Speaker 1: Welcome to Trillions. I'm Joel Webber and I'm Eric call
Speaker 1: tunis Eric Happy. Um. I have a new year's resolution,
Speaker 1: which is to make more money than than uh last year,
Speaker 1: and I would like some investing advice and I'm hoping
Speaker 1: that you and your team of analysts that Bloomberg Intelligence
Speaker 1: can help me out. Is that is that kosher? Can
Speaker 1: we can we do that? Yeah? I mean I actually
Speaker 1: thought your resolution was gonna be to clean your closet. Yeah,
Speaker 1: you know, we we've been for those not in the know,
Speaker 1: I've been recording in my closet for many, many many
Speaker 1: episodes of Trillions. It's actually my wife's closet. But yeah,
Speaker 1: here we are to answer your question though. Yes. Um.
Speaker 1: So every year we write all these outlooks and it's
Speaker 1: all very you know, sell side research ish. But one
Speaker 1: thing we do that's a little buzzfeedish is a listical
Speaker 1: twenty two et s for and sometimes we do retail
Speaker 1: conferences and the doing yourself retail investors. They don't really
Speaker 1: care that much about like how much is going from
Speaker 1: advisors to brokers and some of that, like more trendy stuff.
Speaker 1: They were just they want tickers. They they want to
Speaker 1: learn e t s through tickers. They want genuine ideas
Speaker 1: of of interesting new innovative products and whatnot. So we
Speaker 1: did this because of that. And we don't necessarily these
Speaker 1: ATMs are gonna go up. We're down. We don't make
Speaker 1: any advice, but these are e t f s that
Speaker 1: we just can't get off our mind. They're ones that
Speaker 1: have really just stuck into our brain and we feel
Speaker 1: like tap into bigger themes that we're watching as well,
Speaker 1: and so we do it every year. And so we
Speaker 1: have um, you know, Ethanacios, James and Rebecca on our
Speaker 1: team who all contributed some of the e t s
Speaker 1: of the twenty two So joining us on this epposite
Speaker 1: of trillions, James Staffert, Athan Nacios, Seraphagus, and Rebecca Sin
Speaker 1: from Hong Kong. We're going to patch in so that
Speaker 1: she can contribute despite being at a different time zone
Speaker 1: from the rest of us recording. And we're gonna hear
Speaker 1: about some investing ideas for the next year. And don't
Speaker 1: take this as investment advice. They're just ideas that hopefully
Speaker 1: that the way we're phrasing ConTroll is ets to watch, okay,
Speaker 1: watch sign off compliance, check that box. Okay, thanks for that.
Speaker 1: I also want to confess that we had some technical
Speaker 1: difficulties with my mike, so what follows may sound a
Speaker 1: little differently than I usually sound. Sorry about that this
Speaker 1: time on Trillions twenty two e t F s Athanasios,
Speaker 1: I'm gonna call you by your non Greek name from
Speaker 1: now on, which is Tom. That sounds good, and we're
Speaker 1: gonna start with you give me your picks. How am
Speaker 1: I going to make money in t F picks? Go?
Speaker 1: All right, I'm gonna come in hot with this first one.
Speaker 1: It's probably the biggest story of last year. Cathy would
Speaker 1: right an ARCS fund, but I'm going on the opposite
Speaker 1: side with the Shore arc fund. So it's s A
Speaker 1: r K, which is the Tunnel Capital Short Innovation e
Speaker 1: t F. I get it launching inverse. ETF is hard.
Speaker 1: Markets tend to go up over time. I like this one.
Speaker 1: It's got a lot of attention, very very quickly. Kathy
Speaker 1: has a lot of haters out there. If you look
Speaker 1: at performance it just launched, then I think, like November,
Speaker 1: it's up already. Historically, that's one of the best performing
Speaker 1: ets out of the gate. It's already got some volume
Speaker 1: I'm calling this one like a mini s q q Q.
Speaker 1: I think there's gonna be a good enough ecosystem around
Speaker 1: it that I think this product will be around for
Speaker 1: a while. Okay, so for that to succeed, Kathy has
Speaker 1: to fail right at the highest level. Yes, but if
Speaker 1: you look at something like s q q Q, right, so,
Speaker 1: over time markets go up. But I was actually pretty
Speaker 1: interested to see that even with the queues going up
Speaker 1: so much, the assets and sqq have been going up.
Speaker 1: So yeah, if Cathy's fund does well, just over time
Speaker 1: is gonna be going down. But the way her fund
Speaker 1: has actually been forming pretty recently, Uh, this has been
Speaker 1: doing really good. Like I said, the funds up launched,
Speaker 1: and not even the performance. I think if you can
Speaker 1: build a pretty strong trading ecosystem, I think this is
Speaker 1: what's going to keep this product alive. It's even just
Speaker 1: as much as the performance. And just remember s q
Speaker 1: q Q is obviously short the cues, and I think
Speaker 1: a lot of people look at SPY is sort of
Speaker 1: like the market. The cues is sort of like innovative tech,
Speaker 1: and then Cathy is like nonprofitable tech like stuff that
Speaker 1: hopefully we'll pay off weight on the road, and now
Speaker 1: she's actually creating her own little qui ish world. So
Speaker 1: I think this is actually a compliment or good for her.
Speaker 1: It'll because when this thing gets money, it's got to
Speaker 1: buy a r k K. So it's all kind of
Speaker 1: integrated into the Kathy ecosystem. So I think the liquid
Speaker 1: it is good. But I agree Tom, this is one
Speaker 1: that will probably have nice little spurts when ARC is
Speaker 1: sold off. Okay, next, Okay, this one sounds boring, but
Speaker 1: I think it's actually indicative of a much bigger thing.
Speaker 1: B KLC, which is the Bank of New York melon
Speaker 1: US Large Camp Cory TF, which is just basically um
Speaker 1: like a generic type of the SMP or one of
Speaker 1: those like generic large cap broad uh E T S.
Speaker 1: Why this one is different. It's free, has a zero
Speaker 1: expense ratio, right, so who who's not going to want
Speaker 1: a free E T F. I actually taking this pick
Speaker 1: as a product that I think is not going to
Speaker 1: raise that much money even though it's free, because when
Speaker 1: we look at what it's up against, right signed just
Speaker 1: Trump Vanguard, I get it. Being cheap is a good lane.
Speaker 1: You want to be in it. It's traducing work. Vanguard
Speaker 1: already owns that space. And if you look at what
Speaker 1: v O O can even do with tracking and total
Speaker 1: cost of ownership, you already getting the O for free.
Speaker 1: So I don't I think crying that money out of
Speaker 1: the O O is gonna be really really hard for
Speaker 1: this product. So I actually think that this is a
Speaker 1: case that even if it's free, it's not going to
Speaker 1: raise any money. Well, I will say it has four
Speaker 1: fifty million. That's probably a lot of B y O A,
Speaker 1: which is money coming in through their clients. But you
Speaker 1: know this is the idea. Bank of New York is
Speaker 1: a big custodian. They have a lot of they serve
Speaker 1: a lot of advisors. They can say, hey, look what
Speaker 1: by the ACME brand instead of Vanguard, it's three basis
Speaker 1: points cheaper and obviously maybe a coupe people are doing
Speaker 1: that next. All right, So Eric said, I can pick
Speaker 1: one European one and it doesn't have use. It's in
Speaker 1: the name, so it's fine. Uh, But I love this ticker.
Speaker 1: It's a CEO two uh. And this is the spark
Speaker 1: change physical carbon uh etc. And so carbons that been
Speaker 1: a really hot item. So what this does is advised
Speaker 1: carbon allowances. So I don't know if people know how
Speaker 1: those work. It's essentially like a permit that people could
Speaker 1: that companies can use to pollute. Right, So as companies
Speaker 1: want to buy these up, this e t F actually
Speaker 1: has two benefits. One, it's just going to track the
Speaker 1: price of these carbon credits right as they go up
Speaker 1: and then the demand they're gonna they're gonna track that price.
Speaker 1: But what's so different about this product compared to any
Speaker 1: other et F out there that that's tracking carbon credits.
Speaker 1: It actually owns the credits. So this is almost like
Speaker 1: a hoarder in a way, and that it's buying the
Speaker 1: credit ETFs taking it off the market so companies can't
Speaker 1: use them. It's actually taking the supply out of the market.
Speaker 1: So it's basically saying that even if companies wanted to
Speaker 1: buy these credits to the loot, they can't because we're
Speaker 1: buying up all the supply. And then that also will
Speaker 1: probably end up could potentially also end up moving the
Speaker 1: price a little bit higher as well, just because you're
Speaker 1: limiting it. So so they're actually like a market maker
Speaker 1: because they're able to take onto their books an asset
Speaker 1: that companies are are trying to get. Yeah, exactly. If
Speaker 1: you look at some of the other carbon ones that
Speaker 1: have done well, they're all just tracking futures, so parallels
Speaker 1: what's happening with bitcoin futures versus physical They're actually owning
Speaker 1: the credit, so even if you wanted to buy them,
Speaker 1: they're hoarding them. So I think it's a really interesting strategy.
Speaker 1: It's the first of its kind, um and I like
Speaker 1: I like the physically back aspect compared to some of
Speaker 1: the other things anything. Yeah, they've actually done quite a bit.
Speaker 1: They're over a hundred million, uh and only a couple
Speaker 1: of months, and that's in Europe, so that's actually really
Speaker 1: impressively in the context of that market. It's really really good.
Speaker 1: It's a very very strong that makes up for your
Speaker 1: previous pick, which was a little boring. Let's see what
Speaker 1: you got for number or alright, this one's boring too,
Speaker 1: but it's uh. It's sp I B, which is a
Speaker 1: Spider portfolio intermediate term corporate bond ETF. They cut their
Speaker 1: fee on this, so they vanguarded vanguarded, and Vanguard ended
Speaker 1: up cutting the fee. But what I think this is
Speaker 1: so important is if you look at the fixed income
Speaker 1: et F market, it's all black Rock and Vanguard. They're
Speaker 1: they're like eighty percent of the assets. State Street really
Speaker 1: missed an opportunity here, and they were one of the original,
Speaker 1: you know, ones that could launch fixed income ets. I
Speaker 1: think they're gonna put a lot of effort into their
Speaker 1: fixed income line up with fee reductions, maybe launching more products.
Speaker 1: I just think this is the way that they're And
Speaker 1: if you look at what's happening the rest of their business,
Speaker 1: you know they're losing share too. I shares in Vanguard,
Speaker 1: So I actually think they're gonna really try to make
Speaker 1: it up on the fixed income side. So I'd be
Speaker 1: looking for some really really aggressive moves for State Street
Speaker 1: in their fixed income space. And I'm just picking this
Speaker 1: et F as a proxy just because they were so
Speaker 1: aggressive with some of the recent feet cuts. All Right,
Speaker 1: I'm still bored. Giving some fireworks to end, Okay, I
Speaker 1: think this is a pretty nice picker. It's MVPs, which
Speaker 1: is the amplified thematical Austar e t F. Now how
Speaker 1: we were talking about KATHY before. Just thematic ets in
Speaker 1: general have gotten so so large. It's like one of
Speaker 1: the biggest categories now sector wise. But the space has
Speaker 1: gotten so big that when you say, hey, okay, I
Speaker 1: want to buy an autonomous vehicle et F for CYBERSECURITYF
Speaker 1: there's so much out there that actually the performance dispersion
Speaker 1: is pretty wide. You can have a very different experience
Speaker 1: than someone else with bought a different product. So what
Speaker 1: this tries to do is cut through the middle of that, saying, yeah,
Speaker 1: there's all these different thematic products, but where's that one
Speaker 1: point where they all meet, where the highest conviction thematic
Speaker 1: picks of all these e t s And the category
Speaker 1: is so big that this actually matters. So I think
Speaker 1: over time, not only is this gonna so it's recally
Speaker 1: sited down the middle, I actually think it's gonna do
Speaker 1: better than the average because it's not just you know,
Speaker 1: it's trying to be sort of a diversified thematic thing,
Speaker 1: but the fact that it's choosing the highest conviction names,
Speaker 1: I think it's actually a little bit better than average.
Speaker 1: So I think it's just I like this product because
Speaker 1: it cuts through all that thematic performance dispersion, which is
Speaker 1: in its only forty nine basis points, it's pretty concentrated. Uh,
Speaker 1: I think those are it's a good you know, good
Speaker 1: price points. I'm gonna be honest and say that the
Speaker 1: ticker was better than your explanation. But you know that's
Speaker 1: just the brutal reality of it, and you know, don't
Speaker 1: don't don't don't read into it too much, you know,
Speaker 1: I would I would add like to throw in some
Speaker 1: of the stats that that Athan or Tom mentioned. Uh,
Speaker 1: they have a hundred James is gonna bail you out?
Speaker 1: James is gon no. I I love this pick from
Speaker 1: tom um. The sector if you can consider thematic ets
Speaker 1: a sector like Tom mentioned there, it's the second largest
Speaker 1: sector of e t s. There's a hundred and sixty
Speaker 1: one billion assets and these types of etf SO and
Speaker 1: there's we have a ton of different categories in the dashboard,
Speaker 1: and it's continually growing. It's one of the fast growing
Speaker 1: enitors of the market. So I'm definitely gonna be watching
Speaker 1: m vps as well. I believe this one also has
Speaker 1: the most overlap with arc right, didn't um what's his name, Mike,
Speaker 1: I can show that. So for Texas Harvesting, Yeah, because
Speaker 1: I'm looking Tesla Navidio um Block, these are cathy stocks Shopify.
Speaker 1: I really like products that try to cut through the noise.
Speaker 1: Where do we all agree where do all these products
Speaker 1: agree and I think there's some benefit there and just
Speaker 1: finding these really high conviction picks. Rebecca Hong Kong Holcong
Speaker 1: is doing well. Happy New Year, Happy New Year to YouTube. Okay,
Speaker 1: I want to hear your picks. Which one are you
Speaker 1: most excited about? Let's start with that one. The one
Speaker 1: I'm probably most excited about is electric vehicle. And the
Speaker 1: reason why I chose electric vehicle is that there's been
Speaker 1: a lot of growth in this sector, especially in China.
Speaker 1: So within the electrical vehicle in China, we've seen some
Speaker 1: of the ets return more than and one of the
Speaker 1: main reasons for China's growth is that they're starting from
Speaker 1: a much lower base. So Chinese electric vehicles posted greater
Speaker 1: returns than they did in the US. So, for instance,
Speaker 1: if we look at some stats like their new energy vehicle,
Speaker 1: it contributed to of the return. Looking at one year earlier,
Speaker 1: the return was only eight percent. And so the Chinese
Speaker 1: market has a lot more growth potential. And with a
Speaker 1: chip shortage easing and everyone looking for driverless cars and
Speaker 1: not autonomous technology and robotics as well as E s G.
Speaker 1: Favorite themes, I believe that electric vehicles will do really well,
Speaker 1: and the one that I picked is global X Autonomous
Speaker 1: Electric Vehicle Drive US, which captures this segment at only
Speaker 1: sixty five basis points. So the ticker is drive. Wow,
Speaker 1: that's an amazing ticker. Eric, how come we've never talked
Speaker 1: about that one before? We might have brought it up.
Speaker 1: I mean there's a couple electric vehicle e t F
Speaker 1: s out there. UM, I know, I did it once
Speaker 1: on our e t F battles with Rondo Legy and
Speaker 1: I get asked a lot about electric vehicle ets. It's
Speaker 1: one of the most pop That and Bitcoin are the
Speaker 1: probably the two most questions I get for like regular people. Um,
Speaker 1: I think people have seen non Tesla car companies get
Speaker 1: into electric vehicles and they're like, you know, this is
Speaker 1: it's going to take over. They can see Tesla a
Speaker 1: little electric pumps showing up at the wah wah or
Speaker 1: the seven eleven or whatever, and they're like, this is
Speaker 1: really happening. So I agreat. I think this is a
Speaker 1: big theme. I think some of these stocks though you
Speaker 1: probably find other funds, but for the most part, I
Speaker 1: think this is exactly why theme ets were invented. Electric
Speaker 1: vehicles is definitely has a bright future. Okay, Number two.
Speaker 1: Number two is metaverse. Everyone's heard of metaverse. But one
Speaker 1: of the things that's interesting is that the metaverse ets
Speaker 1: actually started a lot longer before Facebook rebranded to meta
Speaker 1: and so I may have predicted that the metaverse e
Speaker 1: t F universe may reach eight billion by four which
Speaker 1: might be a little bit aggressive, but we've had a
Speaker 1: lot of progress since that. And so even in Asia,
Speaker 1: in Korea, we had four metaverse ets launch on the
Speaker 1: exact same day, and two of the e t F
Speaker 1: Sampson and Maria, managed to reach more than one hundred
Speaker 1: million in only six days, which is very quick for
Speaker 1: reaching a hundred million. And so the metaverse et F
Speaker 1: has surpassed more than two point three billion in December,
Speaker 1: and so I think that there's a lot of growth opportunity,
Speaker 1: and I know a lot of other regions, for instance,
Speaker 1: in Hong Kong, Taiwan, Singapore, they're looking to launch metaverse
Speaker 1: e t s as well this year. So the US
Speaker 1: is leading the race at more than one point four
Speaker 1: billion in assets under management round Hill Balls Metaverse et
Speaker 1: F meta US leads the pack in terms of having
Speaker 1: the largest assets under management, but there are other ETFs
Speaker 1: that are going to join and I see that a
Speaker 1: lot more et fish where is jumping in on the
Speaker 1: bandwagon for metaverse products? Okay, and of course if you
Speaker 1: want to learn more about this metaverse space, we did
Speaker 1: a great episode with Rebecca and Matt Ball, who is
Speaker 1: the brain behind the Meta e t F. So you
Speaker 1: can check that out. That was just a couple of
Speaker 1: months ago. Uh yeah, I mean if one thing on
Speaker 1: Meta in the U s here that E t F.
Speaker 1: There was a four hundred and fifty ish launches last
Speaker 1: year of natural organic flows. That was the third most
Speaker 1: successful of all four fifty. That's a big feat. And honestly,
Speaker 1: they got a huge break when Facebook changed their name
Speaker 1: to Meta. That's when that was like a catalyst moment
Speaker 1: because I think they maybe might have had like sixty
Speaker 1: million now they have almost a billion. Sometimes it's good
Speaker 1: to be lucky, but they, you know what, they were
Speaker 1: ahead of the curve and that's important. You gotta be out,
Speaker 1: you gotta be in it to win it. Chill, we'll
Speaker 1: see if it wins it, but definitely have a lot
Speaker 1: of investor enthusiasm. Okay, what's next, Rebecca. The next one
Speaker 1: is cathy Woods flagship Arc innovation. A r K k
Speaker 1: U S can't talk about e t S without talking
Speaker 1: about this one the number one performing fund in but
Speaker 1: then it didn't do so well in one in, so
Speaker 1: I believe there's a lot of growth potential for it in. Ultimately,
Speaker 1: this fund tracks five areas within the technology sector, which
Speaker 1: includes DNA sequencing, robotics, energy storage, artificial intelligence, and blockchain technology.
Speaker 1: I believe that as the world becomes more dependent on technology,
Speaker 1: there's a lot of growth opportunity for this. So look,
Speaker 1: ARC has come down to earth a bit um, you know,
Speaker 1: down since February. It had to happen. It was up
Speaker 1: too much. I think everybody saw it was like, how
Speaker 1: on Earth could have fund returned this much in a
Speaker 1: year um, and I think over five years though it's
Speaker 1: still an annualized return of like I mean, that's ridiculous.
Speaker 1: But a lot of people came in at the high,
Speaker 1: so some people are underwater. It's ongoing controversy, but the
Speaker 1: fact is not a lot of people left the fund,
Speaker 1: and I think the reason for that is again, they
Speaker 1: have cheap beta. They've got all the serious investor fundamentally
Speaker 1: sound stocks covered in their cheap beta. Part of their portfolio,
Speaker 1: so they already own all that stuff, because that's what
Speaker 1: people ding Cathew on their Oh you you own all
Speaker 1: these nonprofitable crazy stocks. But most people are like, yeah,
Speaker 1: that's a feature, not a bug, because I already owned
Speaker 1: the fundamental stuff. I want Kathy for that potential huge payoff,
Speaker 1: the dreamers kind of stocks and you know that asymmetric
Speaker 1: return potentially, and I think they buy into her five
Speaker 1: year a plan. I mean she's basically said this is
Speaker 1: going to take a little while, and um, I think
Speaker 1: you know, her personality is also a big part of it.
Speaker 1: So it's really interesting that people haven't left, and I
Speaker 1: think Cathy would and ARC will be around for a
Speaker 1: long time. If you cannot see outflows after draw down,
Speaker 1: that is a really really good sign. Okay, Rebecca, last pick,
Speaker 1: your last pick. My last pick is going to have
Speaker 1: to be China focused. Since I am based in Hong Kong.
Speaker 1: China has had lots of difficulties in but I believe
Speaker 1: that there are pockets of growth in China in despite
Speaker 1: Beijing's regulatory crackdown straight to US relations, there are opportunities
Speaker 1: of growth and some of these include clean energy, electric vehicles, tech, healthcare,
Speaker 1: and China A shares. I'd say specifically where there's maybe
Speaker 1: the most opportunity would be within China tech and the
Speaker 1: reason for this is because it's been massively hit in
Speaker 1: hit more than fifty due to Beijing's regulatory crackdown, and
Speaker 1: the one I picked is Crane Shares CSI. China Internet
Speaker 1: k WEB. What's most interesting about k web is that
Speaker 1: despite the drop of more than fift they managed to
Speaker 1: get four billion dollars worth of inflows, and so more
Speaker 1: than of the assets under management came in as the
Speaker 1: fund was dropping, and so there's a lot, ultimately a
Speaker 1: lot of people looking to invest into China technology and
Speaker 1: this is a great et f for that, and the
Speaker 1: thesis here being that it won't get worse. We believe
Speaker 1: that China's technology sector has already been hit a lot
Speaker 1: and that there will be a rebound in at what
Speaker 1: time It's to be determined. Ultimately, it is very dependent
Speaker 1: on the government. But there is still a lot of
Speaker 1: growth opportunity within the China sector and so I think
Speaker 1: that it will rebound. Yeah. And actually, Rebecca, I think
Speaker 1: the flows into k web are actually even a little
Speaker 1: more by the end of the year. I think they
Speaker 1: were like seven point five billion. That the spread between
Speaker 1: negative and plus seven billion. That that's an insane spread
Speaker 1: between performance and flows. Um as um Athanasio has put it,
Speaker 1: it's in the buy the dip hall of fame for sure.
Speaker 1: At some point these people will be rewarded. But also
Speaker 1: there's not many dips to buy anymore. I mean, everything's
Speaker 1: up all the time. It's like a utopia out there.
Speaker 1: Um and this was a huge dip for people to
Speaker 1: buy into. I can't believe k web is the biggest
Speaker 1: China et F in the US. It's past m SHI
Speaker 1: and FX and all these like broader based ones that
Speaker 1: you think would be way bigger. It's like it's like
Speaker 1: having an awful draw out was like the best thing
Speaker 1: that ever happened to it, I think within the China
Speaker 1: sector also though, there are so many Chinese ETFs that
Speaker 1: people often don't know which one to invest into, and
Speaker 1: so Crane Shares has done a well done, really good
Speaker 1: job at providing a niche exposure to the Chinese markets.
Speaker 1: And if you look at the Cream Shares product offer,
Speaker 1: they have everything from electric vehicles to clean energy to healthcare,
Speaker 1: as well as China A shares, which are really the
Speaker 1: large segments, and so there's no other ETF issue in
Speaker 1: the US that covers the China market as well as
Speaker 1: cream shares ANTI and to this point about being the
Speaker 1: hot sauce on top of cheap beta. If a lot
Speaker 1: of people are own an Emerging markets et F like
Speaker 1: i MG um, you have China covered to a large extent.
Speaker 1: But k web can actually be put on top of
Speaker 1: that because there isn't a ton of overlap between i
Speaker 1: MG or e M and k WEB. So I think
Speaker 1: k web has been a little bit of an arc
Speaker 1: as well in the way it's used in a portfolio.
Speaker 1: So I agree. Crane Chairs is a really a company
Speaker 1: doing a lot. And Ethanols just talked about the carbon
Speaker 1: et F earlier. They have a carbon credit et F
Speaker 1: coming out I believe in a couple of months as well. Okay, James,
Speaker 1: those are hard knocks to follow, no pressure. What do
Speaker 1: you got in the third quarter for US? Yeah, So
Speaker 1: the first one, I'm gonna start with his biddow, which
Speaker 1: made biggest headlines in Key four possibly the first bitcoin
Speaker 1: futures et F launch in the US, first bitcoin ETF,
Speaker 1: but unfortunately as futures I'm watching this obviously because everyone's
Speaker 1: talking about bitcoin and have been for a while, but
Speaker 1: also because, as I mentioned, attracts futures, and there's issues
Speaker 1: with futures ets involving role costs. So essentially, when you
Speaker 1: buy futures, you have to sell the current contract and
Speaker 1: buy the next one, and there's costs in doing that,
Speaker 1: and we want to watch see how much those role
Speaker 1: costs add up. Currently there are about two point seven
Speaker 1: percent and it's only about it's only been existing for
Speaker 1: two and a half months, so um, at that rate,
Speaker 1: we're gonna be overlve annual role costs to have exposure
Speaker 1: to this thing. But again, this thing does have hot,
Speaker 1: tight spreads, no commissions to trade at things like that,
Speaker 1: so we're just gonna be watching this ecosystem. I think
Speaker 1: there's there's two other et f s out there right now.
Speaker 1: There might be more of the cold bitcoin futures, and
Speaker 1: I think there could be some competition amongst like how
Speaker 1: well do they track spot bitcoin and them marketing against
Speaker 1: each other. Hey, by the way, real quick, I'm looking
Speaker 1: at the volume on biddow and it's never traded under
Speaker 1: a hundred million dollars in a day since birth. That
Speaker 1: that that there's no way that's been there's a precedent
Speaker 1: for that. Yeah, I can't think of anything. It's crazy.
Speaker 1: It's definitely a good trading vehicle. I just it's just
Speaker 1: there's definitely issues for it as as a long term
Speaker 1: holding vehicle because of those role costs that can add up. Okay,
Speaker 1: non bitcoin news, what you got for us? Okay? So
Speaker 1: the next one is going to be vote. Um Vote
Speaker 1: is Engine the Engine number one transformed five t F.
Speaker 1: This is just it basically holds the five d largest
Speaker 1: US US stocks. It charges five basis points, and it's
Speaker 1: an E s G E t F, but it doesn't
Speaker 1: do anything in its investments to be E s G.
Speaker 1: It's E s G through it's it's proxy voting, and
Speaker 1: it's basically an activist investing with money behind it. So
Speaker 1: they had they had a campaign where they want to
Speaker 1: get exon. That's when that's how Engine number one got
Speaker 1: its big name. They're doing stuff with GM and electric vehicles. Um.
Speaker 1: So this is just a whole different way to spin
Speaker 1: E s G investing that obviously, I'm gonna be watching
Speaker 1: to see how it works out. It's almost about almost
Speaker 1: a three million, it's about six seven months old. And
Speaker 1: it's been taken in money pretty consistently, two million here,
Speaker 1: three million there. Ever, since it's launched, pretty much every
Speaker 1: single week is taken in somebody. So it's it's gonna
Speaker 1: be interesting to see how this does, especially compared to
Speaker 1: the more traditional asset managers that are doing the massive
Speaker 1: exclusionary UH S G E T F strategies. Also, I
Speaker 1: like Vote as well, UH namely because with E S G,
Speaker 1: E T S you have a chance of underperforming. Here
Speaker 1: you don't. It tracts the SNP and it's van Guardian
Speaker 1: price point, so I like it. We actually interviewed the
Speaker 1: vote people UM what like six months ago droll, and
Speaker 1: they gave us a lot of information about their process.
Speaker 1: It's it was a good episode. I would go check
Speaker 1: it out if you're interested to learn more. Yep. That
Speaker 1: was with with Charlie Penner, who led the campaign against Exxon. UM. Okay, James,
Speaker 1: what else you got? So the next one I'm gonna
Speaker 1: so I'm very interested to watch how rate hedg gtfs go.
Speaker 1: There's a lot of talk about inflation. The Fed's gonna
Speaker 1: raise rates. UM. There's always this talk since basically UM
Speaker 1: people want to hedge rising rates Uh. These things have
Speaker 1: been around since then and they just haven't picked up
Speaker 1: that much in the way of assets. But that really
Speaker 1: changed in these things took in over two billion in assets.
Speaker 1: So one example that is the I G b H,
Speaker 1: the interest the I shares, interest rate hedge long term
Speaker 1: corporate bond DTF. There's also l Q d H. There's
Speaker 1: a lot of corporate bond and bond TTF that just
Speaker 1: have a hedge on them, which basically means they're shorting treasuries.
Speaker 1: So I'm gonna be watching to see if these continue
Speaker 1: to gain assets and if they are outperforming as rates rise. Um,
Speaker 1: we could see people piling up, piling on in uh
Speaker 1: in the performance chasing manner. Okay, time out of these
Speaker 1: interest rate hedge gtfs are really interesting. Obviously they need
Speaker 1: the stars to align. But I wonder if the currency
Speaker 1: hedged e t F phenomenon of what is it like wig?
Speaker 1: It was big, everybody rushed in. It took sixty billion
Speaker 1: dollars in, but then it's it's sort of stopped working
Speaker 1: and everybody pulled out. It started working again, and no
Speaker 1: one bought back in. They didn't get a second bite
Speaker 1: of the apple. I wonder if the rate hedge gtfs
Speaker 1: are tainted because of the currency hedge DTF, people who
Speaker 1: may got burnt rushing in and then realizing it doesn't
Speaker 1: outperform forever. Tom, what's your take on that. Yeah, I
Speaker 1: think that's a good point. A lot of histories and indication,
Speaker 1: whether it's the currency edge or even the arc stuff,
Speaker 1: people coming late into these products. So I think when
Speaker 1: people are going to allocate the currents to rate hedge,
Speaker 1: it will be too rate. Yeah, that's I know, that's dismal.
Speaker 1: People suck at timing. I guess that's what I essentially said.
Speaker 1: I also think that with rate hedging, the outperformance isn't
Speaker 1: as shiny ish, and so it's not going to attract
Speaker 1: as many eyeballs as it did on the international equity side.
Speaker 1: But we'll see, okay, James, let's hear it. Okay, bring
Speaker 1: it home. Yeah. So I So the next one I
Speaker 1: I talked about is f R d M, which is
Speaker 1: the Freedom one hundred Emerging Markets etf UM. I kind
Speaker 1: of view this in as similar light as I view vote.
Speaker 1: It's another play on E s G, except because when
Speaker 1: you talk about this so emerging market, China's makeup of
Speaker 1: the Emerging market index by market cap. So a lot
Speaker 1: of people talk about using e s G investing in
Speaker 1: e s G and then they just buy a broad
Speaker 1: emerging markets e t F and China is arguably doing
Speaker 1: a lot of things that would go against E s
Speaker 1: G principles, which actually it's not really arguable that they
Speaker 1: are doing a lot of things that go against the
Speaker 1: s G principle. And what this what this e t
Speaker 1: F does is it kind of ranks countries and they
Speaker 1: scores them by like protector how they protect life, liberty
Speaker 1: and property rights, so human rights, economic freedoms, things like that.
Speaker 1: So China gets booted out of this e t F.
Speaker 1: There's a few other countries they have booted out. It's
Speaker 1: just a different play and emerging markets exposure. It's kind
Speaker 1: of like an E s G exposure to emerging markets.
Speaker 1: UM So I'm going to be very interested to see
Speaker 1: how this does going forward. It's a crossed over a
Speaker 1: hundred million just recently. Um So that's another thing we're
Speaker 1: watching again, a tilt on E s G. Again, we
Speaker 1: had Perth toll On who started f R d M,
Speaker 1: who grew up in China. Um we had her on
Speaker 1: before she was cool too, where she got you know popular. Uh,
Speaker 1: this is one of her early episodes. I will say,
Speaker 1: I gotta say it's a little bit of a shame
Speaker 1: that f r d M is at a hundred million dollars,
Speaker 1: which is good, that's healthy for indie, but the black
Speaker 1: Rock x China um is like well over a billion
Speaker 1: because a lot of people are liking this trade, but
Speaker 1: they're they're doing it through the e M x China.
Speaker 1: I think f r d M actually goes a little
Speaker 1: further and says it's not just China, there's some other
Speaker 1: countries that are uh equally as bad in terms of
Speaker 1: their freedom score. But she had the idea, and it
Speaker 1: just it's kind of, I don't know, a little bit
Speaker 1: of shame that there wasn't more traction there since it
Speaker 1: seemed to be her idea originally. But that's sort of
Speaker 1: what distribution can do. I think, yeah, it's e M
Speaker 1: x C and it's over two billion now. But one big,
Speaker 1: one big thing to say is what you mentioned it
Speaker 1: f r d M does more than just screen out China,
Speaker 1: screens out a couple other countries. The other thing is
Speaker 1: e M x C is half the price. So fr
Speaker 1: d M is about forty nine BIPs and E m
Speaker 1: x C ISPs, so that's another contributing factor. Hold on,
Speaker 1: I have to see the performance of the three. Yeah,
Speaker 1: so it looks like E m x C is up
Speaker 1: eight percent, f r d M is up four point
Speaker 1: six percent, and E is down four percent for the year.
Speaker 1: So maybe E m XC has a little lecture performance,
Speaker 1: but I think it's more black Rock and the brand
Speaker 1: name and distribution. Okay, final pick James, and I think
Speaker 1: I think I know what it is from last year, right.
Speaker 1: He loves this. He can't stop thinking about it. This
Speaker 1: is it like his significant other. I honestly get more
Speaker 1: questions on this product than any other product. You can
Speaker 1: put put ten products together, and I get more questions
Speaker 1: on this one product than all those ten together. And
Speaker 1: it's it's stopped talking about your extra It's uh. It's
Speaker 1: g b T the Gray School, the Gray Scale Bitcoin
Speaker 1: trust Um. Technically it's not in e t F, but
Speaker 1: it's the biggest. It's a multi thirty billion dollar product.
Speaker 1: It's could been over forty billion UM. It's a it's
Speaker 1: a behemoth that's trades otc um, but it has huge issues.
Speaker 1: It's trading at a discount right now, there's there's some
Speaker 1: concerns around it, but what gray Scale wants to do
Speaker 1: is convert this to an e t F. Now, with
Speaker 1: the SC approving the Bitcoin Futures ETF like bid, which
Speaker 1: I already talked about, has opened some avenues for Gray
Speaker 1: Scale to kind of like possibly file a lawsuit against
Speaker 1: the SEC for not treating like situations alike. Um, So
Speaker 1: we're gonna see some SEC responses to other bitcoin applications
Speaker 1: over the next few months, specifically some big ones in April,
Speaker 1: and then the GBTC decision is due July six. So
Speaker 1: over those next few months, I'm gonna be watching very
Speaker 1: closely to see what kind of language the SEC uses
Speaker 1: and how they handled the GBTC decision. We do expect
Speaker 1: them to deny it, but if they do deny it,
Speaker 1: I would, honestly I expect Gray Scale to possibly file
Speaker 1: and a lawsuit citing a a p A violation. Yeah. Look,
Speaker 1: the lure here for GBTC is that it's premium. So
Speaker 1: if and when it gets SEC says you can convert,
Speaker 1: that's instant profit. I mean, you should be made whole
Speaker 1: pretty quickly, and that's what people But it's just a
Speaker 1: question of how long GIF to weight guys, I don't
Speaker 1: think ENS is going to approve a spoty TF while
Speaker 1: he's in office. That's my new thing. I'm pretty well
Speaker 1: A lawsuit could could James, but it also could agitate
Speaker 1: because um Gray gray Scale has a couple of these
Speaker 1: products which arguably the SEC could like look at because
Speaker 1: they aren't you know, they aren't really that functionally good.
Speaker 1: I mean they had they traded wide prims and discounts.
Speaker 1: So do you want to I mean, I look, I'm
Speaker 1: all four. I think the SEC should approve this stuff.
Speaker 1: The lawsuit does it great? I just if I was
Speaker 1: an issuer, I don't know if I'd want to agitate
Speaker 1: them like that. I don't know. It's a fascinating The
Speaker 1: one O. The one other thing I would say is
Speaker 1: it's more than just twenty two, so it's at a discount. Theoretically,
Speaker 1: if it par is one hundred and it's trading at
Speaker 1: seventy eight, to go from seventy to a hundred is
Speaker 1: almost a thirty percent increase, not a increase, So it's
Speaker 1: it actually is more than the discount when it goes
Speaker 1: back to whatever NAV would be if it does get
Speaker 1: approved but again, I don't think it's happening in two,
Speaker 1: but I'm going to be watching very closely for what
Speaker 1: the SEC says over the next six months. All right,
Speaker 1: thanks James. That's five plus four plus five is is
Speaker 1: let to do that fourteen to get to two. We
Speaker 1: need eight more, so Eric, I guess you're on the
Speaker 1: hook for for eight. Let's go. Yeah. We we just
Speaker 1: hired two new people, but they're not up and writing yet,
Speaker 1: so next year they're going to handle this. So I
Speaker 1: took double load. Uh, because you know that's what you
Speaker 1: gotta do sometimes, you know, you gotta alright, alright, alright,
Speaker 1: big man, let's hear it and then we'll we'll decide
Speaker 1: how how great these ideas are. Okay, you want that?
Speaker 1: You want the shiny ones first or the boring ones first?
Speaker 1: I mean the boring ones first. Like Tom did a
Speaker 1: you know, set the table there by giving us some joking.
Speaker 1: Tom's okay, okay, go ahead quickly. T LT long dated
Speaker 1: Treasury is probably the most boring thing out there. But
Speaker 1: when the market sells off the stock market, these t
Speaker 1: l T is the one of the best all natural
Speaker 1: organic hedges out there. Almost every time the markets we
Speaker 1: look back, it almost offsets all your stock classes. It's
Speaker 1: the hedge that bitcoin and gold can only dream of being.
Speaker 1: In fact, gold is like us what it is. It's
Speaker 1: usually like flat. Bitcoin goes down worse than the market.
Speaker 1: So I I really wouldn't I went back and ran
Speaker 1: this state. I would look at bitcoin or crypto as
Speaker 1: a high beta stock, not a hedge, and maybe not
Speaker 1: even a store of value. Although James will probably get
Speaker 1: triggered by that. But I also think not that I
Speaker 1: don't like bitcoin, I just think it behaves like a
Speaker 1: high beta stock. And then t l T. I think
Speaker 1: next year, the market has gone up the last three years.
Speaker 1: That is triple what you're supposed to get historically, so
Speaker 1: we're we're like living way above our means in the
Speaker 1: S and P. So I would perceive a rougher year,
Speaker 1: and I think t LT will will will show again
Speaker 1: it's a good hedge. UM and v T I another
Speaker 1: boring one that's the Vanguard Total Market. I also picked
Speaker 1: this one last year. I think this is a perfect
Speaker 1: et F. It's fomo proof and owned small caps, midcaps,
Speaker 1: value growth, whatever is doing well, you own it, even
Speaker 1: meme stocks. And I do think overtime vt I will
Speaker 1: be the biggest t t f UM you know on
Speaker 1: the planet, probably within the next five years. It was
Speaker 1: second and flows this year and because of the securities
Speaker 1: lending and actually tracked perfectly, which means it's essentially free
Speaker 1: exposure to the whole U s enchilada. It's a beautiful thing,
Speaker 1: a modern miracle of science in a way. UM stick
Speaker 1: with TALT here because that had a down years did
Speaker 1: not do well. Right, So so you're saying that that
Speaker 1: despite going down and you know, apprehensions about what the
Speaker 1: stock market might do in two this is this will
Speaker 1: be the safe the thing that everybody. So like in
Speaker 1: two THO the market was down thirty five, TEALT was
Speaker 1: up thirty UM and then in UH and then again
Speaker 1: just last Thanksgiving or you know, like a month ago,
Speaker 1: UM the market fell I think four percent. TALT was
Speaker 1: up four percent. It doesn't always perfectly go up the
Speaker 1: same the market goes down, but it's just proven to
Speaker 1: be the best offsetter. And it's not like a derivative
Speaker 1: where like a put option or the VIX where you're
Speaker 1: constantly your insurance is corroding. This is literally just a
Speaker 1: bunch of bonds it's a long only thing, and I
Speaker 1: like the fact there's nothing weird going on. You just
Speaker 1: own a basket of bonds. So that's why I call
Speaker 1: it all natural. So yeah, I agree with that. As
Speaker 1: you mentioned, gold is more of a diversifier. It does
Speaker 1: its own thing. It never does what people expected to
Speaker 1: Bitcoin is more of a risk acid. At this point,
Speaker 1: I wouldn't argue that it's a hedge against pretty much anything.
Speaker 1: Maybe against currency debasement, but that's about it. T LT
Speaker 1: really is does act as an equity market hedge, and
Speaker 1: in times of stress it's it's boring but effective. Um okay.
Speaker 1: So another one is usm V. This is the popular.
Speaker 1: Actually Tom chose this one last year. I'm sure I'm
Speaker 1: choosing it this year. Minimum altility is such a great
Speaker 1: easy thing to sell for an advisor to their older investors.
Speaker 1: It's like, hey, it's like diet coke. You get most
Speaker 1: of the market, a little less volatility, it's a smoother ride, right,
Speaker 1: less calories. It had a rough two years, especially since
Speaker 1: Mark when the FED stepped in and saw a lot
Speaker 1: of outflows. Again, back to that second fight of the apple,
Speaker 1: Will low Vall and Menvall get a second bite at
Speaker 1: the apple. Let's say, because it's had a good December.
Speaker 1: If it keeps it going well, people come back in.
Speaker 1: And this is a great case study for that premise
Speaker 1: of how many bites of the apple do you get?
Speaker 1: More and more? I'm thinking you get one. You have
Speaker 1: your shiny object moment. People come in and then if
Speaker 1: you really let them down too much and they leave,
Speaker 1: I don't they tend not to come back even when
Speaker 1: you start doing well. And that's we'll see maybe this
Speaker 1: will overcome that. Um. And then my last one is
Speaker 1: a v d V which is the Avantis International Value
Speaker 1: e T F. Avantis is an up and coming issue.
Speaker 1: They do like smart Beta and it's cheap, so they're
Speaker 1: in the dirt cheap lane and they give you a
Speaker 1: little extra you know, smart Beta in there. Uh, they
Speaker 1: throw it in there, so it's cheap. Smart Beta International
Speaker 1: Small Cat Value is probably the most bargain basement bargain
Speaker 1: bin thing you can find on on the earth. Right.
Speaker 1: The pe of this thing I think is ten. Okay,
Speaker 1: Like if anything were to lead the charge of a
Speaker 1: regime change of value, I would look for this. This
Speaker 1: isn't just small cat value, it's international small Cat value.
Speaker 1: So it's sort of the canary in the coal mine.
Speaker 1: But if it pops, this thing should pop a lot.
Speaker 1: So I'm watching it to see if we will get
Speaker 1: some people looking at the beat up stuff. Since the
Speaker 1: SNP had such a good run, maybe values time is
Speaker 1: is finally arrived. Okay, So GLT USB, M v T
Speaker 1: I A V d V those are your boring picks.
Speaker 1: Let's get to the spicy stuff. Sure so C t
Speaker 1: RU which is the it's see through, it's the trans
Speaker 1: arc transparency. So one of my big problems with E
Speaker 1: S G is that it's trying to replace something like
Speaker 1: V T I and who in the hell wants to
Speaker 1: give up their cheap beata and and put in something
Speaker 1: that could underperform that costs more. It's just that's just
Speaker 1: a tough sell. But Arc sells hot sauce, and now
Speaker 1: what they're doing is they're making E SG hot sauce.
Speaker 1: It's largely the G but it's looking at the most
Speaker 1: transparent companies and it's picking one and equal waiting them.
Speaker 1: Equal waiting is like a legal performance enhancing drug itself,
Speaker 1: so you're basically jacking up the ball on purpose. So
Speaker 1: this could be used as a way to compliment v T. I.
Speaker 1: I'm very bullish on things complementing, not competing with Vanguard,
Speaker 1: and this would be an e s G way to
Speaker 1: do it. It will need the performance, but I'm watching it. Okay,
Speaker 1: that's pretty good hot sauce. Another one is c O
Speaker 1: p X, which is the Global X Copper Miners. This
Speaker 1: is a fascinating story. This thing lived in oblivion for
Speaker 1: like eleven years. It had a hundred million dollars, Like
Speaker 1: no one gave a crap about this thing. All of
Speaker 1: a sudden inflation hit where he's hit, and copper is
Speaker 1: something you buy if you're worried about inflation. It's a
Speaker 1: good it's a good hedge. And this thing now has
Speaker 1: well over a billion dollars. It's it's amazing. It hung
Speaker 1: on normally need TF throws in the towel after four
Speaker 1: or five years, little loone ten. So it's I like
Speaker 1: the fact that it's on its way up. Um. The
Speaker 1: other thing is not only is copper and inflation hedge,
Speaker 1: but it's like a risk on inflation hedge, and the
Speaker 1: copper is also going to be used in a lot
Speaker 1: of renewables and the sort of move to get to
Speaker 1: net zero copper is a big So there's a couple
Speaker 1: things kind of all coming together for for this play,
Speaker 1: I think, And luckily global x did not liquidated, and
Speaker 1: so it's gonna be interesting to see it's one point
Speaker 1: seven billion dollars and it was like two million like
Speaker 1: sixteen months ago. So so the other thing that copy
Speaker 1: miners are good for is basically economic economic recovery or activity.
Speaker 1: So this thing was a reopening trade as well, so
Speaker 1: it's hit a whole bunch of things that reopening, inflation,
Speaker 1: all the things I mentioned. So it's been like in
Speaker 1: the crosshairs of a bunch of bunch of news stories
Speaker 1: over the last few months or years. Even at this point, Joel,
Speaker 1: it's stars have aligned, and that's these things with these
Speaker 1: niche products, they may have to wait ten years for
Speaker 1: that right moment, and and this thing it seems to
Speaker 1: have come because people do feel like things are okay there,
Speaker 1: the Feds got their back, they're feeling like risk is on,
Speaker 1: but they're definitely worried about inflation. So that's a really
Speaker 1: that is the stars aligning for something like a copper
Speaker 1: miners etf Anyway, so we'll see you're strong, strong, thank
Speaker 1: you since you're naturally biased against me. The fact that
Speaker 1: you said strong, I'm gonna actually times that by two
Speaker 1: and be like you must be really bowled over. Okay, Um.
Speaker 1: Next next is bits, So bits is like you know,
Speaker 1: bid oh, James said. The problem is the roll cost
Speaker 1: Bits basically is half bitcoin miners like blockchain stocks, and
Speaker 1: half bitcoin futures. But it's also the futures in the
Speaker 1: middle of the curve, and there's less roll costs. So
Speaker 1: I did the calculation here, and you're only gonna look
Speaker 1: at two or three percent roll costs a year probably,
Speaker 1: and you get more kicked than you if you buy
Speaker 1: a blockchain bitcoin mining EMTF. So it's kind of trying
Speaker 1: to get the best too, best of both worlds. Because
Speaker 1: I don't think advisors are gonna be comfortable with a
Speaker 1: fift annual role costs. I just think it's too much,
Speaker 1: and there's a big variable it could be more this.
Speaker 1: I think they're like, well, look, I know the role
Speaker 1: costs won't be that much. It's middle of the curve,
Speaker 1: it's only half the fund. I think this is a
Speaker 1: safer bet for advisor as well. Gensler does nothing in
Speaker 1: order in you know why the spot et F just
Speaker 1: sits on ice. We'll see. I don't know, but I
Speaker 1: do see this as being something that could appeal long term,
Speaker 1: and I like the innovation from a global x on
Speaker 1: that one. Yeah, I would chime in and just say
Speaker 1: that the blockchain and crypto thematic et F world is
Speaker 1: now over. It's over two billion dollars despite having a
Speaker 1: decent sized draw down over the last month, just because
Speaker 1: bitcoin has also fallen. But there's fourteen e t s
Speaker 1: already in their fifteen actually the ones launching very soon.
Speaker 1: So um, it's very competitive market to be in. But
Speaker 1: it's I agree with Eric, It's it's kind of hitting
Speaker 1: all these different areas that advisors might like, especially for
Speaker 1: advisors who don't like the roll costs of bidd oh
Speaker 1: and do want exposure to bitcoin, and there's no spot
Speaker 1: Bitcoin ETF g BTC trades at a discount. This kind
Speaker 1: of fits a lot of different avenues that advisors want
Speaker 1: exposure to stuff. It's it's in a sweet spot. Interesting.
Speaker 1: That said, it's it's almost two months old and only
Speaker 1: eight millions, so it's I've seen this before. Sometimes an
Speaker 1: ETF can appeal to the critics like me, and yet
Speaker 1: nobody cares like the ex trackers all China E t F.
Speaker 1: All the critics were like, oh, this is the greatest,
Speaker 1: and yet nobody bought it. It's sort it's like one
Speaker 1: of those movies that like, uh, like Tree of Life
Speaker 1: with Sean Penn, where like it's like a it's like
Speaker 1: it's like a rotten tomatoes like percent and audiences. Okay,
Speaker 1: it's very I liked it, but I'm weird, but it's
Speaker 1: not a It's not like a movie that like it's
Speaker 1: going to sweep the country. Anyway, all right, your final
Speaker 1: final pick, Oh, my final one is f O v L,
Speaker 1: but I'm gonna actually put a couple fo f o
Speaker 1: v L, Deep and Q vale. These are all the
Speaker 1: deep value. These things by the most beat up US
Speaker 1: value stocks, and they're at the top of our value
Speaker 1: factor intensity score. So if and when value comes back again,
Speaker 1: these things should lead the way. And it was interesting
Speaker 1: we we made this intensity score and in Q one
Speaker 1: it perfectly matched their returns. And I think these days
Speaker 1: when people have a portfolio, if they have a V
Speaker 1: T I or a VO or an I VV in
Speaker 1: the center, like cheap beta, there would be no reason
Speaker 1: to buy a water down value et F. It would
Speaker 1: make no sense because you you own a lot of
Speaker 1: those stocks in your SMP or your total market. But
Speaker 1: what would make sense is a deep value again to
Speaker 1: complement the vanguards. So in other words, one of these
Speaker 1: deep value wepps could be the future ARC. It could
Speaker 1: it's believe it or not. A deep value could be
Speaker 1: a shiny object for for three or four years. Remember
Speaker 1: small cat value lead the way in the in the
Speaker 1: two thousand's and the SMP was flat. So I keep
Speaker 1: This is the second year in a row've been watching
Speaker 1: deep value, and I have two on my list obviously,
Speaker 1: But at some point, um, I think these things are
Speaker 1: going to be hit the hit the gold mine, Tom,
Speaker 1: what do you think? No, I really like it, and
Speaker 1: I agree with the ext point And if you have to,
Speaker 1: if you're saying just how the value rotations have been lately,
Speaker 1: they've been really aggressive coming back, so I think it
Speaker 1: makes sense to go really really concentrated. It's only got
Speaker 1: something like fourty holdings. Um, so I'm a fan of
Speaker 1: the more concentrated strategies, so I think this one could
Speaker 1: do well. Value comes back very aggressively. I like, I'm
Speaker 1: gonna be watching it too. I like it an international value.
Speaker 1: It you have to be watching it at this point.
Speaker 1: I mean it's it feels my entire professional career value
Speaker 1: has been the garbage. So uh, you don't even know
Speaker 1: what it's like. Yeah, I don't. I really don't. Only
Speaker 1: from I doesn't even seem like it can happen. Yeah,
Speaker 1: I've heard tell. I've heard tell. Long ago, small cat
Speaker 1: value wasn't the worst trade of in the land far away.
Speaker 1: While it seems impossible, let me drop this number. So
Speaker 1: in in the two thousands, I j s which is
Speaker 1: small cat value was up in the decade, the SNP
Speaker 1: was down eight percent. For James, that has to seem
Speaker 1: like some kind of a fairy tale, like like like
Speaker 1: like magic, like how could that possibly have happened? But
Speaker 1: it did and it will happen again at some point anyway,
Speaker 1: So just to tell you, dreams do come true for
Speaker 1: value once in a while. James, Tom Rebecca, thanks so
Speaker 1: much for joining us on Trilliance. Thanks for listening to
Speaker 1: Trillions until next time. You can find it on the
Speaker 1: Bloomberg terminal, Bloomberg dot com, Apple podcast, Spotify, and wherever
Speaker 1: else you like to listen. We'd love to hear from you.
Speaker 1: We're on Twitter. I'm at Joel Lebershow, He's at Eric
Speaker 1: fulture Nous. This episode of Trillions was produced by Magneth Hendrickson.
Speaker 1: Francesca Levy is the head of Bloomberg podcast by the
Speaker 1: Tera to Death