Speaker 1: and I really wanted to talk about how I think 365 00:17:34,760 --> 00:17:36,760 Speaker 1: gold is misunderstood. So I made the case for gold 366 00:17:36,800 --> 00:17:39,679 Speaker 1: and the e t F. But who took you down? Uh? 367 00:17:39,800 --> 00:17:43,240 Speaker 1: The person Dave not A had me and he his his. 368 00:17:43,400 --> 00:17:46,200 Speaker 1: The two things he said weren't that hard to overcome. 369 00:17:46,640 --> 00:17:48,720 Speaker 1: But I just got a little flustered. Again. I was 370 00:17:49,080 --> 00:17:51,000 Speaker 1: running on empty at that point because it was later 371 00:17:51,040 --> 00:17:53,600 Speaker 1: in the conference, and uh, right afterwards, I was like, 372 00:17:53,640 --> 00:17:55,920 Speaker 1: I had the two responses have been perfect, but I 373 00:17:56,040 --> 00:17:57,520 Speaker 1: just didn't work out. And I think that's where I 374 00:17:57,520 --> 00:18:00,320 Speaker 1: lost some points. Is responding to his rebut all I 375 00:18:00,359 --> 00:18:02,679 Speaker 1: was just a little Yeah, I was on my I 376 00:18:02,720 --> 00:18:04,440 Speaker 1: was on my back heels a little. Yeah. So you 377 00:18:04,480 --> 00:18:07,320 Speaker 1: were focused on getting interviews. But the highlight obviously was 378 00:18:07,359 --> 00:18:11,040 Speaker 1: clearly Todd Rosenbluth did a actual rap. Yeah, he did 379 00:18:11,359 --> 00:18:13,240 Speaker 1: quality et F and he and he did a rap 380 00:18:13,280 --> 00:18:15,879 Speaker 1: about it is hilarious. There is if you go to 381 00:18:16,000 --> 00:18:18,199 Speaker 1: his h If you go to his Twitter account, he 382 00:18:18,200 --> 00:18:22,160 Speaker 1: posted some video of it and it's pretty much musty TV. Yeah, 383 00:18:23,040 --> 00:18:30,440 Speaker 1: graded one of them and Walhart I still loving pretty good. 384 00:18:31,400 --> 00:18:35,560 Speaker 1: This is where you wanted can join in again. Matt 385 00:18:35,640 --> 00:18:37,680 Speaker 1: Hogan one. He always wins. This guy could sell ice 386 00:18:37,720 --> 00:18:40,320 Speaker 1: to Eskimos. I think he could win doing x I V. 387 00:18:40,880 --> 00:18:42,399 Speaker 1: I think he'd go up there right now do x 388 00:18:42,440 --> 00:18:44,399 Speaker 1: IV and beat all of us. I will say it 389 00:18:44,520 --> 00:18:45,960 Speaker 1: is kind of like a home game for him. This 390 00:18:46,000 --> 00:18:50,120 Speaker 1: is like playing Tom Brady at Gillette Stadium. Okay, but 391 00:18:50,280 --> 00:18:53,159 Speaker 1: he's he's just the reigning champ. He's the Tom Brady 392 00:18:53,240 --> 00:18:56,280 Speaker 1: of this format. And I'm I'm good at other things, 393 00:18:56,359 --> 00:18:58,600 Speaker 1: but I just this this particular format. I just never 394 00:18:58,600 --> 00:19:00,880 Speaker 1: feel comfortable. You're good at asking for questions? What other 395 00:19:00,960 --> 00:19:03,920 Speaker 1: what other questions did you ask? Okay? So I didn't 396 00:19:04,000 --> 00:19:06,400 Speaker 1: get to interview Michael lewis per se, but I did 397 00:19:06,400 --> 00:19:09,600 Speaker 1: turn the mic on when he was speaking with Barry 398 00:19:09,600 --> 00:19:11,920 Speaker 1: red Holts on stage, So this audio isn't quite as good. 399 00:19:11,960 --> 00:19:14,120 Speaker 1: But there's two things I thought were interesting. The first 400 00:19:14,200 --> 00:19:16,359 Speaker 1: was on um, you know how he said the markets 401 00:19:16,359 --> 00:19:20,520 Speaker 1: were rigged? Yeah, Barry just said, are they still and 402 00:19:20,560 --> 00:19:22,160 Speaker 1: he kind of doubled down a little bit and here's 403 00:19:22,160 --> 00:19:23,720 Speaker 1: what he said, which I thought, this is kind of shocking. 404 00:19:26,480 --> 00:19:29,960 Speaker 1: SEC commissioners. They all said markets rigged. They will say 405 00:19:30,600 --> 00:19:32,520 Speaker 1: back then he said, no, no, it couldn't possibly be. 406 00:19:33,240 --> 00:19:36,520 Speaker 1: Um So this this shift inside the SEC, the shift 407 00:19:36,560 --> 00:19:40,199 Speaker 1: in signs design. But at the time, UM there was 408 00:19:40,720 --> 00:19:46,280 Speaker 1: this is outrageous scandal. Scandals interesting because a the SEC 409 00:19:46,400 --> 00:19:49,399 Speaker 1: admits it, and I mean, are they doing anything? Um 410 00:19:49,520 --> 00:19:52,400 Speaker 1: be what he talked about in Flashboys. When he put 411 00:19:52,400 --> 00:19:54,560 Speaker 1: the dollar amount, it resonated because he's like, look, this 412 00:19:54,600 --> 00:19:58,320 Speaker 1: is tiny, little fractions of sense. But if you added 413 00:19:58,400 --> 00:20:00,760 Speaker 1: up over the course of a year, he's between about 414 00:20:00,760 --> 00:20:03,640 Speaker 1: twelve billion and ninety billion that go into these high 415 00:20:03,680 --> 00:20:07,240 Speaker 1: frequency trading pockets. And that is a lot. I mean 416 00:20:07,280 --> 00:20:09,600 Speaker 1: when when you talk about like there was a study 417 00:20:09,680 --> 00:20:13,520 Speaker 1: last year that eleven billion was spent on underperforming active managers, 418 00:20:13,520 --> 00:20:15,480 Speaker 1: and I thought that was a lot. So this is 419 00:20:15,520 --> 00:20:17,240 Speaker 1: a much more than that, and so I do think 420 00:20:17,280 --> 00:20:20,439 Speaker 1: it adds up. That said, I moderated a panel on 421 00:20:20,480 --> 00:20:23,320 Speaker 1: trading and a lot of the people on there, I said, 422 00:20:23,320 --> 00:20:24,840 Speaker 1: what do you think of high frequency trading? They said, 423 00:20:24,840 --> 00:20:27,800 Speaker 1: it's it's actually more positive than than negative because it 424 00:20:27,880 --> 00:20:30,800 Speaker 1: does provide liquidity. It fills a lot of liquidity gaps, 425 00:20:30,800 --> 00:20:33,159 Speaker 1: and they just think that twelve to ninety billion is 426 00:20:33,200 --> 00:20:37,000 Speaker 1: just worth worth the causing. Yeah. So anyway, interesting little 427 00:20:37,000 --> 00:20:40,520 Speaker 1: side point. Now, he was also asked about what he 428 00:20:40,600 --> 00:20:43,480 Speaker 1: invested in with his personal money, and uh, let's see 429 00:20:43,480 --> 00:21:00,600 Speaker 1: what he says, very simply, uh sexy. So oh, I 430 00:21:00,640 --> 00:21:02,520 Speaker 1: actually knew he was going to say that because he's 431 00:21:02,560 --> 00:21:04,080 Speaker 1: been quoted a couple of times. So he's one of 432 00:21:04,119 --> 00:21:06,959 Speaker 1: the people. Like all celebrity Indexer, they're people who are 433 00:21:07,000 --> 00:21:09,320 Speaker 1: kind of famous, and he's probably one of the most 434 00:21:09,320 --> 00:21:12,000 Speaker 1: compelling because here's a guy who has sniffed around all 435 00:21:12,000 --> 00:21:14,320 Speaker 1: the sort of battels of Wall Street and the financial 436 00:21:14,320 --> 00:21:16,320 Speaker 1: system and used to work on it. Yeah, and used 437 00:21:16,359 --> 00:21:18,400 Speaker 1: to work on it, and that's where he puts his money. 438 00:21:18,400 --> 00:21:20,879 Speaker 1: I can't think of a more ringing endorsement for Index 439 00:21:20,920 --> 00:21:25,200 Speaker 1: funds than him buying him and Berkshire Hathaway. Again, that's 440 00:21:25,240 --> 00:21:26,920 Speaker 1: also on the flip side a little. I mean, Warren 441 00:21:26,920 --> 00:21:29,399 Speaker 1: Buffett's argubably the most famous active managers, so it's not 442 00:21:29,440 --> 00:21:31,560 Speaker 1: like he's all into Index. But I thought his answer 443 00:21:31,600 --> 00:21:35,720 Speaker 1: was pretty good. Okay. Next up Hector McNeil, who runs 444 00:21:35,720 --> 00:21:39,040 Speaker 1: an ETF issuer in in Europe. He's actually start up 445 00:21:39,040 --> 00:21:41,280 Speaker 1: a few companies. He's a veteran the industry. He was 446 00:21:41,359 --> 00:21:44,920 Speaker 1: over from Europe and there's a lot of build up 447 00:21:45,119 --> 00:21:49,199 Speaker 1: in Europe. People are like claiming their it's like a 448 00:21:49,280 --> 00:21:52,120 Speaker 1: land grab. He talked about the European et F market 449 00:21:52,160 --> 00:21:55,560 Speaker 1: A little thought was interesting. We're based in London as usual, 450 00:21:55,840 --> 00:21:58,360 Speaker 1: pretty much no further two into meets from every other 451 00:21:58,359 --> 00:22:01,280 Speaker 1: business that we've set up self are. But we believe that, 452 00:22:01,680 --> 00:22:04,400 Speaker 1: uh personally, we believe Europe's where the growth is because 453 00:22:04,400 --> 00:22:06,040 Speaker 1: I mean, you look at the US's four trillion dollars 454 00:22:06,080 --> 00:22:10,560 Speaker 1: of assets. Europe's under a billion, one half times population 455 00:22:11,040 --> 00:22:14,359 Speaker 1: than the US. Similar wealth demographic were probably five or 456 00:22:14,359 --> 00:22:16,600 Speaker 1: seven years behind Europe still less than ten percent and 457 00:22:16,640 --> 00:22:20,040 Speaker 1: passives as well, you know, you here so you can 458 00:22:20,040 --> 00:22:22,280 Speaker 1: see how the the US will probably go to six 459 00:22:22,280 --> 00:22:24,879 Speaker 1: seven trillion and easy fs you know where Europe, you know, 460 00:22:24,880 --> 00:22:26,879 Speaker 1: we'll probably get to two three trillion. So the growth 461 00:22:26,920 --> 00:22:29,879 Speaker 1: is there for me. So here's a guy who is 462 00:22:29,880 --> 00:22:33,200 Speaker 1: talking about the European market, very optimistic over there again 463 00:22:33,240 --> 00:22:35,919 Speaker 1: it's way lower than the US. There's some I don't know, 464 00:22:36,000 --> 00:22:38,560 Speaker 1: artificial barriers with brokers and you know, not switching to 465 00:22:38,600 --> 00:22:40,320 Speaker 1: the fee base. But I'm going to need details. But 466 00:22:40,880 --> 00:22:45,320 Speaker 1: I think look, Europe reminds me of the ETFs. Are technology, 467 00:22:45,440 --> 00:22:48,080 Speaker 1: and a good technology usually just breaks down the walls eventually, 468 00:22:48,320 --> 00:22:50,879 Speaker 1: and I think that's what everyone's thinking. So there is 469 00:22:50,920 --> 00:22:53,600 Speaker 1: a European inside et f s. But it was interesting 470 00:22:53,640 --> 00:22:56,040 Speaker 1: to see somebody from Europe here sort of you know, 471 00:22:56,440 --> 00:22:59,920 Speaker 1: making connect. We got we gotta work on our ground 472 00:23:00,000 --> 00:23:01,480 Speaker 1: and we got to do a Europe episode and by 473 00:23:01,520 --> 00:23:05,399 Speaker 1: the trip, well you know, Tom Sara Fagus, this is public. 474 00:23:05,480 --> 00:23:08,960 Speaker 1: Now he's moving to Yeah, he will be heading up 475 00:23:09,000 --> 00:23:13,600 Speaker 1: the ets European I know will know he's officially entrenched 476 00:23:13,640 --> 00:23:16,760 Speaker 1: when he says smart Beta. Do you think people over 477 00:23:16,800 --> 00:23:18,679 Speaker 1: there will understand how to pronounce his name better than 478 00:23:18,720 --> 00:23:20,679 Speaker 1: they do here? I still can't say his first name. 479 00:23:20,720 --> 00:23:24,119 Speaker 1: I got his last name down. Yeah. My goal for 480 00:23:24,200 --> 00:23:26,560 Speaker 1: his first name is by end of this year. So 481 00:23:26,720 --> 00:23:29,639 Speaker 1: we have two more. Yeah, two more. So let's go 482 00:23:29,840 --> 00:23:33,480 Speaker 1: to um Alex Moazid. Hopefully I didn't butcher his name, 483 00:23:33,520 --> 00:23:35,520 Speaker 1: but I think he did. I never met him before 484 00:23:35,760 --> 00:23:39,119 Speaker 1: here's a guy who wrote a book and he is 485 00:23:39,320 --> 00:23:42,359 Speaker 1: basically taking his book, made an index out of the 486 00:23:42,400 --> 00:23:44,880 Speaker 1: concept in the book, and now he's running around looking. 487 00:23:45,520 --> 00:23:48,119 Speaker 1: He'll tell us about it. I'm going to launch a 488 00:23:49,400 --> 00:23:52,240 Speaker 1: e t F based on platform and marketplace business models 489 00:23:52,520 --> 00:23:56,040 Speaker 1: and the next few months and I'm here to learn 490 00:23:56,080 --> 00:23:58,879 Speaker 1: about the e t F landscape and who the different 491 00:23:58,920 --> 00:24:02,560 Speaker 1: players are and how this whole industry works, and what's 492 00:24:02,600 --> 00:24:04,280 Speaker 1: the premise of the e t F, Like how did 493 00:24:04,320 --> 00:24:07,280 Speaker 1: it come about? The e t F is based on 494 00:24:07,359 --> 00:24:10,480 Speaker 1: a book I published in twenty sixteen called Modern Monopolies, 495 00:24:10,560 --> 00:24:13,760 Speaker 1: and it's all about how these platform business models really 496 00:24:14,160 --> 00:24:17,879 Speaker 1: control every major vertical in the economy. There has been 497 00:24:17,880 --> 00:24:19,879 Speaker 1: a couple of e t F s born from books, um, 498 00:24:20,440 --> 00:24:23,200 Speaker 1: but this one's uh, you know interesting And again I 499 00:24:23,280 --> 00:24:25,080 Speaker 1: think this is the kind of thing if you're look, 500 00:24:25,119 --> 00:24:27,040 Speaker 1: if you're picking stocks and you have a new way 501 00:24:27,080 --> 00:24:29,080 Speaker 1: to do it, it's a little bit of a uphill battle. 502 00:24:29,160 --> 00:24:32,399 Speaker 1: The large cap stock picking smart baid areas pretty crowded. 503 00:24:32,960 --> 00:24:36,320 Speaker 1: That said, if you can capture the imagination, like if 504 00:24:36,400 --> 00:24:39,280 Speaker 1: that phrase what was a market monopolies? You know, if 505 00:24:39,640 --> 00:24:42,439 Speaker 1: if that's the right phrase, that just sears through the noise. Um, 506 00:24:42,600 --> 00:24:44,440 Speaker 1: he could have a hit on his hands. But you know, again, 507 00:24:44,520 --> 00:24:46,760 Speaker 1: here's somebody out there think about platforms, right, you think 508 00:24:46,840 --> 00:24:50,800 Speaker 1: like Spotify or an Apple or a Netflix, and you 509 00:24:50,880 --> 00:24:54,160 Speaker 1: put all those together and overweight those things like whoa, 510 00:24:54,520 --> 00:24:56,959 Speaker 1: that could be really interesting. Yeah. Look the robotics CTF 511 00:24:57,040 --> 00:24:59,080 Speaker 1: when it came out. Yeah, I mean, robotics wasn't that 512 00:24:59,080 --> 00:25:01,600 Speaker 1: big of a word when it came out. So if platforms, 513 00:25:01,680 --> 00:25:04,000 Speaker 1: you know, you never know what's just gonna like rise 514 00:25:04,119 --> 00:25:06,720 Speaker 1: up above the noise and capture imagination or just like 515 00:25:07,000 --> 00:25:10,200 Speaker 1: hidden in plain sight. Yeah, having that little lens right there. Unfortunately, 516 00:25:10,240 --> 00:25:12,240 Speaker 1: the odds are for these small issuers that the product 517 00:25:12,280 --> 00:25:16,280 Speaker 1: will kind of FAILU rude awakening. Yeah. Well again I've 518 00:25:16,280 --> 00:25:19,480 Speaker 1: read as that that apps, you know, never make it. 519 00:25:19,560 --> 00:25:22,159 Speaker 1: Only one percent survives. So in the ETF industry, in 520 00:25:22,200 --> 00:25:25,560 Speaker 1: the small space, the thematic ETFs, the percentage a little higher, 521 00:25:25,920 --> 00:25:28,639 Speaker 1: but it's similar to that drum roll last one. So 522 00:25:28,840 --> 00:25:31,480 Speaker 1: I also spoke to Shelley and Tonio Wicks from the 523 00:25:31,560 --> 00:25:34,399 Speaker 1: Investment Company Institute Institute. She's an economist there. She does 524 00:25:34,440 --> 00:25:36,480 Speaker 1: a lot of great research, and I just asked about 525 00:25:36,520 --> 00:25:38,359 Speaker 1: mutual funds because a lot of people focus obviously on 526 00:25:38,400 --> 00:25:40,119 Speaker 1: e t f s here, mutual funds tend to be 527 00:25:40,320 --> 00:25:44,240 Speaker 1: sort of, um, I don't know, cousin, that's forgotten about. Yeah, 528 00:25:44,320 --> 00:25:46,640 Speaker 1: and some charts show how they've lost money, and it's 529 00:25:46,640 --> 00:25:50,040 Speaker 1: a little bit of a you know, um tribal situation 530 00:25:50,119 --> 00:25:51,760 Speaker 1: for e t f s and against mutual funds. But 531 00:25:52,119 --> 00:25:53,879 Speaker 1: I just I thought it'd be cool to end on 532 00:25:53,920 --> 00:25:55,800 Speaker 1: the fact that even though all this stuff is going 533 00:25:55,840 --> 00:25:58,000 Speaker 1: on at the e t F industry, um, you know, 534 00:25:58,119 --> 00:26:00,720 Speaker 1: mutual funds are alive and while they're far going anywhere, 535 00:26:00,760 --> 00:26:03,480 Speaker 1: and uh so I decided to ask about that. I 536 00:26:03,640 --> 00:26:05,960 Speaker 1: think that everybody looks at the J curve growth of 537 00:26:06,040 --> 00:26:08,480 Speaker 1: e t s and just extrapolates that, and that's not 538 00:26:08,600 --> 00:26:10,399 Speaker 1: going to be the case. There is always going to 539 00:26:10,520 --> 00:26:13,080 Speaker 1: be a role for mutual funds and e t s. 540 00:26:13,440 --> 00:26:17,480 Speaker 1: There are investors who are mutual fund investors that will 541 00:26:17,520 --> 00:26:19,520 Speaker 1: never move over to the E t F space, and 542 00:26:19,640 --> 00:26:23,040 Speaker 1: maybe they shouldn't. You need to take on the responsibility 543 00:26:23,080 --> 00:26:25,400 Speaker 1: of trading that et F and if you're not comfortable 544 00:26:25,520 --> 00:26:28,640 Speaker 1: with that secondary market trading and how the equity markets work, 545 00:26:29,240 --> 00:26:31,440 Speaker 1: the mutual fund might be where you want to be. 546 00:26:32,040 --> 00:26:35,840 Speaker 1: It's where your comfort zone is. And also, um, E 547 00:26:36,000 --> 00:26:38,159 Speaker 1: t s. You know, in the four oh one case space, 548 00:26:38,840 --> 00:26:43,400 Speaker 1: tax efficiency doesn't matter. It's broke, you need brokerage windows. 549 00:26:43,600 --> 00:26:48,359 Speaker 1: It's not necessarily a fit for you know, mutual funds. 550 00:26:48,680 --> 00:26:50,760 Speaker 1: They're a great fit for the four oh one case space. 551 00:26:51,000 --> 00:26:52,639 Speaker 1: So they're not going away. I mean these two things 552 00:26:52,680 --> 00:26:56,600 Speaker 1: are going to co exist for years, years, years, years, decades. Also, 553 00:26:56,720 --> 00:27:00,240 Speaker 1: mutual funds. Mutual funds incorporate index funds, and they taken 554 00:27:00,240 --> 00:27:01,440 Speaker 1: a lot of money. They took in I don't know, 555 00:27:01,480 --> 00:27:04,880 Speaker 1: maybe a two billion last year. UM, so they're passive. 556 00:27:05,119 --> 00:27:08,320 Speaker 1: So inside mutual funds is passive in a way. UM. 557 00:27:08,400 --> 00:27:10,200 Speaker 1: And the four one K argument was very strong E 558 00:27:10,280 --> 00:27:12,639 Speaker 1: t F s. You ever see Superman two, of course, 559 00:27:12,720 --> 00:27:15,200 Speaker 1: when he goes into that box and he loses his powers. 560 00:27:15,800 --> 00:27:18,440 Speaker 1: That box is the four one K market to the 561 00:27:18,520 --> 00:27:22,240 Speaker 1: E t F just does not have all its superpowers. 562 00:27:22,280 --> 00:27:24,600 Speaker 1: Go away because you don't need to interday trade. The 563 00:27:24,640 --> 00:27:28,399 Speaker 1: tax efficiency goes away. You can get cheap institutional classes 564 00:27:28,440 --> 00:27:30,400 Speaker 1: because the four one K market can pull the money together, 565 00:27:30,480 --> 00:27:33,199 Speaker 1: so the cost issue goes away, and actually you can 566 00:27:33,280 --> 00:27:35,760 Speaker 1: actually rack up more costs because of buying. Um, you 567 00:27:35,880 --> 00:27:37,119 Speaker 1: have to pay the spread every time you buy the 568 00:27:37,160 --> 00:27:39,159 Speaker 1: e t F. So the four one k market just 569 00:27:39,240 --> 00:27:41,000 Speaker 1: doesn't really make any sense for e t f s. 570 00:27:41,200 --> 00:27:44,720 Speaker 1: So the mutual funds definitely have that. But again their 571 00:27:44,760 --> 00:27:47,640 Speaker 1: asset growth has come from market returns and that's been great. 572 00:27:47,720 --> 00:27:50,280 Speaker 1: So they've taken in on average six billion a year 573 00:27:50,359 --> 00:27:52,439 Speaker 1: just on the stock market going up, even though they 574 00:27:52,560 --> 00:27:55,160 Speaker 1: lost on average a hundred billion a year. So again 575 00:27:55,160 --> 00:27:57,480 Speaker 1: they're not going anywhere. But the organic growth is definitely 576 00:27:57,480 --> 00:28:00,560 Speaker 1: a problem for especially active mutual funds. And just to 577 00:28:00,600 --> 00:28:04,320 Speaker 1: come full circle, active was a big conversation here, Um, 578 00:28:04,480 --> 00:28:08,639 Speaker 1: there's a lot more optimism about active ETFs non transparent 579 00:28:08,680 --> 00:28:10,879 Speaker 1: active ETFs, which is we should do an episode on 580 00:28:10,920 --> 00:28:12,960 Speaker 1: at some point down the road. And a lot of 581 00:28:12,960 --> 00:28:14,959 Speaker 1: the traditional active funds that you love and know are 582 00:28:15,000 --> 00:28:17,560 Speaker 1: all there now right. You know, You've got Fidelity was there. 583 00:28:17,600 --> 00:28:20,280 Speaker 1: They have a booth, you know, so you know, it's 584 00:28:20,480 --> 00:28:22,879 Speaker 1: very much all together at this point. I think a 585 00:28:22,920 --> 00:28:26,920 Speaker 1: lot of these funds, and Shelly reiterated this, they look 586 00:28:26,960 --> 00:28:29,440 Speaker 1: at the e t F as just another distribution vehicle. 587 00:28:30,280 --> 00:28:32,800 Speaker 1: I'm sure they wouldn't like this to happen because the 588 00:28:32,840 --> 00:28:34,639 Speaker 1: e t F makes them less money. But at the 589 00:28:34,720 --> 00:28:36,879 Speaker 1: end of the day, it's another distribution vehicle. Look, you know, 590 00:28:36,880 --> 00:28:38,920 Speaker 1: if you're a musician, you want my music in the 591 00:28:39,000 --> 00:28:41,040 Speaker 1: c D, you want it in vinyl, where you want 592 00:28:41,040 --> 00:28:43,760 Speaker 1: it through iTunes. Um, you know, I don't care as 593 00:28:43,800 --> 00:28:50,520 Speaker 1: long as you're listening to it. Thanks for listening to 594 00:28:50,560 --> 00:28:52,680 Speaker 1: Trilliance until next time. We can find us on the 595 00:28:52,680 --> 00:28:57,320 Speaker 1: Bloomberg terminal, Bloomberg dot com, Apple Podcast, Spotify, where else 596 00:28:57,360 --> 00:28:59,400 Speaker 1: can back to listen. We'd love to hear from you. 597 00:28:59,600 --> 00:29:04,200 Speaker 1: We're on I'm at Joel Webber Show, He's at Eric Balcunas. 598 00:29:05,160 --> 00:29:08,720 Speaker 1: Trillions is produced by Magnus Hendrickson. Francessica Levie is the 599 00:29:08,760 --> 00:29:10,760 Speaker 1: head of Bloomberg Podcast by