Speaker 1: Welcome to Trillions. I'm Joel Webber and I'm Eric bel
Speaker 1: Tunas Eric, I have this show that I really like watching.
Speaker 1: And before the show I watched, I read the books
Speaker 1: Game of Thrones into it that never heard of it.
Speaker 1: I've heard of it, but I've never seen it, believe
Speaker 1: it or not. I know generally it's about I missed
Speaker 1: it out for you. I know, I heard it's amazing.
Speaker 1: I justin and the time season is going to start
Speaker 1: next month. I'm so excited for And I saw the
Speaker 1: commercial in the super Ball where ahead of Dragon. So basically,
Speaker 1: you have one month to binge Game of Thrones? Can
Speaker 1: you get through all of them? See? This is the problem,
Speaker 1: this is what what what the problem with breaking bad Wiz?
Speaker 1: For me, I I get addictive, addictive personality, so I
Speaker 1: don't have the time. I got two small children. I
Speaker 1: can to go on a bingeing thing. Yeah. So with
Speaker 1: that in mind, we want to have a Game of
Speaker 1: Thrones and fired show well, but we just it just
Speaker 1: sort of popped out. Yeah right, so moats and boats
Speaker 1: that's what we're calling this one. Yeah, this is the
Speaker 1: first time we actually built the show around just the
Speaker 1: cool sounding title. But as I thought about. I did
Speaker 1: go looking for a dragon, because dragon would have invest
Speaker 1: but we couldn't find that. There is an et F
Speaker 1: called the China Power Shares Dragon something we're gonna have
Speaker 1: to us listed China Shares anyway. I think it's called
Speaker 1: the Golden Dragons. Next time, well the investigal guy is
Speaker 1: coming on. Okay um. But we were about to blow
Speaker 1: it off. But then I was like, you know, there's
Speaker 1: moat and there's an e t F called C which
Speaker 1: is the Global Shipping e TF. So there is moats
Speaker 1: and boats and so as I thought about this, there's
Speaker 1: been a few articles that have come out lately that
Speaker 1: have just talked about how rough and brutal the e
Speaker 1: t F environment is, which of course you know I've
Speaker 1: talked about all the time. Barry riddholds at an article
Speaker 1: saying life is nasty, brutish and short for a new ETF,
Speaker 1: quoting Thomas Hobbs, I like to quote public Enemy I
Speaker 1: called a terror dom and e t F dot Com
Speaker 1: had this thing looking at how closures are now creeping
Speaker 1: up to new launches. In other words, Darwinism is just
Speaker 1: rearing its ugly head. It's hard to survive, but here's
Speaker 1: two e t f s that aren't blockbusters. They're firmly
Speaker 1: sort of in the middle class, and they're both over
Speaker 1: five years old, which is the sort of age you
Speaker 1: have to live to get to to to where all
Speaker 1: the money is. The revenue in E t f s
Speaker 1: goes to E t F or five years old. But
Speaker 1: here's the thing. Of all the E t f that
Speaker 1: have closed, there's been about nine and twenty closures, the
Speaker 1: average age is three point four years. As such, most
Speaker 1: of them cannot make that fifth birthday right, a lot
Speaker 1: of the new ones. So if you can get past
Speaker 1: that time, you don't need to be the biggest thing. Ever,
Speaker 1: there's a firm middle class about eight hundred kickers. So
Speaker 1: I looked at one that was sort of on the
Speaker 1: upper band, which is MOTE, which is two billion dollars,
Speaker 1: and one sort of on the lower band, which is
Speaker 1: c which is fifty million. So I thought, just a
Speaker 1: good episode just to drill into two E t f
Speaker 1: s that you may or may have heard of. One's
Speaker 1: more like a strategy, like an active strategy in a
Speaker 1: way in rules baith index, and the other one is
Speaker 1: sort of like a deep really not that known industry
Speaker 1: the shipping industry. So just talk about the index design,
Speaker 1: how it's going, and how these ETFs have managed to
Speaker 1: sort of like carve out a living even though winter
Speaker 1: is coming this weekend ruins moats boats and there's going
Speaker 1: to be a surprise a dragon. Okay, we're gonna talk
Speaker 1: about moat with Brandon Kshatsky. Got it, got it first try? Uh,
Speaker 1: he's at Vanek. Tell us about mote. Well, moat is
Speaker 1: a great investment concept. It's really leveraging morning Stars equity
Speaker 1: research process. That's really what goes into the ETF and
Speaker 1: what powers it's it's long term performance. It's been around
Speaker 1: since two thousand twelve, so well over a five year
Speaker 1: track record. Attracts an index created by morning Star two
Speaker 1: package essentially morning Stars equity research. So there's sell side
Speaker 1: research teams the best ideas essentially, and their research is
Speaker 1: built around owned identifying great companies, companies that they believe
Speaker 1: have a sustainable competitive advantage. That's key. That's kind of
Speaker 1: step one in their research process, and that gets to
Speaker 1: the name mote exactly. It's like which these are companies
Speaker 1: that have a moat around them effective and that Buffett
Speaker 1: put that term on the map right, isn't that his
Speaker 1: term I look for wide moat companies? Is that where
Speaker 1: it's exactly he You know, he's used the term in
Speaker 1: in annual letters. He was Fortune magazine article back in
Speaker 1: the nineties. I think might have been the first time
Speaker 1: he coined that term. So similar strategy certainly its own
Speaker 1: unique approach. So what came first the name or the
Speaker 1: E t F. Well, the beauty of this particular et F,
Speaker 1: which I mentioned has been around since two thousand twelve,
Speaker 1: is that the idea didn't start then. Um So the research,
Speaker 1: this economic mode research has been implemented by morning Star
Speaker 1: since for over over well over a decade, almost two decades,
Speaker 1: since two thousand and two. So they have embraced the
Speaker 1: concept of identifying companies with sustainable competitive vantages since then.
Speaker 1: And then they developed an index to capture some of
Speaker 1: that equity research in in in a in a trackable
Speaker 1: index fashion. That's been around live since two thousand seven.
Speaker 1: So this is a long, a long standing And what
Speaker 1: are some of them? You know, you've got companies across
Speaker 1: the game at mostly household names, you know, companies that
Speaker 1: get all of the headlines. You know, firms like Facebook
Speaker 1: all the way down to you know, materials companies, firms
Speaker 1: like Caterpillar, large household names. They skewed towards large cap
Speaker 1: the excuse exkew towards established companies, those that have been
Speaker 1: able to establish those economic motes and and build competitive
Speaker 1: advantages around there, around like you're gonna get into the
Speaker 1: Caterpillar business tomorrow with Chiganic equipment. So if you go on,
Speaker 1: if you google this, uh, morning Star has a whole
Speaker 1: like fact sheet and on their process. So I have
Speaker 1: the definitions of moats here. I guess one is high
Speaker 1: switching cost, like it costs a lot to switch to
Speaker 1: a competitor. Cost advantage. I guess you're much cheaper like Walmart.
Speaker 1: Intangible assets trademarks like Harley Davidson, and the network effect,
Speaker 1: which is firm service to become more valuable as the
Speaker 1: user base grows. Facebook effect right, which, by the way,
Speaker 1: I looked at the performance of this, it's up a
Speaker 1: hundred thirty seven percent since it launched, which is better
Speaker 1: than the SMP, which is best contributing stock Facebook, and
Speaker 1: you'd even hold that long kind of came in and out.
Speaker 1: But Facebook was on fire for a while. So how
Speaker 1: do you guys decide what's in, what's out, and how
Speaker 1: how much turnover is there. So we talked about identifying
Speaker 1: sustainable competitive advantage motes. That's essentially the foundation for this index.
Speaker 1: A morning Star produces more economic mote research, but they
Speaker 1: also produce valuation research. They are forecasting cash flows into
Speaker 1: the future to arrive at a current intrinsic value of
Speaker 1: a stock of a company, and the index at more
Speaker 1: from morning Star UH in a very repeatable way, takes
Speaker 1: all of those wide mote companies every quarter, looks at
Speaker 1: them and then allocates to those wide mote companies that
Speaker 1: are most attractively priced relative to their fair value. Because
Speaker 1: in theory, that sounds like something that shouldn't turn over
Speaker 1: that much, like if you've got a got a moten
Speaker 1: that This is anti Buffett in my opinion. So while
Speaker 1: it gets tied to Buffett, this is a pretty active strategy.
Speaker 1: The turnover per years a hundred and okay, that's that's
Speaker 1: a ton. The Vanguard Total Market Index fund turns over
Speaker 1: two percent a year three percent, So this is probably
Speaker 1: as close to active as an index based et F
Speaker 1: could possibly get. Right, Yeah, I mean that that's what's
Speaker 1: really fascinating about the strategy. It is an index strategy.
Speaker 1: It's following very transparent rules to allocate among wide mode
Speaker 1: companies on a quarterly basis. But it's leveraging morning Stars
Speaker 1: equity research process and it's a hundred plus equity research
Speaker 1: team that covers stocks globally and and without them, there
Speaker 1: isn't a strategy. So you know, it's definitely leveraging the
Speaker 1: expertise and the reputation of morning Star equity research. But
Speaker 1: why is the why is that turnover so high? Well,
Speaker 1: that's the that that speaks to the valuation side of
Speaker 1: this investment strategy. So if you were to invest in
Speaker 1: just wide moat companies as identified by their equity research team,
Speaker 1: you know, there isn't always going to be out performance,
Speaker 1: and in over long period of time, there isn't. If
Speaker 1: you just market cap weighted their entire universe of US
Speaker 1: wide mote companies a hundred and forty or so companies,
Speaker 1: generally speaking, you know in periods there are and periods
Speaker 1: there are not outperformance. But when you add that valuation
Speaker 1: component to the allocation process, that's where we have seen
Speaker 1: the significant outperformance. Eric, you mentioned the out performance since
Speaker 1: the et F has been live, but if you look
Speaker 1: back to when the index went live, the Morning Star
Speaker 1: Wide Mote Focus Index, that was two thousand seven. So
Speaker 1: this is something that's been around for over ten years.
Speaker 1: It's not a back tested strategy. It's outperformed the SMP
Speaker 1: five hundred by almost four percent annually, so since that time.
Speaker 1: This isn't a factor et F per se. But it's
Speaker 1: definitely smart data in my opinion. Um, it has a process.
Speaker 1: It's almost like an active mutual fund. It just happens
Speaker 1: to be. Everything is transparent, you can see the rules,
Speaker 1: but the rebalances are where you're hoping to pick up
Speaker 1: some uh, some return. Look, it used to have five
Speaker 1: million for a while, so it was like in the
Speaker 1: firmly in the middle class for a number of years.
Speaker 1: Then it started out perform. Now it just hit two billions,
Speaker 1: so that's sort of breaking up into the Yeah, so
Speaker 1: uh and in a case like this, this is a
Speaker 1: kind of et F where if you're if you're trying
Speaker 1: to sell it, the out performance is key. Right. If
Speaker 1: this thing underperforms, it's just gonna be harder to get looks.
Speaker 1: It's kind of to a degree, live and die on performance, right, Yeah, yeah,
Speaker 1: certainly any any investment strategy that has something behind it
Speaker 1: that's not just purely rules based or factor driven. You know,
Speaker 1: it's gonna have to prove itself. But you know what
Speaker 1: we've seen is, you know, while it sat in you
Speaker 1: know that what you referred to as the middle class
Speaker 1: for a while, it actually got off to a really
Speaker 1: great start. It hit a hundred million before before the
Speaker 1: end of the first year that it was around. So
Speaker 1: in terms of the E t F industry, that's a
Speaker 1: that's a pretty good success, knowing knowing what what a
Speaker 1: lot of issuers are going through these days, and and uh,
Speaker 1: the trajectory was going upward for for quite some time.
Speaker 1: I think it hit hit a bit of a plateau
Speaker 1: asset wise whenever we saw generally speaking across the industry
Speaker 1: some outflows from the US equity funds in fifteen sixteen.
Speaker 1: And it's continued that upward trajectory from there. And this
Speaker 1: is all despite I mean sixty five basis points is
Speaker 1: the fee it's actually nine. It's like Walmart just knocking
Speaker 1: knocking it lower. UM forty nine. You know, that's um
Speaker 1: cheaper than an active mutual fund, a little more expensive
Speaker 1: than a typical et F I think the asset weight
Speaker 1: at average GTFC has twenty one basis points. But it
Speaker 1: does show that you can have a fee over twenty
Speaker 1: or forty basis points and and carve out a living.
Speaker 1: I mean, two billion is pretty nice. This is um
Speaker 1: a product a lot of issuers are probably jealous of.
Speaker 1: If you I think you have to justify fees in
Speaker 1: any environment, I mean, no one is immune to that.
Speaker 1: That's that's clear. Um. You know, when when you think
Speaker 1: about what you're getting through the mod E t F
Speaker 1: getting access to those one plus equity analysts, all of
Speaker 1: that research they're producing, that's a lot of intellectual property,
Speaker 1: you know. And on top of that, if you look
Speaker 1: at the rankings and the performing it's not only relative
Speaker 1: to the broad market. Has it done well relative to
Speaker 1: its peers. It's as of January thirty one, in the
Speaker 1: morning Star Large Blend category, it is the number one
Speaker 1: performing fund on a three year basis. That's includes mutual funds, active, passive, smart, beta,
Speaker 1: whatever you whatever you might look at. So the morning
Speaker 1: Star category, no, No, it's okay. So I got a
Speaker 1: question though, because it sounds like these morning Star people
Speaker 1: are working really hard. What are you doing? We are
Speaker 1: are are making sure that as our mandate, we're tracking
Speaker 1: the benchmark as it's as it's presented. And you know,
Speaker 1: we work very closely with morning Star. Has been a
Speaker 1: great relationship. I've been fortunate enough to be with van
Speaker 1: X since when you know, when we were developing the CTF,
Speaker 1: working with morning started bringing this to market. So we
Speaker 1: work with the equity research scene. We have quarterly calls,
Speaker 1: quarterly webinars with that team to inform investors, make sure
Speaker 1: they know what they're getting, why they're getting it, um
Speaker 1: and we make sure that that the e t F
Speaker 1: is is running efficiently and meeting its subjective. One thing
Speaker 1: about this and about the et F structure that I
Speaker 1: think we talked about versus active is a hundred and
Speaker 1: seventy turnover a year, and yet this thing has never
Speaker 1: had a capital gains distribution. That is almost unthinkable because
Speaker 1: in the mutual fund rapper, you'd be taxed because of
Speaker 1: that turnover. Can you talk a little bit about the
Speaker 1: structural advantage. It's very much speaks to the advantage of
Speaker 1: ets in terms of a very actively traded portfolio in
Speaker 1: the in the case of Mode, it's a US equity
Speaker 1: primarily large cap strategy lends itself to potential tax efficiency.
Speaker 1: Nothing's guaranteed in the space. You know, there is definitely
Speaker 1: a potential that that an ETF can can spit off
Speaker 1: a capital game. But fortunately, despite the turnover in the strategy,
Speaker 1: the ability for an et F portfolio manager to work
Speaker 1: within the capital markets and and and particularly the primary
Speaker 1: markets to deliver in and out securities via via the
Speaker 1: in kind um creation redemption mechanism has has benefited the CTF.
Speaker 1: And you know, shareholders are certainly um benefiting from from
Speaker 1: no capital games payments since it's since its inception. Now,
Speaker 1: Mote just hit two billion, and just last year, you
Speaker 1: guys did what a lot of ETFs do when they
Speaker 1: hit one to three billion. Not a lot of them,
Speaker 1: but some of them. You spawn sequels, just like the
Speaker 1: movie business. You launched Goat and Moody, Right, these were
Speaker 1: because mode successful. You're like, hey, let's let's we had
Speaker 1: a good thing going on. Let's ride this a little bit.
Speaker 1: Um h y G did it with s h y
Speaker 1: G which is short term high yield and h y
Speaker 1: G H which is hedged, and they build little families
Speaker 1: around them. Can you talk about what Goat and mody
Speaker 1: What what are those? Yeah, so, um, it goes a
Speaker 1: little bit beyond you know, seeing a good thing going
Speaker 1: and deciding to to add to a lineup. So we've
Speaker 1: had a lot of success with Mode our US strategy,
Speaker 1: and I would imagine it's fair fairly similar for other
Speaker 1: other issuers in the marketplace. You get a lot of
Speaker 1: feedback from clients. So we had a lot of early
Speaker 1: adopters for our US Mode strategy, a lot of very
Speaker 1: strong believers in the morning Stars methodology and their approach,
Speaker 1: and they started asking about different exposures to that investment
Speaker 1: strategy across different markets. The first iteration, the first sequel,
Speaker 1: if you will, was MODI m O T I are
Speaker 1: International and uh we had some success with with with
Speaker 1: that particular offering. And again it's it's a combination of
Speaker 1: a a a warranted investment strategy that can work in
Speaker 1: different applications, but also client interest client deman. So what
Speaker 1: are some companies in that one? So you see any
Speaker 1: you know, companies across the gamut and internationally, anything from
Speaker 1: the London Stock Exchange all the way through to Australian
Speaker 1: companies that have have a pretty heavy heavy presence geographically
Speaker 1: it's very diverse, you know. It's it's across Europe Asia. Um,
Speaker 1: there's a lot of casino companies actually, and how do
Speaker 1: those get weighted? These are all weighted actually on a
Speaker 1: on an equal weighted basis, all of these industries that
Speaker 1: we're talking about that underlying Moat, Moody and Goat as
Speaker 1: your reference, they're all equally weighted, which means you're gonna
Speaker 1: get a little extra zip, you know. Equal weight it
Speaker 1: means little tilt towards the smaller size companies because it
Speaker 1: is more volatile. So that return that we've talked about
Speaker 1: does come with a little extra risk which should be noted.
Speaker 1: Um and Got, by the way, was nominated for Ticker
Speaker 1: of the Year. What is it? Um, that's what Global
Speaker 1: International us together. You know, a couple people on Twitter
Speaker 1: we were debating about this. We thought that tickers should
Speaker 1: have been reserved for something the greatest of all time. Yeah,
Speaker 1: like like I don't know what, or just off limits permanently.
Speaker 1: But um, you're lucky, you got it's a great ticker.
Speaker 1: It's nominated for Ticker the Year at the e t
Speaker 1: F Dot Comic Words. Believe it or not, there is
Speaker 1: such a thing and uh, I think I think it
Speaker 1: has a good shot. I looked at the other ones.
Speaker 1: Oh pause, p A w Z isn't there that's a
Speaker 1: that's a strong one. Head to head there, come on, go.
Speaker 1: So when you talk to institutional investors or retail investors,
Speaker 1: how are people using it in their portfolio? We have
Speaker 1: seen them using it in different ways. Um. There are
Speaker 1: a lot of investors that are using it as a
Speaker 1: replacement their core holding, of of their of their market
Speaker 1: cap indexes UM, so a replacement of the SMP. You know,
Speaker 1: the forrmants is compelling to a lot of these investors,
Speaker 1: and and it's it's fairly diversified. You know, there's currently
Speaker 1: I think there's forty nine components in the index in
Speaker 1: the e t F, So it's it's not like you're
Speaker 1: getting this complete concentrated bed on on on a particular
Speaker 1: sector or particular industry by using the CTF. There's also
Speaker 1: a lot of allocators that are are complementing that exposure.
Speaker 1: So you know, there's a whole set of investors that
Speaker 1: are not going to get away from the ultra keeap
Speaker 1: market cap weighted SMP type exposure. So you you you
Speaker 1: add a little bit of a compliment to that exposure,
Speaker 1: you might allocate that that sleeve to to mote UM.
Speaker 1: But in the third way is in the actively managed space,
Speaker 1: and we talked a little bit about that. It is
Speaker 1: more and more as we see with investors with financial
Speaker 1: advisors UM being used to replace certain actively managed slices
Speaker 1: that just over the last ten plus years unfortunately just
Speaker 1: just haven't haven't been able to meet benchmark returns within
Speaker 1: that strategy. I have a very important question, on a
Speaker 1: scale of zero to ten and being high, how big
Speaker 1: of a fan of Game of Thrones are you? I'm
Speaker 1: a I'm a pretty big fan that I'll say. I'll
Speaker 1: say between eight and nine. I'm definitely just I'm just
Speaker 1: a show guy. Um, what do you think of Eric
Speaker 1: who literally don't knows nothing about it? Well, well, I
Speaker 1: know of the show, I'm not I don't live in
Speaker 1: a like is your Amish country or something. I just
Speaker 1: I missed. I miss these things. I missed breaking bad,
Speaker 1: I missed Game of Thrones. And then once it's like
Speaker 1: four years in, I don't have time to go and
Speaker 1: I know I'm gonna get addicted. Do you think he
Speaker 1: can make a go at it and try and watch
Speaker 1: them all with a month to go, and that's pushing it.
Speaker 1: That is that is pushing. I'm gonna get kicked out
Speaker 1: of the house. I'm out of there, man, I can
Speaker 1: barely like squeeze in like a fifteen minute basketball game. Okay,
Speaker 1: Nick Khalibus. Uh, you're with Investco and you you've got
Speaker 1: the the C S E A E t F there,
Speaker 1: which is are metaphor for for boats in Game of Thrones. Yeah,
Speaker 1: and let me set this up a little bit. See
Speaker 1: is the global Shipping E t F. And if you know,
Speaker 1: MOTE was the two hundred and sixty six biggest we
Speaker 1: saw it was upper middle class. C is the undreds
Speaker 1: around biggest ETF. So there's twenty two hundreds, so it's
Speaker 1: kind of right in the middle, and it's it's a
Speaker 1: survivor um. It's inception date is two thousand ten, but
Speaker 1: it actually existed before that. It's a long, quirky story
Speaker 1: about them shutting it down temporarily to get a new advisor.
Speaker 1: But it's actually a number of years older than that.
Speaker 1: So this thing has just been around for a long time.
Speaker 1: It's got about fifty million, although it had more assets
Speaker 1: back in the day. It's had some performance struggles, but
Speaker 1: it's just a unique sort of sub industry. Uh arguably
Speaker 1: maybe a theme E t F that has just sort
Speaker 1: of been around. So, Nick, what's the vision? I think
Speaker 1: when you're looking at SE uh, it's it's providing access
Speaker 1: to a very specific, you know, sector of the market
Speaker 1: in terms of oil and gas, transport and kind of
Speaker 1: maritime um. And so people who want that exposure can
Speaker 1: get can get it from C. I think the other
Speaker 1: thing that's very interesting about is if you look at
Speaker 1: kind of how it performs and where it operates, it
Speaker 1: seems to have very high correlation to commodity prices. It
Speaker 1: likes rising interest rates, it likes a week dollar, and
Speaker 1: so from that avenue UM, I think one could also
Speaker 1: think about it as a little bit of an inflation
Speaker 1: heade if you are thinking about it more from the
Speaker 1: macro realm as opposed to maybe the specifics of shipping,
Speaker 1: because no matter what, this stuff's gonna get done, right,
Speaker 1: things are going to get shipped. You got Yeah, we're
Speaker 1: we're we're in a we're in a global trading economy,
Speaker 1: and that's for sure, stuff's got to get done, got
Speaker 1: to move. How has the trade war actually affected that?
Speaker 1: You know it's it's you see it from maybe some
Speaker 1: of the cautions from a couple of the of the
Speaker 1: companies in here. I mean, I was interesting. I was
Speaker 1: reading a little bit about the largest holding, which is
Speaker 1: a P. Moeller, and they mentioned trade as as something
Speaker 1: that was a headwind to their operation. And and so
Speaker 1: I think it's it's something that has created a certainty
Speaker 1: for the for the sector, and so I would have
Speaker 1: to term it as a negative. And if when this
Speaker 1: all gets resolved some day, I think it will will
Speaker 1: help create a little bit of a of a tail
Speaker 1: one to this sector. So one interesting thing that I
Speaker 1: thought about the ETF is that you know, it's we're
Speaker 1: not talking about passenger transport at all, right, it's just
Speaker 1: sort of materials and product, Right, Why make that distinction?
Speaker 1: Now that that's exactly right? A matter of fact, I
Speaker 1: think if you look at the rule book from the
Speaker 1: index Provider S ANDP, it's specifically it indicates this is
Speaker 1: not transporting people. It's it's transporting kind of goods and
Speaker 1: goods in commodity. And why why make that distinction and
Speaker 1: what why is that a benefit? Well, I think the
Speaker 1: distinction is really to make it more kind of you know,
Speaker 1: a focus on trade industry and not let it be
Speaker 1: kind of um, you know, kind of consumer discretionary and
Speaker 1: and and part of kind of the the the uh,
Speaker 1: you know, the what the world I want to say
Speaker 1: is kind of leisure and transportation type of of of
Speaker 1: sectors makes it more kind of unique and focused. And
Speaker 1: and I'll echo that this is definitely unique. It's um,
Speaker 1: if you look at the countries, Um, you've got the US,
Speaker 1: but then Denmark is number two. You don't see Denmark
Speaker 1: in that high in many e t f s, and
Speaker 1: then Japan, UM, South Korea, Hong Kong. But really here's
Speaker 1: the kicker, only twenty six stocks, So this is that's
Speaker 1: about as low as you'll see an E t F
Speaker 1: that's highly highly concentrated, which does I would I would
Speaker 1: guess this is probably more for a trader, not necessarily
Speaker 1: like a buy and hold investor, somebody like you said,
Speaker 1: trying to get some real targeted exposure. Yeah. I agree,
Speaker 1: it's it's more uh for somebody who's who, who's you know,
Speaker 1: looking for exposure to the sector. And then if you
Speaker 1: if you if you want to think about it as
Speaker 1: like a substitute for for maybe an inflation hedge or
Speaker 1: something that's commodity of sensitive. You could you could you
Speaker 1: could turn it on um, you could you could position
Speaker 1: it that way in a portfolio. Two. You know what
Speaker 1: E t F came out and failed, but c survived
Speaker 1: was the global fishing E t F had similar country breakdown. UM,
Speaker 1: but that didn't make it. But again see again sometimes
Speaker 1: he's targeted ETF. It's it's hard. Um. Can you talk
Speaker 1: a little bit about just an e t F like
Speaker 1: this just surviving over the years, um and just you know,
Speaker 1: whether it's assets and refluctuate above and below a hundred million,
Speaker 1: it's just hanging around. Yeah, what's the secret to its success?
Speaker 1: I think it's the it's the uniqueness in the exposure
Speaker 1: and the fact that um, you know you have there's
Speaker 1: I think there's a lot of ets that have kind
Speaker 1: of unique exposures, and I think this is one of
Speaker 1: them where you know, you may not want to make
Speaker 1: this kind of like a bet on on one name
Speaker 1: or two names, and this allows you to kind of
Speaker 1: get exposure to the basket. And you know, I think
Speaker 1: that's really how it how it survived because it's giving
Speaker 1: you access and it's doing it in a unique way,
Speaker 1: and it's it's kind of I think something that people can,
Speaker 1: you know, use to to capitalize on an idea that
Speaker 1: they may feel strongly about. On a scale of zero
Speaker 1: to ten, how it tend being high? How big of
Speaker 1: a Game of Thrones fan are you? I have to
Speaker 1: admit that I'm pretty pretty low. Okay, so you're like
Speaker 1: focused but plugged into that. Do you feel like it's
Speaker 1: like too late for you? And if you go back
Speaker 1: you just want the time? That's how I feel. Yeah,
Speaker 1: it's not too late, man, I have to get on
Speaker 1: thenation and just do like a binge blush and I'm
Speaker 1: not sure that's just easible right now. I mean, like bang,
Speaker 1: this Game of Throne is gone a little bit longer.
Speaker 1: Something else in USC has that I think is really
Speaker 1: interesting is you guys have effectively a dragon et F.
Speaker 1: What's that? Yeah, so that's the uh the Chinese Golden Dragon,
Speaker 1: and uh, the idea for this show just keeps getting
Speaker 1: better and better. You have a drag. What's the ticker
Speaker 1: for it. It's p as in Paul d J. So
Speaker 1: it's it's definitely a great way to access China. And
Speaker 1: it's been around since four and uh, you know, it's
Speaker 1: actually having pretty good performance this year. So it's something
Speaker 1: that is um you know, you might want to check out.
Speaker 1: That's because we're coming upon what's going to be a
Speaker 1: big dragon showdown in Game of Thrones, no doubt. But
Speaker 1: but what what's the premise of the e TF. So
Speaker 1: the idea of the ETF I mean, if you roll
Speaker 1: back in time is China was a little bit opaque
Speaker 1: and it was you know, it's hard to invest in
Speaker 1: a shares and so this was a way to essentially
Speaker 1: invest in China, but do it through companies that were
Speaker 1: listed on US exchanges and was spelt from kind of
Speaker 1: corporate governance standpoint that would provide a bit of extra
Speaker 1: protection to the investor and they could feel more comfortable
Speaker 1: with the with the trans transparency of the US based listing. Yeah,
Speaker 1: I remember this one back in the day. F x
Speaker 1: I came out and that was only China shares listed
Speaker 1: in Hong Kong. But if you bought that, you were
Speaker 1: missing out on the US listed China shares, which ali
Speaker 1: Baba is one. Although the Ali Baba came out way
Speaker 1: after p g J, but it was the idea. What
Speaker 1: I recall researching my book that I was told. The
Speaker 1: idea was if you own F X I and P
Speaker 1: G J, you were kind of good on your whole
Speaker 1: China because China is very hard. Yeah, but um, yeah,
Speaker 1: it's interesting. Um. This CTF also is you know, kind
Speaker 1: of in the in the same vein as the other ones.
Speaker 1: It's a survivor. It's been around since two thousand four, Um,
Speaker 1: two millions dragons. Get it done, man, they know how
Speaker 1: to do it. Yeah, to what we we've just looked
Speaker 1: at three like this game of throwne themes definitely seems
Speaker 1: to capture a lot of the Yeah, a lot of
Speaker 1: the surviving sort of firmly in the middle class type
Speaker 1: ETFs that are used for very specific purposes. All Right,
Speaker 1: Nick Calligs, thanks for joining us on Trillians. Hey, it
Speaker 1: was great talking to you. Thanks for having me. You know, Kalibus,
Speaker 1: it sounds a little bit like Callisi, but you know,
Speaker 1: just I'll leave it out there. It's just another reference.
Speaker 1: Thanks for listening to Trillians. Until next time. You can
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