WEBVTT - Vanguard Eyes Top ETF Spot over BlackRock 0:00:01.360 --> 0:00:05.720 This is Bloomberg business Week Inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.360 gloom O Business Finance and tech news. The Bloomberg Business 0:00:13.440 --> 0:00:27.600 Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:30.840 --> 0:00:32.839 All Right, I like it, I like it, I like it. 0:00:32.920 --> 0:00:35.760 The reign of Blackrock is coming to an end, at 0:00:35.840 --> 0:00:38.559 least in the seven point eight trillion dollar market for 0:00:38.680 --> 0:00:42.040 US exchange traded funds also known as et aps, which 0:00:42.080 --> 0:00:46.839 Blackrock has just dominated for decades. I know somebody who 0:00:46.920 --> 0:00:49.839 knows quite a bit about ETFs. That's none other than 0:00:49.840 --> 0:00:53.239 Bloomberg News senior markets reporter and BTV anchor Katie Graefeld. 0:00:53.479 --> 0:00:56.720 She writes all about Vanguard's rise for Bloomberg Business Week. 0:00:57.040 --> 0:00:59.120 It hits newsstands later this week, but you can read 0:00:59.160 --> 0:01:01.320 her story now in the Playomberg Terminal in at Bloomberg 0:01:01.400 --> 0:01:04.680 dot com slash BusinessWeek. Also here in our Bloomberg Interactive 0:01:04.680 --> 0:01:07.560 Broker's Studio, we got the editor of Bloomberg Business Week, 0:01:07.600 --> 0:01:10.640 Joel Weber. Joel this, I mean, come on, was this 0:01:10.760 --> 0:01:12.160 was bound to happen at some point? 0:01:13.319 --> 0:01:15.640 Yet Katie and I talk a lot about ETFs. I 0:01:15.680 --> 0:01:17.240 think from the get go, we'll just say, Larry think, 0:01:17.280 --> 0:01:20.360 if you're listening, you can reach Tim Stenovik at tst 0:01:20.480 --> 0:01:23.800 n O v ac one at Bloomberg dot That's right, 0:01:24.400 --> 0:01:25.959 this is not available yet. 0:01:26.000 --> 0:01:26.679 I'm available. 0:01:27.000 --> 0:01:30.920 But if you look at the trend line of how 0:01:31.120 --> 0:01:37.039 Vanguard has slowly, slowly, slowly risen and how black Rock 0:01:37.080 --> 0:01:40.920 has slowly slowly fallen, there will be an infection moment 0:01:41.040 --> 0:01:42.640 not too far away, right, Katie. 0:01:42.680 --> 0:01:45.240 We don't know when, we don't know what. It will 0:01:45.480 --> 0:01:48.080 probably happen, probably. 0:01:47.880 --> 0:01:50.040 In the next eighteen to twenty four months. There are 0:01:50.080 --> 0:01:52.440 some nuances there which I'm sure we'll get into. But 0:01:52.640 --> 0:01:55.040 I mean, like Joel said, this is something that the 0:01:55.120 --> 0:01:59.680 industry has been watching and waiting for for probably a decade. 0:01:59.360 --> 0:02:01.120 At this point. Take a look at the chart of. 0:02:01.200 --> 0:02:04.960 Market popcorn, A lot of popcorn, of popcorn. 0:02:05.040 --> 0:02:08.760 Yeah, we've been waiting for this one. But Vanguard has 0:02:08.800 --> 0:02:12.400 been increasing its share of the US ETF market for 0:02:12.480 --> 0:02:16.280 twenty one straight years. Just amazing growth coming out of 0:02:16.320 --> 0:02:21.040 Valley Forge, Pennsylvania and Blackrock sleepy there, sleepy yeah, a 0:02:21.040 --> 0:02:25.520 lot of trees. But Blackrock, I mean, Blackrock is still enormous. 0:02:25.600 --> 0:02:27.359 Let's just put that out there, two point five trillion 0:02:27.400 --> 0:02:30.360 dollars in US ETF assets. But their share has been 0:02:30.440 --> 0:02:33.600 dropping and dropping. Right now, it's at the lowest in 0:02:33.840 --> 0:02:37.399 at least twenty years, thirty two point five percent, Vanguard 0:02:37.440 --> 0:02:40.440 at twenty nine point five percent. That is the slimmest 0:02:40.440 --> 0:02:41.440 margin between these two. 0:02:41.680 --> 0:02:42.240 What's up with that? 0:02:42.800 --> 0:02:43.480 What's up with that? 0:02:43.639 --> 0:02:46.480 So there's a few things going on right now. Vanguard 0:02:46.680 --> 0:02:50.360 enjoys a very very loyal investor base. You think about 0:02:50.360 --> 0:02:54.440 who they appeal to, it's financial advisors, it's retail investors, 0:02:54.480 --> 0:02:56.880 not yolo retail investors. 0:02:56.280 --> 0:02:58.560 But actual mom and pop at. 0:02:58.800 --> 0:03:02.880 Bogo head, yes, exactly, and those are very sticky assets, 0:03:03.280 --> 0:03:05.560 and that type of investor base it tends to shovel 0:03:05.560 --> 0:03:08.440 in money to these funds in almost every market cycle. 0:03:08.639 --> 0:03:11.880 Actually, when things get worse, they pile in exactly, Oh, 0:03:11.919 --> 0:03:13.480 great buying opportunity, we're in. 0:03:13.680 --> 0:03:17.239 Exactly, So that's what they're going, that's what they're enjoying. 0:03:17.280 --> 0:03:19.919 They have a very loyal, sticky asset base. Whereas you 0:03:19.919 --> 0:03:23.800 think about these black rock funds, they're enormous, they're very liquid, 0:03:23.919 --> 0:03:26.680 and they're trading tools, I mean wall Street uses these 0:03:26.720 --> 0:03:28.720 and Wall Street those flows are more volatile. 0:03:28.800 --> 0:03:30.839 Well, I want to ask you about that, kittie. I too, 0:03:30.880 --> 0:03:33.880 hail from not far from Valley Forge, from Sleepy myself, 0:03:33.919 --> 0:03:36.600 so I can relate it. Always always been fascinated with 0:03:36.720 --> 0:03:42.440 Vanguard because the other reason is notoriously a cheapskate. You know, 0:03:42.560 --> 0:03:45.600 I do not want to spend more on something right, right, 0:03:45.680 --> 0:03:48.520 you can tell. But so I look at, okay, the 0:03:48.600 --> 0:03:54.400 flagshipt ETFs of both companies, you know, and Vanguard, you know, 0:03:54.880 --> 0:03:58.880 zero point three percent on the S and P five hundred. 0:04:01.120 --> 0:04:06.040 It's expense ratio point zero three right, zero, yeah, point 0:04:06.160 --> 0:04:07.600 zero three percent. 0:04:07.640 --> 0:04:09.200 Three basis points, three. 0:04:08.960 --> 0:04:12.760 Basis points for those following at home that speak on 0:04:12.840 --> 0:04:17.040 Wall Street language. So to me, it's amazing this hasn't 0:04:17.279 --> 0:04:18.360 Why has it taken so long? 0:04:18.400 --> 0:04:18.520 Like? 0:04:18.560 --> 0:04:24.719 What makes the Blackrock funds competitive at a higher management 0:04:24.760 --> 0:04:25.640 fee than Vanguard? 0:04:25.960 --> 0:04:29.040 Well, the thing is, I will say that Blackrock has 0:04:29.120 --> 0:04:31.960 been forced to sort of follow Vanguard's lead here. They've 0:04:32.000 --> 0:04:34.680 had to cut fees as well introduce their own very 0:04:35.080 --> 0:04:37.599 low fee products. You take a look at their S 0:04:37.640 --> 0:04:41.080 and P five hundred funds. The I shares one ticker 0:04:41.160 --> 0:04:46.360 IVV that also charges three basis points to match Vanguard's fee. 0:04:46.720 --> 0:04:49.360 But in terms of why, I mean. 0:04:49.279 --> 0:04:51.600 Blackrock has enjoyed this position at the top of the 0:04:51.680 --> 0:04:54.520 league table for so long, since two thousand and six. 0:04:55.320 --> 0:04:56.800 They were an early mover here. 0:04:56.640 --> 0:04:59.760 And that's really powerful in the ETF market. That first 0:05:00.000 --> 0:05:03.640 market advantage. You see it both on the issuer side 0:05:03.640 --> 0:05:06.200 and also when new product sets are introduced, when a 0:05:06.240 --> 0:05:10.920 new category is introduced, so that is in BlackRock's favor. Also, 0:05:10.960 --> 0:05:13.800 you think about some of their funds, I mean TLT, 0:05:14.040 --> 0:05:16.839 that is their long dated Treasury ETF. 0:05:16.520 --> 0:05:18.280 And you love TL. You love talking about TL. 0:05:18.520 --> 0:05:21.320 I'm talking about TLT so much because it has been insane, 0:05:21.360 --> 0:05:23.800 the volume and the fund this year has been incredible. 0:05:24.120 --> 0:05:27.800 People are shoveling so much money into this ETF this 0:05:27.920 --> 0:05:31.360 year even though I is TLT. Kind of it kind 0:05:31.400 --> 0:05:36.440 of is like these these funds that are these funds 0:05:36.480 --> 0:05:38.880 that Blackrock have a lot of them, are just capital 0:05:38.880 --> 0:05:41.960 market instruments, and that's really powerful. That's why I SPY, 0:05:42.480 --> 0:05:45.880 which charges nine basis points UH, which is the S 0:05:45.920 --> 0:05:49.479 and P five hundred tracking fund UH introduced by State Street. 0:05:49.520 --> 0:05:52.359 It's the oldest, it's the biggest, it's relatively expensive, but 0:05:52.400 --> 0:05:54.640 it's just been around for so long that's what people use. 0:05:54.720 --> 0:05:57.640 Yeah, still bigger than Vanguard's fund at more than three 0:05:57.720 --> 0:06:00.880 times the granted both are pretty cheap in the. 0:06:00.839 --> 0:06:02.839 Grand scheme of life, but I mean this is a 0:06:02.880 --> 0:06:05.480 market that's measured in basis points, so it's pretty expensive. 0:06:05.640 --> 0:06:09.360 You know, one thing that Blackrock has that Vanguard does 0:06:09.400 --> 0:06:13.279 not have. Tell me is a filing for a bitcoin ETF. 0:06:13.560 --> 0:06:14.920 I was wondering when we would get that. 0:06:15.120 --> 0:06:18.160 Well, we're here now. Everyone's favorite thing to talk about 0:06:18.200 --> 0:06:22.599 in the people's favorite thing to talk about it in 0:06:22.640 --> 0:06:25.200 this room. So if you haven't been following closely, there 0:06:25.360 --> 0:06:28.960 is no spot bitcoin ETF. But there's something like what 0:06:29.120 --> 0:06:34.359 thirteen filings something like that something I lost track. Vanguard 0:06:34.400 --> 0:06:37.760 is not one of them. So what's gonna happen if 0:06:38.520 --> 0:06:41.359 Blackrock has a moment here where they get to have 0:06:41.400 --> 0:06:43.680 a bitcoin ETF and Vanguard doesn't have one? 0:06:43.920 --> 0:06:46.240 This is so fun. I'm so glad we're talking about 0:06:46.240 --> 0:06:49.440 this because it sort of gets into the spiritual differences 0:06:49.720 --> 0:06:55.240 between Blackrock and Vanguard. Blackrock has over four hundred ETFs. 0:06:55.240 --> 0:06:57.960 That is a lot of utfs, virtually every single asset, 0:06:58.000 --> 0:07:01.560 more than anybody else pretty much. Take a look at Vanguard. 0:07:01.640 --> 0:07:04.040 Even though there's only two hundred three hundred billion dollars 0:07:04.120 --> 0:07:07.480 that separates them in AUM, Vanguard only has eighty three funds. 0:07:07.800 --> 0:07:11.160 Vanguard is not They don't even have a commodities ETF. 0:07:11.280 --> 0:07:13.200 So they're very plain vanilla. 0:07:14.040 --> 0:07:14.680 By plain vanilla. 0:07:14.720 --> 0:07:17.239 It's like hold the vanilla bean, just like straight vanilla. 0:07:17.400 --> 0:07:18.760 Yeah, exactly, exactly. 0:07:18.840 --> 0:07:23.080 And I asked Vanguard, h will you ever file for 0:07:23.120 --> 0:07:26.120 a spot bitcoin ETF? And usually it's hard to get 0:07:26.200 --> 0:07:29.920 Vanguard to say anything too fired up. They said absolutely, 0:07:29.920 --> 0:07:32.000 they have no intent to do this. The case for 0:07:32.080 --> 0:07:36.400 cryptocurrency is very weak, ki volatility, et cetera. Whereas Blackrock 0:07:36.520 --> 0:07:38.800 they are leading the charge here. A lot of people 0:07:38.840 --> 0:07:42.520 watching January to see if that spot bitcoin ETF gets approved, 0:07:42.520 --> 0:07:45.120 and if it does, that can give them a leg up. 0:07:45.440 --> 0:07:49.600 Especially if Blackrock puts their their spot pitcoin ETF into 0:07:49.600 --> 0:07:53.360 some of their model portfolios. That could be a game 0:07:53.440 --> 0:07:55.040 changer here and buy them a little bit of time. 0:07:55.480 --> 0:07:57.880 Except when Joel used to send me down to Vanguard 0:07:57.920 --> 0:08:01.720 to interview Jack Bogel, so probably ten years ago at 0:08:01.720 --> 0:08:04.880 this point, Yeah, talk about he was happy to shake 0:08:04.920 --> 0:08:06.160 things up. He would spit fire. 0:08:07.200 --> 0:08:08.840 He'd have a few things to say about the point 0:08:09.240 --> 0:08:11.800 you think, that's no intent with like the g version 0:08:11.840 --> 0:08:14.040 of what you'd get from Jack exactly. 0:08:14.600 --> 0:08:16.920 But you know, uh, Bogel never wanted to have an 0:08:16.920 --> 0:08:18.840 ETF in the first place. You know, you'd ask, you'd 0:08:18.840 --> 0:08:21.760 ask him about ETFs, and the the argument was, well, 0:08:21.760 --> 0:08:23.400 you can trade it all day, and he'd be like, 0:08:23.440 --> 0:08:25.680 why the heck would you want to do that? So exactly, 0:08:25.920 --> 0:08:28.120 So I wonder is it sort of the ghost of 0:08:28.240 --> 0:08:31.920 Bogel that's influencing Vanguard, or is it more to do 0:08:32.000 --> 0:08:35.839 with just the structure. You know, black Rock is a 0:08:35.880 --> 0:08:39.240 for profit company. It has its own stock, it has 0:08:39.280 --> 0:08:42.080 its own shareholders to answer to. Vanguard is a completely 0:08:42.080 --> 0:08:44.120 different business model. So when you talk to us about 0:08:44.160 --> 0:08:47.240 that and and does that play a role in their 0:08:47.240 --> 0:08:48.520 decisions on things like this? 0:08:48.600 --> 0:08:51.000 I think it is partly the Bogel effect. 0:08:51.080 --> 0:08:52.520 Here to name. 0:08:52.480 --> 0:08:55.840 Check a book by book called Yeah, I don't know 0:08:55.880 --> 0:08:59.000 if you know him, we can host a podcast together. 0:08:59.760 --> 0:09:03.439 He's he's not quoted in this story though erics. 0:09:03.440 --> 0:09:06.640 I mean that would be too do that, But yeah, 0:09:06.679 --> 0:09:11.320 I mean you think about again Bogel's choice words to 0:09:11.480 --> 0:09:15.079 your point. Vanguard doesn't say anything too. It's hard to 0:09:15.160 --> 0:09:18.560 rile them up. Bogel definitely was more outspoken, but yeah, 0:09:18.559 --> 0:09:19.240 he didn't have a lot of. 0:09:19.240 --> 0:09:20.239 Love for commodities. 0:09:20.360 --> 0:09:22.760 It makes sense that Vanguard doesn't have a lot of 0:09:22.800 --> 0:09:25.920 love for crypto. Again, to go back to the quote 0:09:25.960 --> 0:09:28.800 that they gave me, they say that most crypto assets 0:09:29.160 --> 0:09:32.680 they lack intrinsic economic value. They generate no cash flows. 0:09:32.720 --> 0:09:34.760 That is a biggie for Vanguard. It's the same thing 0:09:34.800 --> 0:09:38.760 with commodities not generating any cash flows. Just it's totally 0:09:39.080 --> 0:09:42.160 out of their profile that they would even venture into crypto. 0:09:43.440 --> 0:09:47.320 It seems like Blackrock might be worried about this, like 0:09:47.360 --> 0:09:50.480 you've seen this lead continue to sort of slip away. 0:09:51.120 --> 0:09:53.880 It goes back to obviously Blackrock acquired Eye Shares and 0:09:53.920 --> 0:09:57.280 that was like this amazing acquisition. Do you get a 0:09:57.320 --> 0:10:00.160 sense that BlackRock's nervous about this, about the moment that 0:10:00.200 --> 0:10:02.160 they become sort of like the number two in the 0:10:02.160 --> 0:10:02.920 ETF game. 0:10:03.360 --> 0:10:07.520 I will say that Blackrock is pretty competitive in spirit, 0:10:08.040 --> 0:10:10.959 and I think it's also to point out here even 0:10:11.000 --> 0:10:13.240 though their share is slipping, it's a case of the 0:10:13.280 --> 0:10:14.800 pie is just getting bigger. 0:10:14.840 --> 0:10:17.560 The Pie is getting much bigger, right, much bigger. He's 0:10:17.600 --> 0:10:21.560 the podcast named Trillions Trillion grows a lot. 0:10:21.720 --> 0:10:24.400 Yeah, we're up to seven point eight trillion dollars in 0:10:24.800 --> 0:10:27.679 US ETF assets, about ten trillion dollars globally. You take 0:10:27.679 --> 0:10:31.079 a look at Blackrocks US ETF assets, they're at two 0:10:31.080 --> 0:10:33.920 point five trillion dollars. That's an all time high. So 0:10:34.000 --> 0:10:35.920 it's not like blackrock is shrinking here. 0:10:35.960 --> 0:10:41.320 It's just that you have this just very. 0:10:40.760 --> 0:10:43.720 Formidable challenger in Vanguard, and also you have all of 0:10:43.760 --> 0:10:45.360 the others. I mean, you take a look at the 0:10:45.440 --> 0:10:49.199 percent of flows that are going to people outside of Blackrock, 0:10:49.240 --> 0:10:51.559 outside of Vanguard, and it's at a record high. 0:10:51.960 --> 0:10:54.160 So it's not just that people want the boring stuff that, 0:10:54.240 --> 0:10:56.400 you know, boring low fee stuff that Vanguard has. So 0:10:56.440 --> 0:11:00.400 Joel asked about the competitiveness of blackrock and if they're 0:11:00.440 --> 0:11:03.400 watching this closely, what about Vanguard does do they care 0:11:03.720 --> 0:11:04.680 if they're number one? 0:11:04.960 --> 0:11:09.240 No that I mean again, I always, as someone who's 0:11:09.240 --> 0:11:10.880 been covering this for a few years, I just love 0:11:10.920 --> 0:11:15.200 the spiritual differences between blackrock and Vanguard. Where blackrock is 0:11:15.880 --> 0:11:19.560 competitive and you know, wants to be number one, Vanguard 0:11:19.640 --> 0:11:20.640 does not care. 0:11:21.120 --> 0:11:22.200 The exact quote. 0:11:21.960 --> 0:11:24.760 That I got from them is Vanguard isn't focused on 0:11:24.800 --> 0:11:27.320 who's at top of the ETF league tables, and I 0:11:27.360 --> 0:11:30.360 believe them. So it's pretty interesting. 0:11:30.200 --> 0:11:31.000 Like league what. 0:11:32.480 --> 0:11:34.880 You watch that it has come to us. 0:11:36.000 --> 0:11:38.600 I also the spiritual difference there is, like you know, 0:11:38.720 --> 0:11:42.160 the Financial Advisor, I think is a set that really 0:11:42.240 --> 0:11:46.400 gravitates to Vanguard, whereas like more of like I probably 0:11:46.440 --> 0:11:49.680 like the trader is who I think you said earlier, 0:11:49.760 --> 0:11:51.040 yeah right, yeah, yeah. 0:11:50.840 --> 0:11:53.959 And I mean that's something that I make sure to 0:11:54.040 --> 0:11:56.360 put in every story cause it's very real. I mean, 0:11:56.640 --> 0:12:00.120 even though their share is going down, their importance on 0:12:00.200 --> 0:12:02.360 Wall Street Traders is only going up. A lot of 0:12:02.360 --> 0:12:04.880 people are using these as liquidity sleeves, et cetera, a 0:12:04.880 --> 0:12:08.400 way to get quick exposure these blackrock products because a 0:12:08.400 --> 0:12:09.559 lot of them just trade like water. 0:12:09.960 --> 0:12:13.320 Well okay, no, no, well I was gonna ask Katie. 0:12:13.360 --> 0:12:16.400 You know there's also I mean, typically traditionally when you 0:12:16.400 --> 0:12:19.600 hear ETF, you think of a passive index tracking product 0:12:20.320 --> 0:12:23.160 until the names like Kathy would come up and others 0:12:23.200 --> 0:12:27.400 who are actually running actively managed ETFs. 0:12:27.000 --> 0:12:28.240 Which has been a theme this year. 0:12:28.440 --> 0:12:31.000 Yeah, active management has had that has been one of 0:12:31.040 --> 0:12:32.360 the big takeaways of the year. 0:12:32.520 --> 0:12:34.400 Yeah. Yeah, So where do we stand with that? Are 0:12:34.440 --> 0:12:38.720 they are both of these companies losing share to providers 0:12:38.720 --> 0:12:40.040 that have more active ETFs. 0:12:40.200 --> 0:12:41.560 That's where the others come in. 0:12:41.720 --> 0:12:44.720 Can you take a look at the percent of share 0:12:44.840 --> 0:12:48.240 of flows that are going to outside of the big 0:12:48.280 --> 0:12:50.600 two and a lot of that is going to these 0:12:50.679 --> 0:12:54.240 actively managed ETFs. And I gotta say it's really interesting. 0:12:54.240 --> 0:12:57.720 Even though Blackrock likes to be number one in most things, 0:12:58.040 --> 0:13:01.520 they aren't a really huge player in the active ETF space. 0:13:01.559 --> 0:13:03.040 You take a look at their lineup again, they have 0:13:03.160 --> 0:13:06.520 over four hundred US ETFs, only thirty eight of them 0:13:06.600 --> 0:13:09.839 are actively managed, and they have launched a few rick 0:13:09.920 --> 0:13:14.280 reader for example. They're big fixed income guy, I forget 0:13:14.280 --> 0:13:17.679 his exact title, but he's very important. He launched his 0:13:17.679 --> 0:13:20.440 first ETF this year. So they're bringing out some of 0:13:20.440 --> 0:13:24.360 their star players in the ETF rapper as an active strategy. 0:13:24.360 --> 0:13:28.000 But again, these these fun these issuers, they're not known 0:13:28.080 --> 0:13:30.679 for being active managers, even though they are so huge. 0:13:30.760 --> 0:13:32.160 What do you think that it would be in the 0:13:32.200 --> 0:13:35.439 inside the tim centevik rapper, Oh god, I would. 0:13:35.160 --> 0:13:35.600 Love to know. 0:13:35.840 --> 0:13:37.560 You have aute to think about. 0:13:38.080 --> 0:13:40.320 I feel like you would be extremely sensible, and then 0:13:40.320 --> 0:13:42.520 there would be like one to five percent of your 0:13:42.520 --> 0:13:44.400 portfolio that would be absolutely bananas. 0:13:44.440 --> 0:13:46.600 Is that that Eric Baltus calls that the hot sauce? 0:13:46.760 --> 0:13:50.760 Yeah exactly. I just put a little bit of hot sauce. Yeah, 0:13:51.120 --> 0:13:52.240 you know, maybe a little bit more than you. 0:13:52.600 --> 0:13:54.240 I would love a burrito right now. Why did you 0:13:54.240 --> 0:13:54.760 bring that up? 0:13:55.120 --> 0:13:55.800 Sounds great? 0:13:56.640 --> 0:14:01.440 All right, great rat anything you know, talk about around 0:14:01.440 --> 0:14:01.720 the corner. 0:14:01.920 --> 0:14:04.640 Yeah, so this is a good piece, Katie. I didn't 0:14:04.640 --> 0:14:08.800 know we could actually talk for fourteen minutes about vanes then, 0:14:09.000 --> 0:14:10.760 but then I saw you come in the studio, and 0:14:10.760 --> 0:14:11.439 then I knew we could. 0:14:11.559 --> 0:14:13.280 I was going to ask Katie to name all four 0:14:13.360 --> 0:14:15.600 hundred black rockets go at this point. 0:14:16.080 --> 0:14:17.960 At this point, I could probably get at least one 0:14:18.040 --> 0:14:18.760 hundred of them. 0:14:19.360 --> 0:14:21.960 Hey, check out this story. It's in the upcoming issue 0:14:22.000 --> 0:14:26.080 of Bloomberg and Business Week magazine. It's available on newsstands, 0:14:26.080 --> 0:14:28.920 online and on the Bloomberg Terminal later this week, but 0:14:29.040 --> 0:14:31.160 right now you can read the story on the Bloomberg 0:14:31.240 --> 0:14:35.600 Terminal and of course at Bloomberg dot com. It's about 0:14:35.760 --> 0:14:39.320 the seven point eight trillion dollar market for US traded ets, 0:14:39.440 --> 0:14:42.040 which black Rock has dominated four decades. A big thank 0:14:42.040 --> 0:14:45.320 you to Bloomberg News senior markets recorder and BTV anchor 0:14:45.400 --> 0:14:48.040 Katie Greifeld, who writes all about it in the upcoming 0:14:48.040 --> 0:14:51.160 issue of Bloomberg Business Week. Also the editor of Bloomberg BusinessWeek, 0:14:51.240 --> 0:14:53.480 Joel Webber. Everyone here at a nice little roundtable in 0:14:53.520 --> 0:14:56.200 our Bloomberg Interactive Brokers studios. You're watching and listening to 0:14:56.280 --> 0:14:57.280 Bloomberg BusinessWeek. 0:14:58.040 --> 0:15:01.400 You're listening to the Bloomberg Business This Week podcast. Catch 0:15:01.480 --> 0:15:04.840 us live weekday afternoons from three to six Eastern Listen 0:15:04.880 --> 0:15:08.360 on Bloomberg dot com, the iHeartRadio app, and the Bloomberg 0:15:08.400 --> 0:15:11.040 Business app, or watch us live on YouTube. 0:15:12.120 --> 0:15:14.440 Well, maybe if you've been traveling internationally, you've seen these 0:15:14.440 --> 0:15:17.960 ads in airports or maybe in some international cities you've 0:15:18.000 --> 0:15:20.400 been going around in. The campaign features some of the 0:15:20.480 --> 0:15:24.400 most well known French athletes, chefs, scientists, designers and more. 0:15:25.000 --> 0:15:28.480 They chose France and they're telling you to do the same. 0:15:28.960 --> 0:15:31.600 It's all part of an international marketing effort aimed at 0:15:31.600 --> 0:15:34.800 attracting interest in and investment to France. Of course, the 0:15:34.800 --> 0:15:37.400 seventh largest economy in the world, and one that right 0:15:37.400 --> 0:15:40.680 now is trying to distinguish itself from its European peers. 0:15:41.280 --> 0:15:44.800 Olivier Besch is the Minister Delegate for Foreign Trade, Economic 0:15:44.840 --> 0:15:49.000 Attractiveness and French Nationals Abroad. It's quite the title you 0:15:49.040 --> 0:15:50.520 have there, and that's not even your full title, I 0:15:50.520 --> 0:15:52.760 should say. He joins us here in the Bloomberg Interactive 0:15:52.800 --> 0:15:54.560 Brokers studio. Olivier, how are you? 0:15:55.120 --> 0:15:57.400 Yeah, fine, good afternoon everybody. 0:15:57.480 --> 0:15:59.280 Yeah, it's good to have you with us. Why is 0:15:59.360 --> 0:16:03.760 now the right place time to launch less such a launch, 0:16:03.880 --> 0:16:06.040 launch such a big campaign internationally? 0:16:06.360 --> 0:16:10.280 Well, first of all because we had a very proper 0:16:10.320 --> 0:16:16.200 business agenda with President micro Goverdance since six years. And 0:16:16.240 --> 0:16:19.480 then we are the most attractive country in Europe for 0:16:19.480 --> 0:16:24.800 foreign investments for four years in a row. And I said, 0:16:24.880 --> 0:16:28.720 it's a party, really good time, just after the World 0:16:28.840 --> 0:16:34.240 Rudby Cup and just before the Olympics next year in Paris, 0:16:35.240 --> 0:16:42.280 to make this nation branding campaign for choosing France and 0:16:42.360 --> 0:16:45.760 say it too or investors around the world that they 0:16:45.760 --> 0:16:52.680 are pretty really welcome here in France. I think it's 0:16:53.000 --> 0:17:00.480 time to face tremendous challenges in it in Spain, in 0:17:00.640 --> 0:17:04.679 health and France is a very good place to do it. 0:17:05.480 --> 0:17:09.240 You know, Olivia, when you talk about tracking investment capital 0:17:09.560 --> 0:17:13.360 and businesses to France, sort of prioritize for us. What's 0:17:13.400 --> 0:17:15.280 at the top of that list. What would you really 0:17:15.640 --> 0:17:19.520 love to see come into France as far as investment flows. 0:17:18.920 --> 0:17:23.520 Well, we don't have really priorities. I think we have 0:17:23.560 --> 0:17:30.680 a friend's twenty thirty investment plan for innovation. The first 0:17:30.760 --> 0:17:35.920 priority in this plan is to govermnize industry, but we 0:17:35.960 --> 0:17:41.280 also have priorities in artificial intelligence, in quantum, in biotechs, 0:17:41.960 --> 0:17:51.000 to invent together twenty new biomedicines to twenty thirty, yeah, 0:17:51.200 --> 0:17:55.800 and ten to twenty twenty five. We already have four. 0:17:57.119 --> 0:18:03.840 We wanted to invest also in new energies like solar protunts, 0:18:03.960 --> 0:18:11.240 like windforms like hydrogen, and we wanted to use the 0:18:11.320 --> 0:18:16.000 new energies in mobilities to invent together the new plane 0:18:17.320 --> 0:18:22.920 maybe tomorrow hydrogen plane, electric plane, or with other proputions 0:18:23.560 --> 0:18:27.720 sustainable elevation fuel. So I think there is a lot 0:18:27.760 --> 0:18:32.120 of money in this plane to help businesses to invest 0:18:32.560 --> 0:18:37.160 in and we will be very happy if new American 0:18:37.200 --> 0:18:39.520 companies will be part of this venture. 0:18:39.680 --> 0:18:42.639 What would you say to somebody who says, you know, 0:18:44.200 --> 0:18:46.639 it would be great for us to be investors in France, 0:18:46.640 --> 0:18:49.760 but were intimidated by the regulatory environment, not just by 0:18:49.800 --> 0:18:54.359 the regulatory environment of the EU, but also of the 0:18:54.359 --> 0:18:59.200 French government. And then also, let's be frank, the labor laws. 0:19:00.760 --> 0:19:01.879 I will say no. 0:19:02.720 --> 0:19:07.200 I will tell to this person that they miss something. 0:19:07.520 --> 0:19:14.760 During the six last year, we really transform Friends. We 0:19:14.840 --> 0:19:18.440 reduce the tax burden. For instance, for twelve parate taxes, 0:19:18.480 --> 0:19:21.200 it was a thirty three point five percent, it's now 0:19:21.280 --> 0:19:28.080 twenty five percent. We cut ten maybe fifteen billion euro 0:19:29.160 --> 0:19:33.720 on tax production. We reform the labor law. It's more 0:19:33.760 --> 0:19:43.320 flexible now it's very secret, especially for job and I 0:19:43.359 --> 0:19:49.119 think we also reduce all the complexity. We simplify the 0:19:49.200 --> 0:19:56.040 administrative procedures. We have key turn sites to implant a factory. Yeah, 0:19:56.080 --> 0:19:59.879 in nine months now in France. So I think that 0:20:00.080 --> 0:20:06.879 to France in twenty fifteen, it's not Friends in twenty 0:20:07.000 --> 0:20:11.320 twenty three, so it's really time for choosing France. 0:20:11.960 --> 0:20:15.680 Well, and twenty twenty three kind of a strange year. 0:20:15.720 --> 0:20:17.680 I mean, I feel like we've had a few very 0:20:17.720 --> 0:20:21.560 strange years when it comes to global trade, geopolitics. I mean, 0:20:21.640 --> 0:20:24.560 starting with, you know, the trade wars with the US 0:20:24.600 --> 0:20:27.960 and China under the Trump administration, then the invasion of 0:20:28.040 --> 0:20:31.400 Ukraine now Israel, and I think you know, from where 0:20:31.520 --> 0:20:34.600 we're sitting, I think the assumption is that all of 0:20:34.640 --> 0:20:37.760 this has perhaps brought the US and Europe in France 0:20:37.800 --> 0:20:41.080 closer together, tightened their bonds. But I'm curious how you 0:20:41.119 --> 0:20:44.560 see it. How does France and trade and investment in 0:20:44.600 --> 0:20:49.119 France fit into this really dramatic shift in geopolitics that 0:20:49.160 --> 0:20:52.080 we've seen over the last few years. Are there opportunities 0:20:52.119 --> 0:20:55.119 more problems than opportunities, and you know, how do you 0:20:55.200 --> 0:20:57.400 navigate all of these shifting. 0:20:58.560 --> 0:21:01.399 I think you're right living in a time of shocks, 0:21:02.640 --> 0:21:09.000 sanitary shocks with COVID nineteen, then the invasion war in 0:21:09.119 --> 0:21:16.760 Ukraine from Russia now in the Middle East, and also 0:21:16.920 --> 0:21:23.400 climate chocks and maybe technologic shocks. But in this time 0:21:23.480 --> 0:21:28.800 of chocks, I think it's good first to restore the 0:21:28.880 --> 0:21:34.480 multi la terrorism and I think we have a real issue. 0:21:35.800 --> 0:21:39.720 Next February in the MC thirteen in Abuda by for 0:21:39.840 --> 0:21:45.080 the WTO we should restore the dispart settlement mechanism. It 0:21:45.400 --> 0:21:50.720 was one of the topics I spoke about with American 0:21:50.720 --> 0:21:57.680 officials yesterday in Washington. And we have also to reinforce 0:21:58.320 --> 0:22:01.960 the links between friends and United States. Europe and the 0:22:02.119 --> 0:22:08.200 United States. We should now have permanent agreement on our 0:22:08.280 --> 0:22:14.960 dispute on sustainable still and aluminium with herbus borrowing or 0:22:15.080 --> 0:22:20.920 so I think we we we really have to change 0:22:22.440 --> 0:22:28.360 our trade. We need more sustainable trade with new standards, 0:22:28.720 --> 0:22:32.160 and I think Wto is a good place to do it. 0:22:33.200 --> 0:22:39.680 But we must also reinforce the links between United States 0:22:39.680 --> 0:22:45.840 and Europe because it's not only trade, it's it's friends showing. 0:22:46.920 --> 0:22:50.520