1 00:00:02,520 --> 00:00:11,840 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is Masters in 2 00:00:11,920 --> 00:00:15,440 Speaker 1: Business with Barry Ritholts on Bloomberg Radio. 3 00:00:17,079 --> 00:00:20,240 Speaker 2: This week on the podcast, I have yet another extra 4 00:00:20,280 --> 00:00:24,599 Speaker 2: special guest. Zach Buckwold is chairman and chief executive officer 5 00:00:24,600 --> 00:00:28,040 Speaker 2: at Russell Investments. They run about three hundred and seventy 6 00:00:28,080 --> 00:00:31,800 Speaker 2: billion dollars. I found this to be a fascinating conversation. 7 00:00:32,520 --> 00:00:35,400 Speaker 2: Russell has been at the forefront of a number of 8 00:00:35,440 --> 00:00:42,160 Speaker 2: really interesting innovations indexing and outsourced CIO and smart beta. 9 00:00:42,320 --> 00:00:45,760 Speaker 2: They were way ahead of the rest of the investment world. 10 00:00:46,280 --> 00:00:52,360 Speaker 2: Now they're putting together really interesting active portfolios, including private investments. 11 00:00:52,960 --> 00:00:56,800 Speaker 2: They work with both wealth clients as well as institutions. 12 00:00:57,640 --> 00:00:59,680 Speaker 2: You may not know Zach's name, but he's got an 13 00:00:59,680 --> 00:01:04,679 Speaker 2: appolutely fascinating background at Blackrock, Morgan Stanley and Lehman Brothers. 14 00:01:04,959 --> 00:01:07,560 Speaker 2: I thought this conversation was fascinating, and I think you 15 00:01:07,600 --> 00:01:11,360 Speaker 2: will also with no further ado, my conversation with Russell 16 00:01:11,440 --> 00:01:17,600 Speaker 2: Investments Zach Buckwald. Zach Buckwald, Welcome to Bloomberg. 17 00:01:17,800 --> 00:01:19,360 Speaker 3: Delighted to be here, Barry, thanks for having. 18 00:01:19,240 --> 00:01:21,440 Speaker 2: Me, Thank you so much for joining us. I spoke 19 00:01:21,520 --> 00:01:25,160 Speaker 2: to your predecessor about three years ago, right after the pandemic. 20 00:01:25,640 --> 00:01:28,800 Speaker 2: But let's start talking a little bit about your background. 21 00:01:29,440 --> 00:01:33,000 Speaker 2: Undergraduate bachelor's degree at Harvard, what were you studying. 22 00:01:33,319 --> 00:01:35,800 Speaker 4: I studied English, So this was not on the docket 23 00:01:35,840 --> 00:01:37,240 Speaker 4: that I was going to have a career in finance. 24 00:01:37,319 --> 00:01:40,480 Speaker 2: Not the plan. Huh. So you come out of school 25 00:01:41,520 --> 00:01:43,360 Speaker 2: in ninety six, what was your first gig? 26 00:01:43,440 --> 00:01:45,920 Speaker 4: So out of school, I applied to law school, not 27 00:01:45,959 --> 00:01:48,080 Speaker 4: sort of knowing where I was going, and I decided 28 00:01:48,080 --> 00:01:51,000 Speaker 4: to have a little break before I went back to school, 29 00:01:51,040 --> 00:01:53,920 Speaker 4: and I got recruited by Lehman Brothers. So I spent 30 00:01:54,480 --> 00:01:58,160 Speaker 4: two years working in structured finance at Lehman Brothers. 31 00:01:58,160 --> 00:01:59,800 Speaker 3: And it became apparent to me right away. I didn't 32 00:01:59,800 --> 00:02:00,640 Speaker 3: want to become. 33 00:02:00,520 --> 00:02:03,160 Speaker 4: A corporate lawyer because I worked with lawyers and that 34 00:02:03,240 --> 00:02:04,280 Speaker 4: was that was not the job for me. 35 00:02:05,000 --> 00:02:06,640 Speaker 3: But I had a knack for it. I enjoyed it. 36 00:02:06,680 --> 00:02:08,680 Speaker 4: I always liked math, even though I was an English major. 37 00:02:08,720 --> 00:02:10,720 Speaker 4: And you know, you can find other ways to put 38 00:02:10,720 --> 00:02:13,519 Speaker 4: your writing and your reading acumen to work as well. 39 00:02:13,639 --> 00:02:16,080 Speaker 2: And I'm going to say late nineteen nineties, nobody had 40 00:02:16,120 --> 00:02:18,600 Speaker 2: any clue what was coming. A decade later. 41 00:02:18,400 --> 00:02:19,040 Speaker 3: Not at all. Now. 42 00:02:19,200 --> 00:02:21,280 Speaker 4: Lehman Brothers was a great place to start my career, 43 00:02:21,320 --> 00:02:23,200 Speaker 4: but after two years I went to Morgan Stanley and 44 00:02:23,240 --> 00:02:25,160 Speaker 4: that that's how I think of the beginning of my 45 00:02:25,200 --> 00:02:27,120 Speaker 4: career because I spent ten years at Morgan Stanley. I 46 00:02:27,160 --> 00:02:29,000 Speaker 4: was very invested in the firm and the firm was 47 00:02:29,360 --> 00:02:31,960 Speaker 4: invested in me. I learned about, you know, the capital 48 00:02:32,000 --> 00:02:34,600 Speaker 4: markets top to bottom, and I had a career there 49 00:02:34,639 --> 00:02:37,160 Speaker 4: that took me from you know, from a starting associate 50 00:02:37,240 --> 00:02:40,000 Speaker 4: role to running a business that became a CLO business, 51 00:02:40,040 --> 00:02:41,880 Speaker 4: which now is like a real, you know, really important 52 00:02:41,880 --> 00:02:42,720 Speaker 4: part of capital markets. 53 00:02:42,840 --> 00:02:44,600 Speaker 2: What were your titles there? What'd you do there? 54 00:02:44,919 --> 00:02:45,519 Speaker 3: Yeah? 55 00:02:45,600 --> 00:02:48,520 Speaker 4: Well, I started as an associate with within fixed income. 56 00:02:48,680 --> 00:02:51,280 Speaker 4: I you know, I was in sales, I was in trading, 57 00:02:51,320 --> 00:02:53,760 Speaker 4: I was in structuring. I always worked within the credit 58 00:02:53,760 --> 00:02:57,320 Speaker 4: derivative space, and then ultimately credit derivative started getting wrapped 59 00:02:57,360 --> 00:03:00,200 Speaker 4: up in different ways and I worked on the COLO platform, 60 00:03:00,200 --> 00:03:03,320 Speaker 4: and Morgan Stanley had a leading COLO platform that by 61 00:03:03,360 --> 00:03:06,360 Speaker 4: the end of my time there, I ran. And that 62 00:03:06,520 --> 00:03:08,240 Speaker 4: was about you know, I think about the role that 63 00:03:08,280 --> 00:03:10,040 Speaker 4: clos play in the you know, in the in the 64 00:03:10,080 --> 00:03:13,680 Speaker 4: markets today. It's an enormous origination function that helps you know, 65 00:03:13,800 --> 00:03:16,160 Speaker 4: finance a lot of corporate America. 66 00:03:16,280 --> 00:03:18,480 Speaker 2: John Mack was CEO at the time. Is that right? 67 00:03:18,880 --> 00:03:20,679 Speaker 3: So I was there for Phil Purcell and I was 68 00:03:20,720 --> 00:03:21,480 Speaker 3: there for John Mack. 69 00:03:21,800 --> 00:03:26,079 Speaker 2: Wow, those are two legends in the industry. What inspired 70 00:03:26,120 --> 00:03:28,640 Speaker 2: you to head over to Blackrock? 71 00:03:29,120 --> 00:03:31,000 Speaker 4: I went to Blackrock with the guy that I was 72 00:03:31,040 --> 00:03:33,680 Speaker 4: working for at Morgan Stanley, and we created a business 73 00:03:34,000 --> 00:03:36,560 Speaker 4: that was essentially an advisory practice. This was two thousand 74 00:03:36,600 --> 00:03:38,480 Speaker 4: and eight, and Blackrock was hired to work on a 75 00:03:38,480 --> 00:03:40,840 Speaker 4: lot of these situations that were, you know, at the 76 00:03:40,840 --> 00:03:43,720 Speaker 4: start of the crisis. So we worked with the Federal Reserve, 77 00:03:43,800 --> 00:03:45,360 Speaker 4: we worked with the Treasury, a lot of the big 78 00:03:45,360 --> 00:03:49,640 Speaker 4: financial institutions that had you know, problematic portfolios. And Blackrock 79 00:03:49,720 --> 00:03:52,080 Speaker 4: was very well positioned as a byside firm, as a 80 00:03:52,120 --> 00:03:53,920 Speaker 4: company that sort of hadn't underwritten a lot of like 81 00:03:53,960 --> 00:03:55,160 Speaker 4: the problematic derivative. 82 00:03:55,920 --> 00:03:58,880 Speaker 2: I mean they did. They even have an investing banking 83 00:03:58,960 --> 00:04:00,040 Speaker 2: division back then. 84 00:04:00,080 --> 00:04:02,520 Speaker 4: Know, I mean we called it advisory, but essentially it 85 00:04:02,560 --> 00:04:04,480 Speaker 4: was like an investment banking function. I mean it was 86 00:04:04,520 --> 00:04:08,840 Speaker 4: really consultative, providing advice, running portfolio analytics, thinking about you know, 87 00:04:08,880 --> 00:04:11,280 Speaker 4: if you can separate like the liquidity crisis from the 88 00:04:11,320 --> 00:04:14,520 Speaker 4: actual credit risk and and sort of the expected cash 89 00:04:14,520 --> 00:04:16,400 Speaker 4: flows on these securities, what could you expect to get 90 00:04:16,440 --> 00:04:19,320 Speaker 4: back And we, you know, we created a roadmap for 91 00:04:19,520 --> 00:04:22,240 Speaker 4: the government on how to invest in these securities that 92 00:04:22,279 --> 00:04:24,640 Speaker 4: they took away. You know that they essentially backstopped from 93 00:04:24,640 --> 00:04:27,440 Speaker 4: these big organizations and tried to create a roadmap to 94 00:04:27,480 --> 00:04:29,559 Speaker 4: bring them back to part to repay all the tax 95 00:04:29,560 --> 00:04:33,559 Speaker 4: payers with interest. And in almost every respect over time, 96 00:04:34,240 --> 00:04:36,720 Speaker 4: the government was successful in doing that, and Blackrock really 97 00:04:36,720 --> 00:04:40,160 Speaker 4: played a very special role in creating those roadmaps. And 98 00:04:40,600 --> 00:04:42,039 Speaker 4: you know, it wasn't what I would think of as 99 00:04:42,040 --> 00:04:44,280 Speaker 4: like a highly profitable business, but in terms of like 100 00:04:44,320 --> 00:04:46,440 Speaker 4: the are that was created around Blackrock as being like 101 00:04:46,480 --> 00:04:48,800 Speaker 4: a solutions provider, you know, sort of a force for 102 00:04:48,839 --> 00:04:51,000 Speaker 4: good in the world. That's what we did, and it 103 00:04:51,040 --> 00:04:52,600 Speaker 4: was a it was a it was a great role 104 00:04:52,640 --> 00:04:52,919 Speaker 4: for me. 105 00:04:53,320 --> 00:04:57,600 Speaker 2: I recall that era that Blackrock essentially you had become 106 00:04:58,560 --> 00:05:02,400 Speaker 2: the streets bond death. Like every brokerage firm used to 107 00:05:02,400 --> 00:05:05,479 Speaker 2: have a fairly substantial bond desk, and it seemed like 108 00:05:05,760 --> 00:05:09,240 Speaker 2: Blackrock has just sucked up all that paper and all 109 00:05:09,320 --> 00:05:10,000 Speaker 2: those traders. 110 00:05:10,839 --> 00:05:13,880 Speaker 4: Well, that sounds like an HR strategy, and I don't 111 00:05:13,920 --> 00:05:16,080 Speaker 4: I don't know that I had any anything any part 112 00:05:16,080 --> 00:05:18,680 Speaker 4: of that. But there was a lot of talent, for 113 00:05:18,800 --> 00:05:20,559 Speaker 4: for sure, and there continues to be a lot of talent. 114 00:05:20,640 --> 00:05:20,800 Speaker 2: You know. 115 00:05:20,880 --> 00:05:22,919 Speaker 4: Some of those you know, some of the folks that 116 00:05:22,960 --> 00:05:26,120 Speaker 4: worked on those, you know, and those assignments are essentially 117 00:05:26,160 --> 00:05:28,560 Speaker 4: running Blackrock now. And it was you know, it was 118 00:05:28,600 --> 00:05:31,920 Speaker 4: the consultative nature of thinking about you know, think about 119 00:05:31,920 --> 00:05:34,200 Speaker 4: the challenges, how we can create solutions those challenges, think 120 00:05:34,240 --> 00:05:36,560 Speaker 4: about the aspirations and the ambitions. And you know, that 121 00:05:36,600 --> 00:05:39,000 Speaker 4: doesn't just apply to workout situations. That applies to all, 122 00:05:39,040 --> 00:05:41,160 Speaker 4: you know, kind of all the clients. And it's something 123 00:05:41,160 --> 00:05:42,599 Speaker 4: that I've tried to import, you know, in to my 124 00:05:42,640 --> 00:05:43,680 Speaker 4: current role at Russell. 125 00:05:43,880 --> 00:05:46,680 Speaker 2: So you're there for fifteen years, eventually you become head 126 00:05:46,680 --> 00:05:51,719 Speaker 2: of their institutional business. That's that's a two trillion dollar silo, 127 00:05:52,600 --> 00:05:57,200 Speaker 2: and you also helped establish Blackrock Retirement Solutions. Explain what 128 00:05:57,240 --> 00:05:57,920 Speaker 2: these groups do. 129 00:05:58,240 --> 00:06:02,040 Speaker 4: Yeah, So after after the consulting practice, I wanted to 130 00:06:02,080 --> 00:06:03,840 Speaker 4: run the insurance business at black Rock that was a 131 00:06:03,839 --> 00:06:06,560 Speaker 4: two hundred billion dollar business at the time. A little sleepy, 132 00:06:06,640 --> 00:06:07,800 Speaker 4: not you know, what I would say is like a 133 00:06:07,839 --> 00:06:12,240 Speaker 4: growth center, and it was housed with the business itself, 134 00:06:12,279 --> 00:06:16,000 Speaker 4: was housed with true insurance experts, asset liability experts, people 135 00:06:16,040 --> 00:06:18,920 Speaker 4: who really understood like the nuts and bolts of insurance companies. 136 00:06:18,960 --> 00:06:20,920 Speaker 3: And I did not have an insurance background. 137 00:06:21,600 --> 00:06:23,400 Speaker 4: And you know, for the first year, I had an 138 00:06:23,400 --> 00:06:25,359 Speaker 4: insurance guy sort of stapled to me every time I 139 00:06:25,360 --> 00:06:26,640 Speaker 4: went to a client and make sure I didn't get 140 00:06:26,640 --> 00:06:29,800 Speaker 4: out over my skis. But you know, but you know this, 141 00:06:29,920 --> 00:06:32,640 Speaker 4: being an outsider sometimes can actually really you know, help 142 00:06:32,680 --> 00:06:35,920 Speaker 4: you think, think externally about some of the things that 143 00:06:36,000 --> 00:06:39,119 Speaker 4: might be impacting the clients, the industry, of the sector, 144 00:06:39,279 --> 00:06:43,159 Speaker 4: the business itself. And early on when I was in 145 00:06:43,200 --> 00:06:45,200 Speaker 4: that role, we ran an analysis of the whole US 146 00:06:45,240 --> 00:06:47,279 Speaker 4: and insurance industry, every company that was bigger than a 147 00:06:47,279 --> 00:06:49,640 Speaker 4: billion dollars of general account assets, and we asked ourselves 148 00:06:49,760 --> 00:06:52,599 Speaker 4: the question, what are some of the external factors that 149 00:06:52,640 --> 00:06:55,279 Speaker 4: could impact these companies that they might not be expecting 150 00:06:55,360 --> 00:06:58,320 Speaker 4: or prepared for, and where could black Rock play a 151 00:06:58,400 --> 00:06:59,680 Speaker 4: role in helping. 152 00:06:59,440 --> 00:07:01,040 Speaker 3: Them deal with those kinds of challenges. 153 00:07:01,080 --> 00:07:03,400 Speaker 4: And we came up with seven situations Barry that we 154 00:07:03,400 --> 00:07:06,080 Speaker 4: thought we're going to have like seismic type impacts on 155 00:07:06,160 --> 00:07:09,520 Speaker 4: the companies, and four of them happened, and in three 156 00:07:09,560 --> 00:07:12,480 Speaker 4: of those cases Blackrock went on to play a really 157 00:07:12,520 --> 00:07:14,320 Speaker 4: big role and run the general accounts and that was 158 00:07:14,360 --> 00:07:16,080 Speaker 4: more than one hundred billion dollars of assets, and we 159 00:07:16,080 --> 00:07:18,760 Speaker 4: put on another hundred billion dollars along the way. So 160 00:07:19,000 --> 00:07:21,360 Speaker 4: that was the case where the business started growing like 161 00:07:21,640 --> 00:07:23,920 Speaker 4: very meaningfully, and I think Blackrock sort of paid a 162 00:07:23,960 --> 00:07:25,800 Speaker 4: lot of attention to that and realized, you we could 163 00:07:25,800 --> 00:07:27,920 Speaker 4: play a bigger role with these insurance companies. They're going 164 00:07:27,960 --> 00:07:30,080 Speaker 4: to do a lot more interesting things than just invest 165 00:07:30,160 --> 00:07:32,800 Speaker 4: in you know, sort of high quality fixed income. Over time, 166 00:07:32,880 --> 00:07:36,080 Speaker 4: you also had some interesting stuff happening with Apollo and 167 00:07:36,120 --> 00:07:37,920 Speaker 4: a theme they were kind of remaking the model a 168 00:07:37,960 --> 00:07:40,840 Speaker 4: little bit. And Blackrock, you know, pays a lot of 169 00:07:40,880 --> 00:07:43,280 Speaker 4: attention to what's going on in the in the outside world. 170 00:07:43,280 --> 00:07:45,600 Speaker 3: And we grew the business. 171 00:07:45,600 --> 00:07:47,720 Speaker 2: To say the very least, what are they twelve thirteen 172 00:07:47,760 --> 00:07:49,320 Speaker 2: trillion dollars now in assets. 173 00:07:49,560 --> 00:07:52,120 Speaker 3: It's a good business, to say the very least. 174 00:07:52,320 --> 00:07:55,320 Speaker 2: So ten years of Morgan Stanley, fifteen years at Blackrock, 175 00:07:56,120 --> 00:07:59,720 Speaker 2: what lessons did you take from those experiences to Russell investments. 176 00:07:59,800 --> 00:08:02,520 Speaker 4: Yeah, Well, first and foremost, it's all about the client, 177 00:08:02,560 --> 00:08:05,080 Speaker 4: and if you lose sight of that, understanding what the 178 00:08:05,080 --> 00:08:08,520 Speaker 4: client is dealing with, their challenges, their ambitions, their aspirations. 179 00:08:08,600 --> 00:08:12,560 Speaker 4: Being a consultative provider, if you start from a push 180 00:08:12,720 --> 00:08:14,800 Speaker 4: out like here are the products that I have, Here 181 00:08:14,800 --> 00:08:17,360 Speaker 4: are the things that I've done before, it almost never works. 182 00:08:17,400 --> 00:08:19,760 Speaker 4: And it also that's not the age that we're living 183 00:08:19,840 --> 00:08:22,400 Speaker 4: in today. The age that we're living in is how 184 00:08:22,400 --> 00:08:24,400 Speaker 4: can I help you achieve the outcomes that you're trying 185 00:08:24,440 --> 00:08:26,520 Speaker 4: to get to. How can I anticipate some of the 186 00:08:26,600 --> 00:08:29,200 Speaker 4: challenges that you're going to experience, How can I help 187 00:08:29,240 --> 00:08:31,120 Speaker 4: you learn from some of the things that I've seen 188 00:08:31,160 --> 00:08:33,920 Speaker 4: in the sector or the industry. And you start from 189 00:08:33,920 --> 00:08:36,960 Speaker 4: there and it builds a foundation with the client that 190 00:08:37,160 --> 00:08:39,920 Speaker 4: is just sort of irreplaceable. So that's I mean, that 191 00:08:40,000 --> 00:08:43,120 Speaker 4: was one really important learning. Now, I came into Russell 192 00:08:44,360 --> 00:08:46,440 Speaker 4: because Russell had like, first of all, it's a ninety 193 00:08:46,480 --> 00:08:47,000 Speaker 4: year legacy. 194 00:08:47,000 --> 00:08:47,960 Speaker 3: Thank you for starting with. 195 00:08:47,880 --> 00:08:50,360 Speaker 2: That nineteen thirty six. That's a lot you're coming up 196 00:08:50,360 --> 00:08:51,240 Speaker 2: on a century soon. 197 00:08:51,360 --> 00:08:54,120 Speaker 3: Yeah, exactly. I'm really proud to run. 198 00:08:54,200 --> 00:08:56,400 Speaker 4: I'm the eighth CEO by the way of in ninety 199 00:08:56,480 --> 00:08:59,199 Speaker 4: years of Russell investments. I mean that's so for US 200 00:08:59,200 --> 00:09:02,240 Speaker 4: asset manager's and I think about the things that Russell 201 00:09:02,280 --> 00:09:03,960 Speaker 4: has done in that time, Barry, I mean, it's been 202 00:09:04,000 --> 00:09:07,160 Speaker 4: a real innovator and category creator. Everybody knows the Russell indexes, 203 00:09:07,640 --> 00:09:10,160 Speaker 4: which were you know, sort of cultivated and innovated in 204 00:09:10,200 --> 00:09:12,040 Speaker 4: all sorts of cool ways, and we all have it 205 00:09:12,080 --> 00:09:14,439 Speaker 4: in our pensions in our four to one case. Uh, 206 00:09:14,480 --> 00:09:17,120 Speaker 4: you know, Russell was the original pension investment consultant. We 207 00:09:17,200 --> 00:09:20,440 Speaker 4: created that categoryus. Russell was the original o CIO and 208 00:09:20,480 --> 00:09:21,840 Speaker 4: we're still a leader. 209 00:09:21,640 --> 00:09:22,560 Speaker 3: In O CIO. 210 00:09:23,160 --> 00:09:25,440 Speaker 4: These are these are really you know, sort of important 211 00:09:25,440 --> 00:09:30,040 Speaker 4: categories that have a big impact on the investment ecosystem. 212 00:09:30,679 --> 00:09:32,960 Speaker 4: And what was what was special to me about Russell 213 00:09:33,000 --> 00:09:35,920 Speaker 4: and the reason I wanted to join is Russell's approach 214 00:09:36,000 --> 00:09:39,520 Speaker 4: to doing all of these solutions is it's entirely open architecture. 215 00:09:40,000 --> 00:09:42,839 Speaker 4: So the view is we build and implement portfolios at Russell, 216 00:09:42,840 --> 00:09:44,560 Speaker 4: which is you know, something I worked on at Blackrock 217 00:09:44,600 --> 00:09:46,120 Speaker 4: and to some extent and Morgan standly two. 218 00:09:46,600 --> 00:09:48,480 Speaker 3: But the idea is we use best of. 219 00:09:48,480 --> 00:09:51,600 Speaker 4: Breed managers and strategies from around the whole investment universe. 220 00:09:51,679 --> 00:09:54,160 Speaker 4: So if I put together an O CIO portfolio at Russell, 221 00:09:54,600 --> 00:09:56,800 Speaker 4: I'm building you know, fixed thing commandager, you know, the 222 00:09:56,800 --> 00:09:59,640 Speaker 4: best quality fixed thing come managers, the best private assets managers, 223 00:09:59,679 --> 00:10:02,680 Speaker 4: the best cash and so on, and best index products. 224 00:10:02,720 --> 00:10:04,040 Speaker 4: You know, we can kind of it's it's we can 225 00:10:04,080 --> 00:10:07,120 Speaker 4: kind of go everywhere within the ecosystem. And that was 226 00:10:07,160 --> 00:10:09,600 Speaker 4: a model that I was very excited about because it 227 00:10:09,640 --> 00:10:12,040 Speaker 4: became more about like thinking through the lens of what 228 00:10:12,080 --> 00:10:13,839 Speaker 4: the client is looking to achieve and how can I 229 00:10:13,960 --> 00:10:16,320 Speaker 4: use all of the tools and the ingredients available, as 230 00:10:16,320 --> 00:10:18,480 Speaker 4: opposed to sort of a set, you know, set of 231 00:10:18,480 --> 00:10:20,720 Speaker 4: tools that I that I had at hand from the 232 00:10:20,720 --> 00:10:21,679 Speaker 4: company that I worked for. 233 00:10:22,360 --> 00:10:26,240 Speaker 2: Really interesting. We're going to talk about pensions oci. We're 234 00:10:26,240 --> 00:10:29,520 Speaker 2: going to talk about a little later. I didn't realize 235 00:10:29,559 --> 00:10:33,240 Speaker 2: this till I started doing my homework. Russell is effectively 236 00:10:33,360 --> 00:10:37,920 Speaker 2: credited with inventing smart beta. I mean, who knew that. 237 00:10:38,440 --> 00:10:40,880 Speaker 2: I think of a couple of other firms as taking 238 00:10:40,880 --> 00:10:44,440 Speaker 2: the leadership in that recently, but forty years ago, you 239 00:10:44,480 --> 00:10:47,240 Speaker 2: guys were on the on the cutting edge of that. 240 00:10:47,880 --> 00:10:50,800 Speaker 2: What is it like running a firm that has a 241 00:10:50,920 --> 00:10:54,800 Speaker 2: near century long legacy. How does that affect how you 242 00:10:54,840 --> 00:10:57,560 Speaker 2: think about risks and opportunities. 243 00:10:58,160 --> 00:11:00,960 Speaker 4: Yeah, I mean the legacy is a wonderful thing, but 244 00:11:01,240 --> 00:11:02,599 Speaker 4: you know, you can't rest like we all know, we 245 00:11:02,640 --> 00:11:05,880 Speaker 4: can't rest on our laurels. It's you know, the job 246 00:11:05,920 --> 00:11:07,679 Speaker 4: for me is to make sure that I'm taking sort 247 00:11:07,720 --> 00:11:10,360 Speaker 4: of the best parts of the history and the legacy, 248 00:11:10,400 --> 00:11:12,720 Speaker 4: the innovative spirit, all these cool things that we've done, 249 00:11:13,480 --> 00:11:16,560 Speaker 4: and then evolving them for the world that we're in today. 250 00:11:16,760 --> 00:11:19,360 Speaker 4: Our mainline business, we have we have sort of two 251 00:11:19,480 --> 00:11:22,400 Speaker 4: central businesses. It's o Cio and its model portfolios that 252 00:11:22,400 --> 00:11:24,520 Speaker 4: we do on the retail side, which is essentially the 253 00:11:24,720 --> 00:11:26,960 Speaker 4: same kind of ideas of the institual business, building great 254 00:11:26,960 --> 00:11:30,320 Speaker 4: portfolios and implementing them. Ninety percent of our business is 255 00:11:30,400 --> 00:11:32,560 Speaker 4: those falls into those two categories. 256 00:11:32,960 --> 00:11:34,840 Speaker 3: What I need to do today is make sure that 257 00:11:34,880 --> 00:11:35,679 Speaker 3: I'm using. 258 00:11:35,640 --> 00:11:37,800 Speaker 4: All of the tools available so as the market moves 259 00:11:37,800 --> 00:11:40,480 Speaker 4: from you know, active products to passive products, as the 260 00:11:40,480 --> 00:11:44,000 Speaker 4: market starts integrating private assets with public assets, all that 261 00:11:44,120 --> 00:11:47,400 Speaker 4: is part of our portfolio today. And so the goal, 262 00:11:47,559 --> 00:11:48,960 Speaker 4: you know, as the leader is to make sure that 263 00:11:49,000 --> 00:11:52,960 Speaker 4: the strategy is incorporating We're open architecture it's truly incorporating 264 00:11:53,040 --> 00:11:55,199 Speaker 4: the entire ecosystem into the into what we build for 265 00:11:55,240 --> 00:11:55,920 Speaker 4: our clients. 266 00:11:56,040 --> 00:11:58,160 Speaker 2: I want to get your feedback on a quote of 267 00:11:58,200 --> 00:12:02,920 Speaker 2: yours I found in my in my homework quote financial 268 00:12:03,000 --> 00:12:06,920 Speaker 2: security is a central challenge for this industry. How did 269 00:12:07,000 --> 00:12:12,160 Speaker 2: your experiences at Blackrock, at Morgan Stanley, and way back 270 00:12:12,200 --> 00:12:15,760 Speaker 2: when at Lehman Brothers, how did it affect your concept 271 00:12:15,800 --> 00:12:17,040 Speaker 2: of financial security? 272 00:12:17,280 --> 00:12:20,720 Speaker 4: Financial security and retirement security especially. Took me a little 273 00:12:20,720 --> 00:12:23,120 Speaker 4: bit of time to hone in on Barry. I mean, 274 00:12:23,160 --> 00:12:26,160 Speaker 4: I think back to my years at Morgan Stanley, and 275 00:12:26,240 --> 00:12:27,880 Speaker 4: you know, the job there was very much about sort 276 00:12:27,880 --> 00:12:30,240 Speaker 4: of like finding the arbitrage in the markets. It's where 277 00:12:30,280 --> 00:12:32,520 Speaker 4: can we make money on as a sales and trading function, 278 00:12:32,559 --> 00:12:34,600 Speaker 4: and we help clients along the way, you know, by 279 00:12:34,600 --> 00:12:36,680 Speaker 4: delivering the products and the services that they want. But 280 00:12:36,720 --> 00:12:39,559 Speaker 4: first and foremost it was about the investment bank. 281 00:12:40,240 --> 00:12:42,720 Speaker 3: And that changed for me. 282 00:12:42,800 --> 00:12:45,760 Speaker 4: I had a review with my boss at the time 283 00:12:46,400 --> 00:12:49,240 Speaker 4: and she said to me something that she meant as 284 00:12:49,240 --> 00:12:52,120 Speaker 4: a compliment. She said to me, Zach, you can really 285 00:12:52,160 --> 00:12:56,880 Speaker 4: smell the money. And I went away and that was 286 00:12:56,880 --> 00:12:59,240 Speaker 4: not the legacy that I wanted from my career, and 287 00:12:59,600 --> 00:13:03,080 Speaker 4: you know, I moved to Blackrock shortly after that, where 288 00:13:03,080 --> 00:13:05,880 Speaker 4: I was helping you know, the government, the tax payers 289 00:13:05,920 --> 00:13:09,400 Speaker 4: deal with like really critical issues, like really big, thorny 290 00:13:09,440 --> 00:13:11,600 Speaker 4: problems that we're going to have an impact on, you know, 291 00:13:11,679 --> 00:13:13,600 Speaker 4: on the quality of life of the people in this 292 00:13:13,720 --> 00:13:18,040 Speaker 4: in this country. And it was a complete reset of 293 00:13:18,120 --> 00:13:22,280 Speaker 4: my perspective. You know, now we build portfolios at Russell, 294 00:13:22,440 --> 00:13:24,280 Speaker 4: but you know, if I'm working for a pension or 295 00:13:24,360 --> 00:13:26,120 Speaker 4: four one K or an insurance company, at the end 296 00:13:26,160 --> 00:13:29,040 Speaker 4: of the day, I'm serving individuals. I'm helping them, and 297 00:13:29,080 --> 00:13:30,560 Speaker 4: we don't lose sight of that. I'm helping them have 298 00:13:30,640 --> 00:13:32,080 Speaker 4: a secure retirement. 299 00:13:32,160 --> 00:13:32,400 Speaker 3: Now. 300 00:13:32,559 --> 00:13:34,000 Speaker 4: By the way, they have to do their part too, 301 00:13:34,040 --> 00:13:37,120 Speaker 4: because it's also about you know, saving early, contributing, making 302 00:13:37,120 --> 00:13:40,200 Speaker 4: sure that you're you know, learning about the plan and 303 00:13:40,200 --> 00:13:43,200 Speaker 4: making the right decisions. But the role that we play 304 00:13:43,240 --> 00:13:45,720 Speaker 4: within the industry is a make or break in terms 305 00:13:45,720 --> 00:13:48,600 Speaker 4: of whether they're able to whether they're able to achieve that. 306 00:13:49,600 --> 00:13:51,880 Speaker 4: Now you also have something going on in the background 307 00:13:52,200 --> 00:13:54,719 Speaker 4: that's that's going to have a very big impact in 308 00:13:54,760 --> 00:13:57,280 Speaker 4: the next couple of decades with retirees in America, and 309 00:13:57,440 --> 00:14:00,520 Speaker 4: that is that really the risk has shift. It now 310 00:14:01,040 --> 00:14:04,599 Speaker 4: the retirement security risk has shifted from you know, organizations 311 00:14:04,679 --> 00:14:05,760 Speaker 4: like the companies and the. 312 00:14:05,720 --> 00:14:09,599 Speaker 2: Government companies in defined benefits to define content. 313 00:14:09,440 --> 00:14:10,320 Speaker 3: Defined contribution. 314 00:14:10,520 --> 00:14:13,200 Speaker 4: Right, so the standard model, the standard pension model, is 315 00:14:13,240 --> 00:14:15,960 Speaker 4: shifting to the four to one k. And today still 316 00:14:15,960 --> 00:14:18,320 Speaker 4: about half of retirees have access to a pension and 317 00:14:18,360 --> 00:14:21,320 Speaker 4: that plus UH plus social security more or less gets 318 00:14:21,360 --> 00:14:23,920 Speaker 4: the job done. But in another decade it's going to 319 00:14:23,920 --> 00:14:25,840 Speaker 4: be less than a third, and in another two decades 320 00:14:25,840 --> 00:14:27,760 Speaker 4: it's going to be very little at all. So that 321 00:14:27,920 --> 00:14:30,360 Speaker 4: means that now the four to one K is the 322 00:14:30,360 --> 00:14:33,640 Speaker 4: staple that's going to you know, result in a secure, 323 00:14:33,720 --> 00:14:38,560 Speaker 4: comfortable retirement or or not. And you know, the big 324 00:14:38,640 --> 00:14:40,520 Speaker 4: challenge with a four to one K is that the 325 00:14:40,640 --> 00:14:45,320 Speaker 4: risk of saving, investing and also decumulation, taking that pot 326 00:14:45,360 --> 00:14:47,760 Speaker 4: of money and knowing how long you know, the longevity risk, 327 00:14:47,800 --> 00:14:49,400 Speaker 4: knowing how thinking about how long you're going to live 328 00:14:49,400 --> 00:14:51,800 Speaker 4: and how to allott it over time. All that risk 329 00:14:51,840 --> 00:14:54,600 Speaker 4: will now be borne by the individual. And we have 330 00:14:54,720 --> 00:14:57,760 Speaker 4: not fully processed that. And the you know, within within 331 00:14:57,800 --> 00:15:00,360 Speaker 4: the country that this is a crisis that's coming. People 332 00:15:00,360 --> 00:15:04,680 Speaker 4: aren't prepared to own that responsibility and the system today 333 00:15:04,960 --> 00:15:06,840 Speaker 4: isn't set up in such a way that sort of 334 00:15:06,880 --> 00:15:08,800 Speaker 4: the decisions are very easy to you know, to make. 335 00:15:08,960 --> 00:15:11,160 Speaker 4: The onus is really still on the individual. 336 00:15:11,320 --> 00:15:15,640 Speaker 2: So that's really fascinating. How does that affect what you 337 00:15:15,720 --> 00:15:18,400 Speaker 2: see within your role as CEO at Russell Investments. 338 00:15:18,480 --> 00:15:19,400 Speaker 3: Yeah, well, thanks Berry. 339 00:15:19,400 --> 00:15:23,000 Speaker 4: Our whole mission is built around helping people achieve financial security, 340 00:15:23,040 --> 00:15:25,480 Speaker 4: and we do that on the institutional side by partnering 341 00:15:25,560 --> 00:15:28,680 Speaker 4: with corporate sponsors and helping to ensure that the plans 342 00:15:28,680 --> 00:15:30,880 Speaker 4: that they're putting in place and the role that they 343 00:15:30,880 --> 00:15:34,240 Speaker 4: play through matching, through providing lifetime income, whatever the set 344 00:15:34,280 --> 00:15:37,160 Speaker 4: of benefits are is going to be, is going to 345 00:15:37,160 --> 00:15:39,040 Speaker 4: serve the participants in the way that we think is 346 00:15:39,040 --> 00:15:41,160 Speaker 4: going to help them. Have you retire with confidence and 347 00:15:41,200 --> 00:15:44,840 Speaker 4: with security. But as the you know, as the machine 348 00:15:44,840 --> 00:15:46,920 Speaker 4: shifts and it moves more toward a four to one 349 00:15:47,000 --> 00:15:48,680 Speaker 4: k and then you know, a lot of folks end 350 00:15:48,760 --> 00:15:50,640 Speaker 4: up with a nest egg that they have to manage 351 00:15:50,680 --> 00:15:52,760 Speaker 4: on their own. The goal is to make sure that 352 00:15:52,800 --> 00:15:54,560 Speaker 4: on the wealth side we also have sort of the 353 00:15:54,640 --> 00:15:57,560 Speaker 4: right kinds of products and services and solutions that help them, 354 00:15:57,640 --> 00:16:01,080 Speaker 4: you know, understand income, help them understand accumulation, help them 355 00:16:01,120 --> 00:16:04,440 Speaker 4: get the right diversification, help them get fair fees. I mean, 356 00:16:04,480 --> 00:16:06,920 Speaker 4: the goal is to make sure that we're really delivering 357 00:16:06,920 --> 00:16:08,600 Speaker 4: sort of a set of products and services that's going 358 00:16:08,640 --> 00:16:10,560 Speaker 4: to allow them to live the kind of retirement that 359 00:16:10,600 --> 00:16:11,640 Speaker 4: they all they'll hope for. 360 00:16:12,360 --> 00:16:16,040 Speaker 2: Really really interesting. So whenever I talk to people about Russell, 361 00:16:16,080 --> 00:16:20,920 Speaker 2: everybody knows the Russell two thousand. The question is what 362 00:16:20,960 --> 00:16:24,120 Speaker 2: does Russell do? How do they make money on? They 363 00:16:24,200 --> 00:16:26,480 Speaker 2: must do something more than the Russell two thousand. Tell 364 00:16:26,520 --> 00:16:29,840 Speaker 2: us a little bit about the different business lines at 365 00:16:29,920 --> 00:16:30,880 Speaker 2: Russell Investments. 366 00:16:30,920 --> 00:16:32,960 Speaker 4: Sure, so the index business is now owned by a 367 00:16:33,000 --> 00:16:36,720 Speaker 4: London Stock exchange and they do a magnificent job with it. 368 00:16:36,760 --> 00:16:38,320 Speaker 4: And we still have a little bit of the you know, 369 00:16:38,360 --> 00:16:40,240 Speaker 4: the aura. Every time I'm in the elevator, I see 370 00:16:40,240 --> 00:16:42,320 Speaker 4: the advertisements for Russell and I think. 371 00:16:42,200 --> 00:16:45,240 Speaker 3: I didn't have to pay for that ad. We get 372 00:16:45,240 --> 00:16:45,760 Speaker 3: the benefit. 373 00:16:46,480 --> 00:16:50,000 Speaker 4: The business is predominantly an it's an active asset management business, 374 00:16:50,080 --> 00:16:53,240 Speaker 4: and we really have one main function barrier. It's about 375 00:16:53,240 --> 00:16:55,800 Speaker 4: building and implementing great portfolios, and we do it for 376 00:16:56,000 --> 00:16:58,560 Speaker 4: institutional clients and we do it for retail clients. So 377 00:16:59,160 --> 00:17:02,560 Speaker 4: building the portfol folios is really about sort of portfolio construction. 378 00:17:02,640 --> 00:17:05,880 Speaker 4: It's strategies and managers. For ninety years we've done manager 379 00:17:05,960 --> 00:17:09,240 Speaker 4: research at Russell. We have, you know, a huge team 380 00:17:09,280 --> 00:17:12,080 Speaker 4: of people now is augmented by AI and technology helping 381 00:17:12,200 --> 00:17:15,040 Speaker 4: us look at sixteen thousand different managers and figuring out 382 00:17:15,040 --> 00:17:17,440 Speaker 4: we invest with about two hundred and twenty five of them, 383 00:17:17,760 --> 00:17:20,640 Speaker 4: you know, figuring out which managers and strategies we think 384 00:17:20,680 --> 00:17:24,040 Speaker 4: makes sense in the different portfolios we create. And then 385 00:17:24,040 --> 00:17:26,520 Speaker 4: the implementation is one of the coolest parts because that's 386 00:17:26,720 --> 00:17:29,320 Speaker 4: we actually do the investing on behalf of the managers. 387 00:17:29,560 --> 00:17:32,560 Speaker 4: They typically give us model portfolios, and then all the 388 00:17:32,600 --> 00:17:35,920 Speaker 4: things around the portfolio that can be very incremental. It's 389 00:17:35,960 --> 00:17:42,400 Speaker 4: the transitions, it's the hedging, completion, exercise completion mandates, overlays 390 00:17:43,040 --> 00:17:45,560 Speaker 4: and you know, those things can be alpha generative, they 391 00:17:45,560 --> 00:17:48,120 Speaker 4: can be very important for risk management. You can add 392 00:17:48,160 --> 00:17:52,600 Speaker 4: a values overlay for clients and so it's a full 393 00:17:52,640 --> 00:17:54,680 Speaker 4: portfolio delivery at the end of the day. 394 00:17:54,920 --> 00:17:58,760 Speaker 2: Coming up, we continue our conversation with Zach Bufwold, Chairman 395 00:17:58,840 --> 00:18:04,280 Speaker 2: and CEO of RUSS Investments, discussing exactly what Russell Investments 396 00:18:04,520 --> 00:18:08,399 Speaker 2: does for its clients. I'm Barry Ridholts. You're listening to 397 00:18:08,520 --> 00:18:24,000 Speaker 2: Masters in Business on Bloomberg Radio. I'm Barry Ridolts. You're 398 00:18:24,040 --> 00:18:27,720 Speaker 2: listening to Masters in Business on Bloomberg Radio. My extra 399 00:18:27,800 --> 00:18:31,080 Speaker 2: special guest this week is Zach Buckwald. He's chairman and 400 00:18:31,160 --> 00:18:34,920 Speaker 2: chief executive officer of Russell Investments. The firm was founded 401 00:18:34,920 --> 00:18:37,800 Speaker 2: in nineteen thirty six and runs about three hundred and 402 00:18:37,840 --> 00:18:42,520 Speaker 2: seventy billion dollars. Zach joined Russell in twenty twenty three, 403 00:18:42,640 --> 00:18:47,199 Speaker 2: coming from his previous career at Blackrock. So you mentioned 404 00:18:47,240 --> 00:18:52,760 Speaker 2: you're researching sixteen thousand different managers and internally you're generating 405 00:18:52,880 --> 00:18:56,439 Speaker 2: just a fire hose of data. How do you analyze that? 406 00:18:57,040 --> 00:18:59,400 Speaker 2: What value is that data to the firm? 407 00:18:59,600 --> 00:19:03,240 Speaker 4: Yeah, the data is everything, and we have we do 408 00:19:03,320 --> 00:19:06,359 Speaker 4: have a you know, historical trove of of data, but 409 00:19:06,400 --> 00:19:08,879 Speaker 4: it changes quickly. You think about how quickly the uh, 410 00:19:09,680 --> 00:19:13,680 Speaker 4: you know, the investment ecosystem evolves, and you know, managers 411 00:19:13,680 --> 00:19:15,760 Speaker 4: have strategies that make sense on one day and then 412 00:19:15,880 --> 00:19:19,360 Speaker 4: things change and those strategies don't make sense. So it's 413 00:19:19,400 --> 00:19:21,840 Speaker 4: it really has to stay current even though we you know, 414 00:19:21,840 --> 00:19:25,280 Speaker 4: we certainly value that the historical data and performance and 415 00:19:25,400 --> 00:19:28,879 Speaker 4: use it. We start with sixteen thousand and the first 416 00:19:28,920 --> 00:19:32,840 Speaker 4: layer is largely technology driven, so it's uh, you know, 417 00:19:32,880 --> 00:19:35,760 Speaker 4: we have huge feeds that take into you know, that 418 00:19:35,760 --> 00:19:38,760 Speaker 4: that take in and analyze all of the available information 419 00:19:38,880 --> 00:19:41,439 Speaker 4: that's provided to us by managers directly and also that 420 00:19:41,480 --> 00:19:44,480 Speaker 4: we can find out there in the in the public domain. 421 00:19:44,560 --> 00:19:48,200 Speaker 2: When you say managers of these mutual fund managers, ETF managers, 422 00:19:48,320 --> 00:19:50,440 Speaker 2: private managers or all the. 423 00:19:50,400 --> 00:19:52,159 Speaker 3: Above, it's it's all of the above. 424 00:19:52,200 --> 00:19:54,760 Speaker 4: I mean, typically because of our size and scale, we 425 00:19:54,800 --> 00:19:56,520 Speaker 4: don't we don't invest in a ton of. 426 00:19:56,440 --> 00:19:59,440 Speaker 3: Direct like uh, shared products. 427 00:19:59,800 --> 00:20:03,240 Speaker 4: We do much more sort of separate accounts, and but 428 00:20:03,320 --> 00:20:05,119 Speaker 4: we do invest in mutual funds, we do invest in 429 00:20:05,160 --> 00:20:07,520 Speaker 4: ETFs or index products where that makes sense and that 430 00:20:07,560 --> 00:20:09,399 Speaker 4: can help, you know, drive down cost or you know, 431 00:20:09,560 --> 00:20:14,520 Speaker 4: help with the diversification. But the managers is for the 432 00:20:14,680 --> 00:20:18,479 Speaker 4: active strategies and active represents. I'm going to guess probably 433 00:20:18,480 --> 00:20:21,320 Speaker 4: eighty five percent of the assets and that that we 434 00:20:21,359 --> 00:20:25,199 Speaker 4: manage overall. Remember we're using different active strategies as the 435 00:20:25,280 --> 00:20:28,720 Speaker 4: building blocks to create these portfolios. So predominantly it's not 436 00:20:28,800 --> 00:20:30,960 Speaker 4: Russell managed. Although you know, we can talk about the 437 00:20:30,960 --> 00:20:35,040 Speaker 4: smart beta that you brought up predominantly. These are externally 438 00:20:35,359 --> 00:20:38,960 Speaker 4: managed strategies that we bring together and then we collapse 439 00:20:39,000 --> 00:20:41,280 Speaker 4: the whole thing together in one portfolio, and we look 440 00:20:41,600 --> 00:20:44,359 Speaker 4: enterprise wide because you might have you know, three active 441 00:20:44,359 --> 00:20:46,399 Speaker 4: equity managers and they're not paying attention to what the 442 00:20:46,400 --> 00:20:48,080 Speaker 4: other ones are doing, and so you can end up 443 00:20:48,080 --> 00:20:51,280 Speaker 4: with outsized positions or underweights. You can end up with, 444 00:20:51,640 --> 00:20:54,400 Speaker 4: you know, people on opposite sides of trades, and we 445 00:20:54,440 --> 00:20:56,840 Speaker 4: look to you know, to correct or make adjustments where 446 00:20:56,880 --> 00:20:57,400 Speaker 4: it makes sense. 447 00:20:57,920 --> 00:21:01,280 Speaker 2: So you guys were very innovative then helped create the 448 00:21:01,359 --> 00:21:06,119 Speaker 2: concept of outsourced. Chief Investment Officer O CIOs tell us 449 00:21:06,119 --> 00:21:08,520 Speaker 2: a little bit about that business line, who are the 450 00:21:08,600 --> 00:21:12,720 Speaker 2: clients and how much assets does that run? 451 00:21:13,240 --> 00:21:15,440 Speaker 4: Yeah, so O CIO represents the lion's share of the 452 00:21:15,480 --> 00:21:17,880 Speaker 4: three hundred and seventy billion that we manage. And it's 453 00:21:17,880 --> 00:21:21,080 Speaker 4: a fast growing segment, not just at Russell, but it's 454 00:21:21,160 --> 00:21:24,480 Speaker 4: growing because a lot of companies are outsourcing their pensions 455 00:21:24,560 --> 00:21:26,600 Speaker 4: or their fo one kes to you know, folks that 456 00:21:26,760 --> 00:21:29,320 Speaker 4: live and breathe the markets and that think about retirement 457 00:21:29,359 --> 00:21:33,000 Speaker 4: security like we do all day long. So, you know, 458 00:21:33,400 --> 00:21:35,600 Speaker 4: a typical day at Bloomberg might have one top story 459 00:21:35,600 --> 00:21:37,960 Speaker 4: about a big corporate, you know, big US corporate that's 460 00:21:38,040 --> 00:21:41,080 Speaker 4: chosen to outsource their retirement portfolio. Now, we work with 461 00:21:41,119 --> 00:21:43,000 Speaker 4: a lot of in house teams as well. We help 462 00:21:43,080 --> 00:21:47,080 Speaker 4: by bringing in any of those implementation services like transitions 463 00:21:47,119 --> 00:21:49,320 Speaker 4: and hedging. We do that for a lot of a 464 00:21:49,359 --> 00:21:52,679 Speaker 4: lot of companies that have internal teams, but sometimes sponsors 465 00:21:52,680 --> 00:21:56,640 Speaker 4: decide to you know, to hire retirement experts to run 466 00:21:56,680 --> 00:21:59,240 Speaker 4: their to run their retirement portfolio, and that's when they 467 00:21:59,240 --> 00:22:02,439 Speaker 4: would bring in an source chief investment officer. We're a 468 00:22:02,480 --> 00:22:04,439 Speaker 4: top five provider and it's some of the big you know, 469 00:22:04,480 --> 00:22:07,040 Speaker 4: the other big asset managers that that also provide that. 470 00:22:07,400 --> 00:22:10,040 Speaker 4: We're the ones who do it with an open architecture framework. 471 00:22:10,080 --> 00:22:12,159 Speaker 4: So the goal is not to have Russell run the 472 00:22:12,200 --> 00:22:14,760 Speaker 4: whole portfolio. It's to bring in best of breed managers 473 00:22:14,760 --> 00:22:15,800 Speaker 4: and to bring those together. 474 00:22:16,480 --> 00:22:19,320 Speaker 2: Huh really really kind of interesting. When you talk about hedging, 475 00:22:20,400 --> 00:22:24,760 Speaker 2: are you hedging equity, hedging, fixed income? What is the 476 00:22:24,800 --> 00:22:25,679 Speaker 2: hedging business? Like? 477 00:22:25,800 --> 00:22:30,760 Speaker 4: Yeah, it can be all of the above, also foreign currency, 478 00:22:32,600 --> 00:22:34,920 Speaker 4: you know, it can be hedging individual sectors. You might 479 00:22:34,960 --> 00:22:37,479 Speaker 4: have a sponsor that's in the technology sector and they 480 00:22:37,480 --> 00:22:39,920 Speaker 4: feel like they already have enough exposure to technology, and 481 00:22:39,960 --> 00:22:42,200 Speaker 4: so you can you know, make some adjustments to the portfolio. 482 00:22:42,240 --> 00:22:44,840 Speaker 4: That way, you can also build in a values orientation 483 00:22:45,040 --> 00:22:47,919 Speaker 4: for you know, organizations that have a particular view of 484 00:22:47,920 --> 00:22:50,399 Speaker 4: the world that they want to express in their investment portfolios. 485 00:22:50,800 --> 00:22:53,120 Speaker 2: So let's talk a little bit about smart beta, which 486 00:22:53,240 --> 00:22:57,640 Speaker 2: Russell helped pioneer in nineteen eighty five, way before your 487 00:22:57,760 --> 00:23:01,080 Speaker 2: time or my time for that matter. Is this still 488 00:23:01,119 --> 00:23:02,880 Speaker 2: something that's a key part of what you're doing. 489 00:23:03,080 --> 00:23:06,359 Speaker 4: So we still have a strong footprint within Systematic Barry 490 00:23:06,400 --> 00:23:08,720 Speaker 4: and you know, Russell manages on average between ten and 491 00:23:08,760 --> 00:23:12,040 Speaker 4: twenty percent of the portfolios that we look after, and 492 00:23:12,080 --> 00:23:15,359 Speaker 4: Systematic typically is within that that ten to twenty percent. 493 00:23:15,920 --> 00:23:18,040 Speaker 4: We use it not to make you know, credit decisions 494 00:23:18,119 --> 00:23:21,240 Speaker 4: or stock picking decisions like that's not our game. That's 495 00:23:21,240 --> 00:23:24,560 Speaker 4: why we hire external managers who are true experts in that. 496 00:23:25,480 --> 00:23:28,159 Speaker 4: We use it to like round out the portfolio, to 497 00:23:28,160 --> 00:23:30,760 Speaker 4: make adjustments to make sure that the portfolio is complying 498 00:23:30,840 --> 00:23:33,200 Speaker 4: with why the client hired us or whatever their investment 499 00:23:33,280 --> 00:23:37,040 Speaker 4: you know, their stated investment strategy says. But smart beta 500 00:23:37,240 --> 00:23:39,520 Speaker 4: is you know one of the many places where Russell 501 00:23:39,560 --> 00:23:41,520 Speaker 4: was an innovator, and you know, these things can sort 502 00:23:41,520 --> 00:23:43,240 Speaker 4: of take on a life of their own as the 503 00:23:43,680 --> 00:23:45,800 Speaker 4: as the industry adopts those practices. 504 00:23:46,280 --> 00:23:49,920 Speaker 2: We mentioned artificial intelligence earlier. Tell us how you're using 505 00:23:49,960 --> 00:23:55,040 Speaker 2: AI and either risk management, portfolio construction, or just data analytics. 506 00:23:55,240 --> 00:23:57,520 Speaker 4: So, Barry, we have a list this long of sort 507 00:23:57,560 --> 00:23:59,879 Speaker 4: of you know, desired use cases that we're working on 508 00:24:00,080 --> 00:24:03,359 Speaker 4: for AI. And I think we're still in early innings here, 509 00:24:03,640 --> 00:24:05,800 Speaker 4: but the kinds of things that we use AI for 510 00:24:06,040 --> 00:24:08,879 Speaker 4: today very effectively, are more task oriented. We know, we 511 00:24:08,920 --> 00:24:11,520 Speaker 4: have it fill out our RFPs, we have it build 512 00:24:11,560 --> 00:24:14,600 Speaker 4: pitch decks, we have actually we use AI to you know, 513 00:24:14,640 --> 00:24:17,520 Speaker 4: read five hundred page filings, you know, which we used 514 00:24:17,520 --> 00:24:19,720 Speaker 4: to have a human being do back in the day, 515 00:24:20,400 --> 00:24:23,520 Speaker 4: and it's very effective at that. The real goal for 516 00:24:23,840 --> 00:24:25,760 Speaker 4: you know, for this company is that I want AI 517 00:24:25,840 --> 00:24:29,680 Speaker 4: to actually help us with investment insights, with manager research insights. 518 00:24:29,720 --> 00:24:31,879 Speaker 4: That's going to actually drive performance at the end of 519 00:24:31,920 --> 00:24:33,960 Speaker 4: the day. And I think we still have a fair 520 00:24:33,960 --> 00:24:35,960 Speaker 4: amount of We're making progress, but I think we still 521 00:24:36,000 --> 00:24:39,480 Speaker 4: have a fair amount of work before before that happens. 522 00:24:39,760 --> 00:24:41,119 Speaker 3: But you know, that's the. 523 00:24:41,200 --> 00:24:44,439 Speaker 4: View we're having you know, having a portfolio where we 524 00:24:44,480 --> 00:24:49,240 Speaker 4: look after sixteen thousand different strategies and managers. We're starting 525 00:24:49,240 --> 00:24:51,040 Speaker 4: from a place where we be as you said, we 526 00:24:51,119 --> 00:24:54,960 Speaker 4: have troves of information, of historical information that we're relying on, 527 00:24:55,480 --> 00:24:57,920 Speaker 4: and that we're using AI to sort of help build 528 00:24:57,920 --> 00:24:58,760 Speaker 4: out that framework. 529 00:24:59,400 --> 00:25:03,400 Speaker 2: So I'm always fascinated by you know, the old joke 530 00:25:03,520 --> 00:25:06,879 Speaker 2: is no one's ever seen a bad back test, and 531 00:25:07,200 --> 00:25:11,560 Speaker 2: AI and those sort of things are only capable of 532 00:25:11,600 --> 00:25:15,720 Speaker 2: looking at what's already occurred and built into all of 533 00:25:15,760 --> 00:25:19,080 Speaker 2: those back tests and to some degree, built in to 534 00:25:19,240 --> 00:25:22,359 Speaker 2: AI is that the future is going to resemble the past. 535 00:25:22,800 --> 00:25:26,960 Speaker 2: How do you navigate around that? Because sometimes the future 536 00:25:27,080 --> 00:25:30,639 Speaker 2: doesn't resemble the past. Just look at AI and how 537 00:25:30,680 --> 00:25:34,280 Speaker 2: it's changing so many aspects of various businesses. 538 00:25:34,400 --> 00:25:37,520 Speaker 4: Yeah, well that's a place where you know, I'm still 539 00:25:37,760 --> 00:25:41,080 Speaker 4: pretty optimistic that there's an enormous amount of value creation 540 00:25:41,320 --> 00:25:45,160 Speaker 4: to come varry because the you know, what we've seen 541 00:25:45,200 --> 00:25:47,160 Speaker 4: from AI so far, at least how it's how it's 542 00:25:47,160 --> 00:25:49,439 Speaker 4: shown up in terms of you know, in the market 543 00:25:49,480 --> 00:25:55,359 Speaker 4: performance has been almost entirely Harvard in the technology sector. 544 00:25:55,680 --> 00:25:59,439 Speaker 4: It's where you know, sort of where AI exists what 545 00:25:59,560 --> 00:26:02,199 Speaker 4: we have seen yet is all the other sectors that 546 00:26:02,280 --> 00:26:05,120 Speaker 4: we know are going to be sort of enormously impacted 547 00:26:06,160 --> 00:26:08,760 Speaker 4: by the proper use of AI, the creative and innovative 548 00:26:08,840 --> 00:26:10,400 Speaker 4: use of AI. So you know, you see a little 549 00:26:10,400 --> 00:26:12,439 Speaker 4: bit of it in like healthcare and life sciences, but 550 00:26:12,840 --> 00:26:16,080 Speaker 4: you know, logistics and shipping and consumer goods and investments, 551 00:26:16,160 --> 00:26:20,560 Speaker 4: asset management, they're all going to get transformed by AI 552 00:26:20,760 --> 00:26:24,160 Speaker 4: because it's changing things. And you know, this is where 553 00:26:24,359 --> 00:26:26,560 Speaker 4: I'm really optimistic that we have a lot more room 554 00:26:26,640 --> 00:26:29,680 Speaker 4: to run in the markets today, is because you're still 555 00:26:29,680 --> 00:26:32,000 Speaker 4: not seeing like all the you know, the potential and 556 00:26:32,040 --> 00:26:34,360 Speaker 4: the benefits of AS showing up in some of these 557 00:26:34,400 --> 00:26:36,040 Speaker 4: you know, what we think of as sectors that are 558 00:26:36,040 --> 00:26:39,440 Speaker 4: peripheral to technology, but you know, in truth, technology is 559 00:26:39,480 --> 00:26:41,880 Speaker 4: like critical to how we you know, how we all exist. 560 00:26:42,640 --> 00:26:46,440 Speaker 2: Makes makes a lot of sense. Let's talk about private markets. 561 00:26:46,560 --> 00:26:51,880 Speaker 2: How can Russell Investments help their clients access private markets? 562 00:26:51,920 --> 00:26:55,080 Speaker 2: Between AI and privates, those are probably the two hottest 563 00:26:55,560 --> 00:26:57,720 Speaker 2: topics we've been talking about this year. 564 00:26:58,119 --> 00:27:01,959 Speaker 4: So privates represents at seven percent of the portfolios that 565 00:27:02,000 --> 00:27:05,920 Speaker 4: we manage. It's heavier in the institutional portfolios. It's lighter 566 00:27:06,000 --> 00:27:09,440 Speaker 4: right now. Within wealth portfolios, there's a lot more growth 567 00:27:09,560 --> 00:27:11,719 Speaker 4: that's that's going to happen, especially in wealth. I think 568 00:27:11,800 --> 00:27:14,240 Speaker 4: the average wealth clients something like one or two percent 569 00:27:14,800 --> 00:27:17,399 Speaker 4: of their portfolio outside of their real estateholdings about one 570 00:27:17,520 --> 00:27:20,880 Speaker 4: or two percent in privates, and that number is going 571 00:27:20,920 --> 00:27:23,280 Speaker 4: to grow and should grow, right because this is a 572 00:27:23,600 --> 00:27:28,160 Speaker 4: really important source of return and risk diversification, and if 573 00:27:28,160 --> 00:27:31,520 Speaker 4: you rely on the historical precedents, it's been an enormous 574 00:27:31,560 --> 00:27:35,440 Speaker 4: outperformer writ large and so you know, kind of delivering 575 00:27:35,600 --> 00:27:38,200 Speaker 4: you know, access is a it's a very important function 576 00:27:38,240 --> 00:27:39,880 Speaker 4: that we do at Russell, but also that we work 577 00:27:39,920 --> 00:27:42,520 Speaker 4: with our financial advisor partners to figure out the best 578 00:27:42,520 --> 00:27:44,720 Speaker 4: ways because it's you know, how you deliver privates to 579 00:27:44,960 --> 00:27:50,040 Speaker 4: to institutional investors is different, right There's tax considerations and 580 00:27:50,080 --> 00:27:54,320 Speaker 4: reporting considerations, liquidity considerations that all need to be considered 581 00:27:54,480 --> 00:27:58,040 Speaker 4: with individuals. So we're trying to do this, you know, 582 00:27:58,080 --> 00:28:02,200 Speaker 4: really judiciously. Within wealth portfolio is wealthy people, wealthy families. 583 00:28:02,320 --> 00:28:04,600 Speaker 4: There's a lot of room to run here. You know, 584 00:28:04,720 --> 00:28:07,320 Speaker 4: I'm being extra cautious when I think about you know, 585 00:28:07,359 --> 00:28:09,920 Speaker 4: sort of four to one k's or you know, four 586 00:28:09,920 --> 00:28:12,760 Speaker 4: to one k graduates, you know, middle class people nest eggs, 587 00:28:13,200 --> 00:28:16,640 Speaker 4: because that's where you know, I think about are these 588 00:28:16,640 --> 00:28:19,960 Speaker 4: appropriate investments? Do they help with financial security? Can you 589 00:28:20,000 --> 00:28:21,919 Speaker 4: get your money back when you need it? Are the 590 00:28:21,960 --> 00:28:24,280 Speaker 4: fees you know fair and appropriate? And and so I 591 00:28:24,280 --> 00:28:27,680 Speaker 4: think you need to be extra careful with with the 592 00:28:27,920 --> 00:28:31,280 Speaker 4: you know, sort of true working people, working families and 593 00:28:31,320 --> 00:28:34,320 Speaker 4: their retirement nest eggs. But wealth or at large, there's 594 00:28:34,320 --> 00:28:36,719 Speaker 4: a there's a ton of room for private markets. 595 00:28:36,800 --> 00:28:40,400 Speaker 2: So you mentioned seven percent. Where could this possibly go? 596 00:28:40,640 --> 00:28:44,840 Speaker 2: Is this ten percent, fifteen percent, twenty percent. I've heard 597 00:28:44,880 --> 00:28:48,760 Speaker 2: people say sixty forty is out, it's now fifty thirty, 598 00:28:48,800 --> 00:28:51,280 Speaker 2: twenty or whatever the numbers add up to. 599 00:28:52,600 --> 00:28:53,520 Speaker 3: I don't know where it gets to. 600 00:28:53,600 --> 00:28:57,360 Speaker 4: It's certainly going to be north of seven percent, you know, 601 00:28:57,400 --> 00:28:59,239 Speaker 4: I think it's I think you have to think not 602 00:28:59,280 --> 00:29:02,160 Speaker 4: only about what's appropriate for the portfolio. Is listen, if 603 00:29:02,160 --> 00:29:04,840 Speaker 4: you do a backward looking analysis of private equity and 604 00:29:04,880 --> 00:29:07,280 Speaker 4: private credit, you know which I outside of you know, 605 00:29:07,320 --> 00:29:09,360 Speaker 4: specific real estate investments that people choose themselves. 606 00:29:09,400 --> 00:29:11,240 Speaker 3: Those are like the two biggest food groups. 607 00:29:11,880 --> 00:29:15,160 Speaker 4: If you run an analysis of what those investments looked 608 00:29:15,200 --> 00:29:17,640 Speaker 4: like over the last twenty years, Arry, it's going to 609 00:29:17,640 --> 00:29:19,480 Speaker 4: be different than what you're going to get in the 610 00:29:19,520 --> 00:29:21,920 Speaker 4: next twenty years for a lot of reasons. But you know, 611 00:29:21,960 --> 00:29:25,280 Speaker 4: I'll tell you from my personal perspective right now. You know, 612 00:29:25,320 --> 00:29:27,800 Speaker 4: in the last two years, my vets office has been 613 00:29:27,800 --> 00:29:34,120 Speaker 4: bought by private equity. My landscaper, my garbage collection, my dentist, 614 00:29:34,480 --> 00:29:37,560 Speaker 4: they're all owned by private equity now, and you know, 615 00:29:37,600 --> 00:29:40,080 Speaker 4: they're doing these roll ups and there's lots of efficiencies 616 00:29:40,080 --> 00:29:42,959 Speaker 4: to be created on bringing these you know, these practices together. 617 00:29:43,560 --> 00:29:47,040 Speaker 4: But you know, that's a pretty different investment than buying 618 00:29:47,080 --> 00:29:50,000 Speaker 4: a company, right and making a company better and selling 619 00:29:50,040 --> 00:29:52,560 Speaker 4: that company, which historically is you know where where private 620 00:29:52,600 --> 00:29:55,959 Speaker 4: equity made its name and its reputation and the return 621 00:29:56,120 --> 00:29:59,080 Speaker 4: stream that we've seen. So, you know, another thing I 622 00:29:59,080 --> 00:30:01,440 Speaker 4: think about is how am I going to make sure 623 00:30:01,600 --> 00:30:04,760 Speaker 4: that the risk and return profiles I'm putting into these 624 00:30:04,800 --> 00:30:08,040 Speaker 4: portfolios that we can you know, reasonably predict what they're 625 00:30:08,040 --> 00:30:09,720 Speaker 4: going to look like, and that we can manage them, 626 00:30:09,800 --> 00:30:11,960 Speaker 4: you know, sort of appropriately, given that the asset pools 627 00:30:12,000 --> 00:30:14,640 Speaker 4: might look a little different than what you know, what 628 00:30:14,680 --> 00:30:16,080 Speaker 4: we were investing in ten years ago. 629 00:30:17,320 --> 00:30:20,760 Speaker 2: Really really interesting. So let's talk a little bit about 630 00:30:21,160 --> 00:30:22,760 Speaker 2: some of the things that are going on in the 631 00:30:22,800 --> 00:30:27,920 Speaker 2: market today. Fee compression has been a giant factor really 632 00:30:28,480 --> 00:30:33,200 Speaker 2: since the financial crisis. You recently decided to reduce some 633 00:30:33,360 --> 00:30:37,600 Speaker 2: of the fees on your flagship fix income products. Tell 634 00:30:37,680 --> 00:30:40,320 Speaker 2: us a little bit about what drove your decision and 635 00:30:40,360 --> 00:30:44,240 Speaker 2: what are you thinking about in terms of fees generally. 636 00:30:44,480 --> 00:30:46,520 Speaker 4: I mean, the governing presept barrier is always to make 637 00:30:46,520 --> 00:30:49,760 Speaker 4: sure we're providing value to the clients, and you know, 638 00:30:49,840 --> 00:30:53,640 Speaker 4: we do that by charging a fair and appropriate fee 639 00:30:53,680 --> 00:30:55,600 Speaker 4: for what it is we're doing. If I'm going to 640 00:30:55,600 --> 00:30:58,360 Speaker 4: focus on anything, it's less about what's the fee that 641 00:30:58,400 --> 00:31:01,160 Speaker 4: I can charge and more about making that I'm invaluable 642 00:31:01,200 --> 00:31:03,720 Speaker 4: to these clients and that we're really, you know, helping 643 00:31:03,720 --> 00:31:06,680 Speaker 4: them achieve their goals. When you the truth is, when 644 00:31:06,680 --> 00:31:08,480 Speaker 4: you do a great job for the client, the fee 645 00:31:08,480 --> 00:31:12,800 Speaker 4: almost becomes not an issue. Now, having said that, we 646 00:31:12,840 --> 00:31:15,080 Speaker 4: have some businesses that are scale businesses and that I 647 00:31:15,120 --> 00:31:17,240 Speaker 4: compete with, you know, with other good providers, and I 648 00:31:17,280 --> 00:31:19,520 Speaker 4: have to make sure that we're staying competitive, so we're 649 00:31:19,520 --> 00:31:24,520 Speaker 4: not in any way immune to feed compression. But you know, 650 00:31:24,560 --> 00:31:26,680 Speaker 4: but if you can provide a really good value proposition. 651 00:31:26,960 --> 00:31:27,960 Speaker 3: It's not such a big deal. 652 00:31:28,640 --> 00:31:33,480 Speaker 2: So this has been an ongoing factor in the industry, 653 00:31:34,080 --> 00:31:38,680 Speaker 2: particularly for active managers, and Russell is primarily an active manager. 654 00:31:39,760 --> 00:31:42,520 Speaker 2: Are you seeing any changes in this trend globally? I 655 00:31:42,520 --> 00:31:46,280 Speaker 2: mean it started very much in the United States with 656 00:31:46,280 --> 00:31:51,800 Speaker 2: with entities like black Rock and especially Vanguard, your global firm. 657 00:31:52,000 --> 00:31:53,520 Speaker 2: What does this look like overseas? 658 00:31:53,800 --> 00:31:56,080 Speaker 4: Yeah, fee compression in our space is you know, it 659 00:31:56,680 --> 00:31:59,800 Speaker 4: comes through in different ways globally. O CIO is the 660 00:31:59,800 --> 00:32:02,720 Speaker 4: place where we've been sort of most susceptible to, you know, 661 00:32:02,800 --> 00:32:05,400 Speaker 4: to feed compression. Barry, and you know, if I think 662 00:32:05,400 --> 00:32:09,200 Speaker 4: about who we compete against, the landscape has changed for 663 00:32:09,320 --> 00:32:11,400 Speaker 4: us over the last ten years. You know, ten years ago, 664 00:32:11,440 --> 00:32:14,880 Speaker 4: I competed largely against like the consult the traditional consultants, 665 00:32:14,920 --> 00:32:17,880 Speaker 4: and we had a very different offering. We actually implemented 666 00:32:17,880 --> 00:32:20,320 Speaker 4: the portfolio. We weren't just doing manager research sort of 667 00:32:20,320 --> 00:32:24,000 Speaker 4: on paper. We were actually trading the portfolio and you know, 668 00:32:24,040 --> 00:32:26,160 Speaker 4: doing the risk management and the overlays and the completions. 669 00:32:26,200 --> 00:32:28,400 Speaker 4: Things that were a very big value add and we 670 00:32:28,400 --> 00:32:31,600 Speaker 4: were unique in that respect. And then along came the 671 00:32:31,680 --> 00:32:35,400 Speaker 4: really big asset managers that saw Ocio in part as 672 00:32:35,440 --> 00:32:37,640 Speaker 4: sort of a distribution function. You know, if I can 673 00:32:38,040 --> 00:32:40,440 Speaker 4: deliver the entire portfolio, I can put a lot of 674 00:32:40,480 --> 00:32:42,960 Speaker 4: my own underlying products into that portfolio. 675 00:32:43,040 --> 00:32:44,600 Speaker 3: And by the way, that can be a great business 676 00:32:44,640 --> 00:32:45,280 Speaker 3: for you if you have. 677 00:32:45,360 --> 00:32:48,120 Speaker 2: But that's a closed architecture. You guys run a very 678 00:32:48,120 --> 00:32:49,160 Speaker 2: open architect. 679 00:32:48,840 --> 00:32:51,720 Speaker 4: We run a completely open architecture, and we're unique in 680 00:32:51,800 --> 00:32:54,920 Speaker 4: that it's true open architecture. Eighty plus percent and sometimes 681 00:32:54,920 --> 00:32:57,600 Speaker 4: one hundred percent of the assets come from third party managers, 682 00:32:58,120 --> 00:33:01,640 Speaker 4: but we still have to compete against organizations that are 683 00:33:01,720 --> 00:33:05,440 Speaker 4: running their own version, which might be closed or semi closed. 684 00:33:06,040 --> 00:33:07,560 Speaker 4: And you know, if you have a whole lot of 685 00:33:07,640 --> 00:33:10,440 Speaker 4: underlying products you're putting into the portfolio, it gives you 686 00:33:10,600 --> 00:33:12,880 Speaker 4: a lot of leeway to change the fee or to 687 00:33:12,920 --> 00:33:15,480 Speaker 4: compress the fee at the ocio level because you're making 688 00:33:15,520 --> 00:33:18,000 Speaker 4: money in all sorts of other ways. Russell doesn't do that. 689 00:33:18,120 --> 00:33:20,760 Speaker 4: So it does mean that we were susceptible to some 690 00:33:20,760 --> 00:33:23,560 Speaker 4: of the fee compression, and our fees have narrowed. But 691 00:33:23,720 --> 00:33:25,680 Speaker 4: the way I see the solution here is just to 692 00:33:25,680 --> 00:33:28,040 Speaker 4: make sure that the value proposition that we're offering. 693 00:33:28,120 --> 00:33:29,600 Speaker 3: The way we go about building in. 694 00:33:29,640 --> 00:33:33,160 Speaker 4: Ocio, the costs that you know, it takes, the human 695 00:33:33,320 --> 00:33:36,240 Speaker 4: capital that's required. You know, we put over one hundred 696 00:33:36,280 --> 00:33:39,520 Speaker 4: million dollars into our technology system that allows us to 697 00:33:39,520 --> 00:33:43,360 Speaker 4: build these open architecture portfolios. When clients understand what it 698 00:33:43,440 --> 00:33:46,160 Speaker 4: is that they get from us, paying a slightly higher 699 00:33:46,200 --> 00:33:47,440 Speaker 4: fee doesn't seem to be a big deal. 700 00:33:48,120 --> 00:33:51,600 Speaker 2: What about the private markets that we're looking at. We 701 00:33:51,640 --> 00:33:55,479 Speaker 2: were talking about private equity, private credit. First, is it 702 00:33:55,640 --> 00:33:59,000 Speaker 2: possible that those sort of things can be indexed? And 703 00:33:59,040 --> 00:34:03,800 Speaker 2: then second they've always been priceier than public markets, always 704 00:34:03,800 --> 00:34:06,160 Speaker 2: started seeing fee compression along those lines. 705 00:34:06,360 --> 00:34:09,880 Speaker 4: Yeah, so we haven't seen a ton of fee compression. 706 00:34:10,400 --> 00:34:12,360 Speaker 4: I mean, those are cases where I think the value 707 00:34:12,360 --> 00:34:15,560 Speaker 4: proposition is crystal clear, and you know, the high performing 708 00:34:15,600 --> 00:34:19,600 Speaker 4: managers can charge higher fees or substantial fees because they've 709 00:34:19,640 --> 00:34:23,239 Speaker 4: really delivered, and in general they continue to deliver. I 710 00:34:23,280 --> 00:34:25,600 Speaker 4: think if they stop delivering and or you know, and 711 00:34:25,680 --> 00:34:28,719 Speaker 4: we start seeing what look more like public markets performance, 712 00:34:28,800 --> 00:34:31,520 Speaker 4: or even weak public markets performance, it's going to be 713 00:34:31,600 --> 00:34:34,759 Speaker 4: much harder for them to charge those those fees. But 714 00:34:34,760 --> 00:34:37,400 Speaker 4: that hasn't happened yet, you know, especially within private credit 715 00:34:37,440 --> 00:34:41,880 Speaker 4: and private equity there's been you know, real out performance, 716 00:34:41,960 --> 00:34:44,880 Speaker 4: especially at the top of the heap versus the public markets, 717 00:34:44,880 --> 00:34:47,160 Speaker 4: so it becomes easier to justify those fees. 718 00:34:47,239 --> 00:34:49,680 Speaker 2: It makes a lot of sense. So let's let's venture 719 00:34:49,680 --> 00:34:52,720 Speaker 2: into the world of public policy a little bit. You've 720 00:34:52,760 --> 00:34:58,680 Speaker 2: proposed national account programs to help young people start investing early. 721 00:34:59,200 --> 00:35:02,600 Speaker 2: The most some big bill that passed in this administration 722 00:35:03,160 --> 00:35:06,520 Speaker 2: has these accounts for babies. Every kid that's going to 723 00:35:06,560 --> 00:35:08,840 Speaker 2: be born is going to get what is it, fifteen 724 00:35:08,920 --> 00:35:11,440 Speaker 2: hundred or three thousand dollars, I don't know what it's number, 725 00:35:11,440 --> 00:35:14,280 Speaker 2: one thousand dollars, A thousand dollars, all right, better than nothing. 726 00:35:14,360 --> 00:35:18,920 Speaker 2: But where do you see these sort of programs going. 727 00:35:19,600 --> 00:35:24,520 Speaker 2: And if you start investing at age one day, what 728 00:35:24,600 --> 00:35:28,320 Speaker 2: potential compounding can we see fifty seventy five, one hundred 729 00:35:28,400 --> 00:35:28,879 Speaker 2: years later? 730 00:35:28,960 --> 00:35:32,120 Speaker 4: Now you're really talking my language. When Trump was elected, 731 00:35:32,160 --> 00:35:33,799 Speaker 4: I wrote a piece that we put into Barons that 732 00:35:33,840 --> 00:35:36,800 Speaker 4: Baron's published, saying that we should give a thousand dollars 733 00:35:36,840 --> 00:35:39,960 Speaker 4: to every kid in America and open an investment account 734 00:35:39,960 --> 00:35:42,680 Speaker 4: and let them actually learn about the power of compounding, 735 00:35:42,680 --> 00:35:45,160 Speaker 4: because it's different when you actually own the assets and 736 00:35:45,600 --> 00:35:47,480 Speaker 4: you know when you get people an investment account, you 737 00:35:47,560 --> 00:35:49,799 Speaker 4: can find lots of ways to create some education, you know, 738 00:35:49,840 --> 00:35:51,520 Speaker 4: investment education that goes along. 739 00:35:51,760 --> 00:35:54,080 Speaker 2: Let me just interrupt you because it sounds like a 740 00:35:54,080 --> 00:35:56,799 Speaker 2: lot of money. There are three million kids born a year. 741 00:35:56,840 --> 00:36:01,359 Speaker 2: It's three billion dollars, yes, which to way thirty one 742 00:36:01,440 --> 00:36:05,080 Speaker 2: trillion dollar economy and a six or seven trillion dollar 743 00:36:05,239 --> 00:36:07,359 Speaker 2: government spend is surrounding out. 744 00:36:07,320 --> 00:36:09,600 Speaker 3: It's nothing in the grand scheme of things. 745 00:36:09,680 --> 00:36:12,600 Speaker 4: And you know, you know you're onto something because it 746 00:36:12,640 --> 00:36:15,359 Speaker 4: got actually got criticized by both the right and the left, 747 00:36:15,400 --> 00:36:18,320 Speaker 4: and the right said, oh, this is another entitlement program. Anyway, 748 00:36:18,360 --> 00:36:20,400 Speaker 4: we put this thing into barons, and to my surprise 749 00:36:20,480 --> 00:36:23,279 Speaker 4: and delight, it ended up in the big beautiful bill 750 00:36:23,280 --> 00:36:24,120 Speaker 4: and it actually got. 751 00:36:24,080 --> 00:36:26,839 Speaker 2: Actually passed, It passed and funded, right became. 752 00:36:26,719 --> 00:36:29,560 Speaker 4: Legislation, and you know, Treasury is working hard now thinking 753 00:36:29,600 --> 00:36:34,160 Speaker 4: through you know, the implementation, and we're helping along the way. 754 00:36:34,840 --> 00:36:38,960 Speaker 4: It's it's an awesome program because fundamentally, what it does 755 00:36:39,120 --> 00:36:42,920 Speaker 4: is it makes investing universal. You know, all these families 756 00:36:43,120 --> 00:36:45,440 Speaker 4: in the United States that think that investing is not 757 00:36:45,520 --> 00:36:47,520 Speaker 4: for them or they never had any exposure to it, 758 00:36:47,560 --> 00:36:50,680 Speaker 4: and that's by the way most of America right now, 759 00:36:50,760 --> 00:36:52,879 Speaker 4: to the extent they have, you know, have a kid, 760 00:36:53,160 --> 00:36:55,880 Speaker 4: they are going to have an investment account. That that's 761 00:36:56,040 --> 00:36:59,680 Speaker 4: you know, there is a there's one thousand dollars to 762 00:37:00,480 --> 00:37:02,520 Speaker 4: kickstart it from the government, but there's going to be 763 00:37:02,600 --> 00:37:05,799 Speaker 4: lots of avenues for families to make continued contributions, for 764 00:37:05,880 --> 00:37:10,359 Speaker 4: employers to make contributions, for philanthropies to make contributions over 765 00:37:10,440 --> 00:37:14,560 Speaker 4: time on hopefully a tax advantaged basis, and folks are 766 00:37:14,600 --> 00:37:17,680 Speaker 4: going to see the way compounding really works. So it's 767 00:37:17,719 --> 00:37:20,239 Speaker 4: not the one thousand dollars contribution, which, as you said, 768 00:37:20,280 --> 00:37:21,879 Speaker 4: is kind of a drop in the bucket at least 769 00:37:21,920 --> 00:37:25,279 Speaker 4: as it you know, as a burden on society. It's 770 00:37:25,320 --> 00:37:28,000 Speaker 4: the it's you know, what can you pull together from 771 00:37:28,000 --> 00:37:30,000 Speaker 4: all of the different constituents that are going to want 772 00:37:30,040 --> 00:37:33,040 Speaker 4: to contribute to a program like this. So we're we're 773 00:37:33,120 --> 00:37:36,600 Speaker 4: really excited, and you know, I think that ultimately, I 774 00:37:36,600 --> 00:37:39,560 Speaker 4: hope this will dovetail with retirement security. You know, you 775 00:37:40,000 --> 00:37:42,560 Speaker 4: said it when when you ask what can happen in 776 00:37:42,640 --> 00:37:45,960 Speaker 4: fifty or seventy five years. I think initially, you know, 777 00:37:46,000 --> 00:37:49,600 Speaker 4: the thought is these might help fund college education and 778 00:37:49,640 --> 00:37:51,640 Speaker 4: by the way with a little bit of contributions. On 779 00:37:51,680 --> 00:37:54,640 Speaker 4: an ongoing basis, it will fund a college education with 780 00:37:55,000 --> 00:37:58,480 Speaker 4: the compounding. But over time, there's six or seven of 781 00:37:58,480 --> 00:38:00,719 Speaker 4: these programs, and eventually, you know, maybe we can pull 782 00:38:00,760 --> 00:38:04,400 Speaker 4: them all together and create a national program that actually 783 00:38:04,480 --> 00:38:05,960 Speaker 4: funds people's retirement. 784 00:38:06,239 --> 00:38:09,840 Speaker 2: Coming up, we continue our conversation with Zach Buckwald, he's 785 00:38:09,920 --> 00:38:14,239 Speaker 2: chairman and chief executive officer of Russell Investments, discussing the 786 00:38:14,360 --> 00:38:18,560 Speaker 2: state of markets today. I'm Barry Ritolts. You're listening to 787 00:38:18,680 --> 00:38:36,399 Speaker 2: Masters in Business on Bloomberg Radio. I'm Barry Ridholts. You're 788 00:38:36,440 --> 00:38:40,120 Speaker 2: listening to Masters in Business on Bloomberg Radio. My extra 789 00:38:40,200 --> 00:38:43,480 Speaker 2: special guest this week is Zach Buckwald. He's chairman and 790 00:38:43,560 --> 00:38:47,320 Speaker 2: chief executive officer of Russell Investments. The firm was founded 791 00:38:47,320 --> 00:38:50,200 Speaker 2: in nineteen thirty six and runs about three hundred and 792 00:38:50,239 --> 00:38:54,919 Speaker 2: seventy billion dollars. Zach joined Russell in twenty twenty three, 793 00:38:55,040 --> 00:38:59,719 Speaker 2: coming from his previous career at Blackrock. I'm a fan 794 00:38:59,800 --> 00:39:04,279 Speaker 2: of using milestones as an excuse to give some sort 795 00:39:04,280 --> 00:39:08,120 Speaker 2: of a gift. You can see sweet sixteen's or kid 796 00:39:08,160 --> 00:39:11,959 Speaker 2: turns thirteen, or whatever it is. Grandma and grandpa write 797 00:39:11,960 --> 00:39:14,800 Speaker 2: a check and put it right into their account. Here's 798 00:39:14,840 --> 00:39:18,040 Speaker 2: some Eli Lilly, or here's some whatever SMP five hundred. 799 00:39:18,600 --> 00:39:21,799 Speaker 2: Knock yourself out, and that's going to just appreciate over 800 00:39:21,840 --> 00:39:25,560 Speaker 2: the next X number of decades. It could really make 801 00:39:25,600 --> 00:39:31,840 Speaker 2: a substantial difference in the retirement of people who have 802 00:39:32,000 --> 00:39:33,080 Speaker 2: yet to even be born. 803 00:39:33,560 --> 00:39:35,960 Speaker 4: It's absolutely true. And by the way, it's investing in 804 00:39:37,080 --> 00:39:38,400 Speaker 4: the US stock market. 805 00:39:38,160 --> 00:39:40,920 Speaker 2: Right, so I'm assuming the S and P five hundred 806 00:39:41,000 --> 00:39:46,200 Speaker 2: would count. And any of the Microsoft or Lily or whatever, Apple, Amazon, 807 00:39:46,239 --> 00:39:50,160 Speaker 2: whatever big tech company you're enthusiastic about, I would recommend 808 00:39:50,200 --> 00:39:53,520 Speaker 2: a broader, more diversified approach than a single stock. I 809 00:39:53,640 --> 00:39:57,200 Speaker 2: mentioned Lily because I just know a friend just put 810 00:39:57,200 --> 00:40:01,439 Speaker 2: a bunch of Lily stock in his nephew's account and 811 00:40:01,800 --> 00:40:03,560 Speaker 2: I'm like, oh, what are you doing there for. He's like, 812 00:40:04,400 --> 00:40:06,360 Speaker 2: just doing a transfer. It's tax free and don't have 813 00:40:06,400 --> 00:40:07,080 Speaker 2: to worry about it. 814 00:40:07,200 --> 00:40:09,239 Speaker 4: Well, I'm not a stock picker, but but Lily's a 815 00:40:09,239 --> 00:40:12,600 Speaker 4: great company. Having diversified exposure in these in these accounts 816 00:40:12,600 --> 00:40:15,600 Speaker 4: is the way to go. And you know, listen, a 817 00:40:15,680 --> 00:40:19,040 Speaker 4: generation ago, Barry, the version of that was not so 818 00:40:19,120 --> 00:40:22,879 Speaker 4: much Lily stock. It was very typically a US Treasury bond, right, 819 00:40:23,000 --> 00:40:25,440 Speaker 4: that's what you got when you turn thirteen or sixteen 820 00:40:25,560 --> 00:40:28,959 Speaker 4: or had that milestone birthday, and a Treasury bond. 821 00:40:28,960 --> 00:40:31,400 Speaker 3: In the long term, you know, you'd rather be in 822 00:40:31,440 --> 00:40:32,040 Speaker 3: the stock market. 823 00:40:32,160 --> 00:40:34,120 Speaker 2: You get you don't want to two and a half 824 00:40:34,200 --> 00:40:37,640 Speaker 2: percent I had above inflation. That doesn't excite you. 825 00:40:37,719 --> 00:40:41,040 Speaker 3: I'd rather have the long term return of the S. 826 00:40:41,000 --> 00:40:44,160 Speaker 2: And P for sure, especially if it's a new born 827 00:40:44,320 --> 00:40:49,000 Speaker 2: or even a teenager, their investment window is sixty seventy years. 828 00:40:48,719 --> 00:40:49,960 Speaker 3: That's exactly right. 829 00:40:50,040 --> 00:40:52,560 Speaker 4: And the trick here is you have to get people 830 00:40:52,600 --> 00:40:55,640 Speaker 4: to actually understand because that's sixteen year old. When they're 831 00:40:55,640 --> 00:40:58,080 Speaker 4: twenty two, they're going to get a job that's going 832 00:40:58,160 --> 00:41:00,040 Speaker 4: to have a four to one k and there I 833 00:41:00,080 --> 00:41:03,319 Speaker 4: have to understand, why am I taking six percent out 834 00:41:03,360 --> 00:41:05,279 Speaker 4: of my you know, out of my paycheck when you know, 835 00:41:05,680 --> 00:41:07,839 Speaker 4: my starting salary might not even be enough to get 836 00:41:07,880 --> 00:41:09,400 Speaker 4: you know, to pay my rent and my other bills. 837 00:41:09,400 --> 00:41:10,560 Speaker 3: Why would I want to do that? 838 00:41:11,120 --> 00:41:13,920 Speaker 4: And they really, if they understand the power of compounding 839 00:41:13,920 --> 00:41:16,440 Speaker 4: and the long term implications of that, they're gonna they're 840 00:41:16,480 --> 00:41:17,319 Speaker 4: going to buy into it. 841 00:41:17,920 --> 00:41:20,160 Speaker 2: I really didn't think about my four oh one K 842 00:41:20,239 --> 00:41:23,640 Speaker 2: in televis in my thirties, Right, But if I actually 843 00:41:23,719 --> 00:41:26,960 Speaker 2: had money put in account when I was born, by 844 00:41:27,000 --> 00:41:29,279 Speaker 2: the time you're twenty five, you're going to see some 845 00:41:29,400 --> 00:41:31,239 Speaker 2: impact from compounding. 846 00:41:31,160 --> 00:41:34,319 Speaker 4: One hundred percent. Well, I'm not too worried about you, Barry. Well, 847 00:41:34,719 --> 00:41:36,879 Speaker 4: I'll be all right, You'll be you'll be all right. 848 00:41:37,280 --> 00:41:39,120 Speaker 4: But you know, but think about all those folks that 849 00:41:39,200 --> 00:41:41,600 Speaker 4: don't you know, the average income in America is still 850 00:41:41,640 --> 00:41:44,040 Speaker 4: seventy thousand dollars, right, all those folks that don't have 851 00:41:44,160 --> 00:41:48,239 Speaker 4: access to uh to investments, and they're not thinking about 852 00:41:48,680 --> 00:41:50,360 Speaker 4: am I going to be able to make my contribution 853 00:41:50,440 --> 00:41:52,560 Speaker 4: at age twenty two, because they're thinking about can I 854 00:41:52,600 --> 00:41:52,920 Speaker 4: can I. 855 00:41:52,840 --> 00:41:53,359 Speaker 2: Pay my rent? 856 00:41:53,360 --> 00:41:54,239 Speaker 3: Afford to pay my rent? 857 00:41:54,320 --> 00:41:57,239 Speaker 2: Right, the bottom half of the economic strata in this country, 858 00:41:57,600 --> 00:42:00,920 Speaker 2: And we're having this conversation on election day in New 859 00:42:01,000 --> 00:42:05,120 Speaker 2: York where it looks like at least the leader up 860 00:42:06,000 --> 00:42:09,080 Speaker 2: up until today has been someone who describes themselves as 861 00:42:09,120 --> 00:42:13,760 Speaker 2: a socialist and has made affordability their their key campaign theme. 862 00:42:14,640 --> 00:42:17,080 Speaker 2: This is going to be an ongoing issue, especially for 863 00:42:17,160 --> 00:42:19,920 Speaker 2: the bottom half of earners and savers. 864 00:42:20,040 --> 00:42:23,040 Speaker 3: That's right. We're not a political organization at Russell. 865 00:42:23,120 --> 00:42:26,560 Speaker 4: But I do concur affordability is the issue, and I 866 00:42:26,600 --> 00:42:28,440 Speaker 4: think it's not a left issue. I think it's an 867 00:42:28,480 --> 00:42:31,839 Speaker 4: issue for everybody, almost everybody in this country, and we're 868 00:42:31,840 --> 00:42:34,360 Speaker 4: going to be hearing a lot about it from all sides. 869 00:42:34,920 --> 00:42:35,080 Speaker 2: You know. 870 00:42:35,120 --> 00:42:38,719 Speaker 3: I wrote a piece after the Baby. 871 00:42:38,480 --> 00:42:40,359 Speaker 4: Accounts, which they call the Trump accounts, by the way, 872 00:42:40,880 --> 00:42:43,320 Speaker 4: after that became part of the legislation, I wrote a 873 00:42:43,360 --> 00:42:46,600 Speaker 4: piece that The Washington Post published that essentially described what 874 00:42:46,640 --> 00:42:48,600 Speaker 4: these accounts are and the impact that it can have 875 00:42:48,719 --> 00:42:52,120 Speaker 4: in terms of helping to educate our population about the 876 00:42:52,160 --> 00:42:54,080 Speaker 4: power of investing and compounding. 877 00:42:54,680 --> 00:42:57,120 Speaker 3: And it was very interesting to see the commentary. 878 00:42:57,160 --> 00:42:58,719 Speaker 4: You know, when you publish something in the journal or 879 00:42:59,680 --> 00:43:01,760 Speaker 4: you get a lot of you get a lot of comments, 880 00:43:01,800 --> 00:43:05,640 Speaker 4: and by and large, the vast majority of the comments said, 881 00:43:05,760 --> 00:43:09,080 Speaker 4: why wouldn't you just write us a refund check, which 882 00:43:09,160 --> 00:43:10,840 Speaker 4: is what we got during COVID, by the way, like 883 00:43:10,880 --> 00:43:12,000 Speaker 4: stimulus type checks. 884 00:43:12,480 --> 00:43:14,440 Speaker 3: And it was the opposite of the point that I 885 00:43:14,480 --> 00:43:14,960 Speaker 3: was trying to right. 886 00:43:15,120 --> 00:43:16,680 Speaker 2: We don't want you to spend this, we want you 887 00:43:16,760 --> 00:43:17,319 Speaker 2: to save this. 888 00:43:17,360 --> 00:43:19,520 Speaker 4: I have to say it again to understand what the 889 00:43:19,520 --> 00:43:21,920 Speaker 4: difference is from a savings account or a treasury bond 890 00:43:22,080 --> 00:43:24,320 Speaker 4: and versus investing it into the markets and getting to 891 00:43:24,360 --> 00:43:28,440 Speaker 4: see long, long term compounding. So it was honestly, it 892 00:43:28,480 --> 00:43:30,719 Speaker 4: was a little bit of a refresher for me that 893 00:43:30,760 --> 00:43:32,759 Speaker 4: we have a lot of work to do to help 894 00:43:32,760 --> 00:43:35,120 Speaker 4: people understand why a program like this can actually help them. 895 00:43:35,640 --> 00:43:38,480 Speaker 2: As someone who's been writing in public for nearly thirty years, 896 00:43:38,800 --> 00:43:42,240 Speaker 2: my best advice to he is simply never read the comment. 897 00:43:43,120 --> 00:43:46,480 Speaker 2: There was a golden era of blogs and like the 898 00:43:46,560 --> 00:43:49,799 Speaker 2: early to mid two thousands where the comments were these 899 00:43:49,920 --> 00:43:53,960 Speaker 2: like fantastic communities. All of that is kind of migrated 900 00:43:54,000 --> 00:43:58,000 Speaker 2: to Reddit. If you want to see lightly moderated, intelligent 901 00:43:58,080 --> 00:44:02,840 Speaker 2: debates with some nonsense and is thrown in along the way, 902 00:44:03,280 --> 00:44:08,759 Speaker 2: that's that's what's left of that sort of issue. I 903 00:44:08,800 --> 00:44:12,520 Speaker 2: think even YouTube used to do a better job at 904 00:44:12,600 --> 00:44:16,360 Speaker 2: moderating the comments. The spam and the bots still slip 905 00:44:16,400 --> 00:44:17,239 Speaker 2: in every now and then. 906 00:44:17,400 --> 00:44:20,399 Speaker 4: It does give you a perspective on what's on people's minds, though, 907 00:44:20,440 --> 00:44:23,640 Speaker 4: even though some of the comments are like unhinged, you 908 00:44:23,640 --> 00:44:26,720 Speaker 4: can tell like what's coming through what what are people's 909 00:44:26,760 --> 00:44:29,080 Speaker 4: you know, fears and worries and concerns. If you can, 910 00:44:29,160 --> 00:44:31,160 Speaker 4: if you can read it through the you know, the craziness. 911 00:44:31,280 --> 00:44:32,759 Speaker 2: Yeah, you have to. You have to fight your way 912 00:44:32,800 --> 00:44:36,239 Speaker 2: through it. It's kind of fascinating because I'm going to 913 00:44:36,560 --> 00:44:39,920 Speaker 2: just digress for a moment. We all are subject to 914 00:44:40,000 --> 00:44:45,319 Speaker 2: these cognitive errors and these behavioral biases, and and it 915 00:44:45,520 --> 00:44:50,480 Speaker 2: very much shows up in people's portfolios and the decisions 916 00:44:51,000 --> 00:44:54,600 Speaker 2: they make. I wake up on a daylight today where 917 00:44:54,880 --> 00:44:57,759 Speaker 2: Nasdaq is down one and a half percent, I know 918 00:44:57,760 --> 00:45:00,440 Speaker 2: I'm gonna see a bunch of emails. A told us 919 00:45:00,480 --> 00:45:02,800 Speaker 2: to stay long, and look, we're down one and a 920 00:45:02,840 --> 00:45:05,400 Speaker 2: half percent today. I knew I should have gotten out 921 00:45:05,440 --> 00:45:07,160 Speaker 2: of the market. So what are you talking about? We're 922 00:45:07,200 --> 00:45:10,440 Speaker 2: up seventeen percent for the year, and then Nazdek's up 923 00:45:10,440 --> 00:45:13,400 Speaker 2: twenty three percent. This is the price of admission. You 924 00:45:13,400 --> 00:45:15,600 Speaker 2: have to deal with some volatility. 925 00:45:15,880 --> 00:45:17,520 Speaker 4: I mean this is a place, by the way, where 926 00:45:17,560 --> 00:45:21,160 Speaker 4: technology has not actually served people in their retirement portfolios. 927 00:45:21,160 --> 00:45:22,840 Speaker 4: Because if you can pull up your phone and in 928 00:45:22,880 --> 00:45:26,279 Speaker 4: three seconds, you know you work as a teacher or 929 00:45:26,360 --> 00:45:28,720 Speaker 4: a nurse or whatever, and you pull up your phone 930 00:45:29,040 --> 00:45:30,920 Speaker 4: and in three seconds you see your portfolio is down 931 00:45:30,960 --> 00:45:32,920 Speaker 4: one and a half percent, and at some level it 932 00:45:32,960 --> 00:45:35,960 Speaker 4: flips a switch and you think my portfolio is in 933 00:45:36,000 --> 00:45:38,239 Speaker 4: trouble or I should sell. Like that's how you get 934 00:45:38,280 --> 00:45:40,400 Speaker 4: to really bad decisions because we all you know, we 935 00:45:40,440 --> 00:45:43,120 Speaker 4: all know long term like if you're men, if you're. 936 00:45:42,920 --> 00:45:45,680 Speaker 2: Do we all know that, because I'm not sure everybody does, 937 00:45:45,960 --> 00:45:50,840 Speaker 2: and there's such an inherent bias towards action. Don't just 938 00:45:50,880 --> 00:45:54,000 Speaker 2: sit there do something right that that just seems to 939 00:45:54,000 --> 00:45:55,400 Speaker 2: be human nature. 940 00:45:55,680 --> 00:45:58,799 Speaker 4: It's anathma to how you're supposed to manage a retirement portfolio. Though, 941 00:45:59,360 --> 00:46:02,600 Speaker 4: by the way, you can make adjustments over time, but 942 00:46:02,760 --> 00:46:04,560 Speaker 4: the goal is not to pull out when you think 943 00:46:04,600 --> 00:46:06,120 Speaker 4: the market is going to be down. We all know 944 00:46:06,160 --> 00:46:08,640 Speaker 4: that the bounce backs, by the way, happen faster and 945 00:46:08,719 --> 00:46:11,480 Speaker 4: stronger than ever. I mean, you think about like what 946 00:46:11,560 --> 00:46:13,920 Speaker 4: the bounce back looked like during the financial crisis of 947 00:46:14,040 --> 00:46:17,239 Speaker 4: during the dot com bus, it took years to bounce back, 948 00:46:17,480 --> 00:46:20,759 Speaker 4: and then you think about COVID or even April or 949 00:46:20,840 --> 00:46:23,600 Speaker 4: Liberation Day, Right, the bounce back happened a week, yeah, 950 00:46:23,640 --> 00:46:27,480 Speaker 4: almost instantly and stronger than before. So you know, this 951 00:46:27,560 --> 00:46:29,799 Speaker 4: is a case where the phone really does not help you, right, 952 00:46:29,840 --> 00:46:31,440 Speaker 4: if you're going to make a decision to pull out 953 00:46:31,480 --> 00:46:33,279 Speaker 4: because you see something going on in the markets on 954 00:46:34,000 --> 00:46:36,839 Speaker 4: an off day, and you know, as we're as we're 955 00:46:36,840 --> 00:46:40,239 Speaker 4: thinking through how to implement new programs like the Trump accounts. 956 00:46:40,440 --> 00:46:41,759 Speaker 4: You know, my goal is you want to have like 957 00:46:41,800 --> 00:46:43,600 Speaker 4: lots of transparency, but you don't want to make it 958 00:46:43,600 --> 00:46:45,560 Speaker 4: easy for people to make bad decisions. You have to 959 00:46:45,560 --> 00:46:47,160 Speaker 4: help them make good long term decisions. 960 00:46:47,640 --> 00:46:50,359 Speaker 2: A little bit of choice architecture that prevents those sort 961 00:46:50,400 --> 00:46:53,840 Speaker 2: of things. Last question before I get to the standard questions, 962 00:46:53,920 --> 00:46:56,359 Speaker 2: we ask all of our guests, what do you think 963 00:46:56,400 --> 00:46:59,600 Speaker 2: investors are not talking about but perhaps should be What 964 00:47:00,120 --> 00:47:05,600 Speaker 2: the important overlook topics, assets, geography, policy, whatever that that 965 00:47:05,640 --> 00:47:07,800 Speaker 2: should be getting a little more following. 966 00:47:07,960 --> 00:47:11,440 Speaker 4: Yeah, well, Barry, I'm still really positive on AI and 967 00:47:11,480 --> 00:47:14,000 Speaker 4: how much more room to run we have. You know, 968 00:47:14,040 --> 00:47:16,400 Speaker 4: there's been so much to talk about about how we 969 00:47:16,440 --> 00:47:18,520 Speaker 4: haven't seen a broadening in the markets. You know, most 970 00:47:18,520 --> 00:47:22,200 Speaker 4: of the value capture has happened within the technology industry. 971 00:47:22,640 --> 00:47:25,480 Speaker 4: But you know, but I think every sector is going 972 00:47:25,560 --> 00:47:29,200 Speaker 4: to be transformed. Almost every sector transformed by AI as 973 00:47:29,280 --> 00:47:32,000 Speaker 4: much as it was by by the Internet, and we 974 00:47:32,160 --> 00:47:34,239 Speaker 4: just haven't seen that come through yet. But I can 975 00:47:34,280 --> 00:47:37,399 Speaker 4: tell you every company that we invest in is thinking 976 00:47:37,440 --> 00:47:39,440 Speaker 4: about this and working on it behind the scenes, even 977 00:47:39,480 --> 00:47:41,719 Speaker 4: if it's not showing up yet in their in their 978 00:47:41,800 --> 00:47:45,080 Speaker 4: quarterly earnings reports. But it's all happening, and you're going 979 00:47:45,160 --> 00:47:46,719 Speaker 4: to start seeing by the way, you'll see winners and 980 00:47:46,800 --> 00:47:50,000 Speaker 4: losers both, you know, sort of specific companies and sectors. 981 00:47:50,760 --> 00:47:53,880 Speaker 4: But there's going to be enormous amounts of efficiency gains 982 00:47:54,040 --> 00:47:57,000 Speaker 4: and enormous amounts of you know, sort of value creation 983 00:47:57,200 --> 00:47:59,080 Speaker 4: that happens as a result of that. And I don't 984 00:47:59,080 --> 00:48:00,880 Speaker 4: think it's going to be a straight but I do 985 00:48:00,920 --> 00:48:03,640 Speaker 4: think it's coming shorter term rather than rather than just 986 00:48:03,680 --> 00:48:04,400 Speaker 4: longer term. 987 00:48:04,600 --> 00:48:08,120 Speaker 2: Back in twenty nineteen, I interviewed Joe Davis, who's the 988 00:48:08,239 --> 00:48:12,880 Speaker 2: chief economist at Vanguard, and they had this fascinating research report. 989 00:48:12,920 --> 00:48:18,120 Speaker 2: Eventually it became a book that all technological innovations take 990 00:48:18,200 --> 00:48:21,480 Speaker 2: place in two phases. The first phase is kind of 991 00:48:21,520 --> 00:48:26,840 Speaker 2: what we're experiencing right now in AI, which is wild prices, 992 00:48:26,920 --> 00:48:30,479 Speaker 2: a couple of everybody knows a handful of companies very 993 00:48:30,880 --> 00:48:34,239 Speaker 2: boom boom, like some people have been too many. A 994 00:48:34,239 --> 00:48:36,359 Speaker 2: lot of people have been calling it a bubble. The 995 00:48:36,440 --> 00:48:39,680 Speaker 2: second phase is where the value creation spreads out to 996 00:48:39,760 --> 00:48:43,520 Speaker 2: the rest of rest of the market, rest of the industry, 997 00:48:43,520 --> 00:48:46,160 Speaker 2: rest of the economy. I see it the same way 998 00:48:46,239 --> 00:48:48,319 Speaker 2: you do. This is just going to make all of 999 00:48:48,400 --> 00:48:50,799 Speaker 2: us more efficient, more productive, more profitable. 1000 00:48:50,920 --> 00:48:53,000 Speaker 4: Right, That's exactly how I see this playing out. And 1001 00:48:53,040 --> 00:48:55,080 Speaker 4: you still have to pay attention because you know, we 1002 00:48:55,120 --> 00:48:57,720 Speaker 4: all remember during the first the first dot com phase, 1003 00:48:57,760 --> 00:49:01,280 Speaker 4: before every company started incorporating the Internet into its business 1004 00:49:01,320 --> 00:49:05,040 Speaker 4: strategy and its operations, they were winners and they were losers, 1005 00:49:05,080 --> 00:49:07,160 Speaker 4: and and the winners are still around and there, you know, 1006 00:49:07,160 --> 00:49:11,080 Speaker 4: they essentially, you know, run global commerce today and the 1007 00:49:11,120 --> 00:49:13,400 Speaker 4: losers went away. We're going to see some of that 1008 00:49:13,520 --> 00:49:16,040 Speaker 4: across sectors, and you know that's something that investors need 1009 00:49:16,040 --> 00:49:18,759 Speaker 4: to pay close attention to. But you know, writ large, 1010 00:49:18,800 --> 00:49:19,959 Speaker 4: I see a lot of value creation. 1011 00:49:20,239 --> 00:49:20,399 Speaker 3: Huh. 1012 00:49:21,400 --> 00:49:23,600 Speaker 2: I'm always like to hear that sort of stuff. So 1013 00:49:23,719 --> 00:49:27,080 Speaker 2: let's jump into our favorite questions that we ask all 1014 00:49:27,120 --> 00:49:31,200 Speaker 2: of our guests, starting with tell us about your mentors 1015 00:49:31,239 --> 00:49:32,960 Speaker 2: who helped shape your career. 1016 00:49:33,080 --> 00:49:35,799 Speaker 4: Sure, I had a great mentor at Blackrock, a guy 1017 00:49:35,840 --> 00:49:38,560 Speaker 4: called Mark Mcomb who's a vice chairman of the company, 1018 00:49:38,600 --> 00:49:41,319 Speaker 4: and he put me into a couple of jobs, and 1019 00:49:41,360 --> 00:49:44,200 Speaker 4: he nurtured me and supported me. But he also he 1020 00:49:44,280 --> 00:49:46,680 Speaker 4: encouraged me to, you know, think like the outsider that 1021 00:49:46,760 --> 00:49:48,279 Speaker 4: I am. You know, when he put me into the 1022 00:49:48,320 --> 00:49:51,680 Speaker 4: insurance job without having an insurance background, he sort of said, 1023 00:49:51,719 --> 00:49:54,440 Speaker 4: bring you know, bring all the capabilities and the perspective 1024 00:49:54,440 --> 00:49:56,200 Speaker 4: that you have from all the other things that you've 1025 00:49:56,200 --> 00:49:58,359 Speaker 4: done and that you know, really helped us. I think 1026 00:49:58,400 --> 00:50:01,319 Speaker 4: like an external provider and grow that business. By the way, 1027 00:50:01,400 --> 00:50:04,040 Speaker 4: I'm a I'm I'm a gay guy in finance, So 1028 00:50:04,080 --> 00:50:07,680 Speaker 4: I come at it from a from an outsider's point 1029 00:50:07,719 --> 00:50:11,160 Speaker 4: of view kind of looking in and and that has 1030 00:50:11,920 --> 00:50:15,400 Speaker 4: informed just about everything that I do at you know, 1031 00:50:15,440 --> 00:50:20,760 Speaker 4: at Russell and and before that is thinking about what's working, 1032 00:50:20,880 --> 00:50:23,000 Speaker 4: what isn't working, What do I think we might be 1033 00:50:23,040 --> 00:50:24,960 Speaker 4: able to do better? What have we not you know, 1034 00:50:25,000 --> 00:50:27,160 Speaker 4: the question that you asked, what are people not talking about? 1035 00:50:27,160 --> 00:50:29,400 Speaker 4: What have we not asked about? And that's you know, 1036 00:50:29,480 --> 00:50:32,360 Speaker 4: often my my starting point. And I think if I 1037 00:50:32,400 --> 00:50:35,160 Speaker 4: had come in with the insider status, it would have 1038 00:50:35,160 --> 00:50:36,760 Speaker 4: been harder for me to take that perspective. 1039 00:50:37,040 --> 00:50:41,440 Speaker 2: That's really interesting. It's affected your perspective. You see the 1040 00:50:41,440 --> 00:50:45,080 Speaker 2: world both as a participant but also an outsider. 1041 00:50:45,160 --> 00:50:45,759 Speaker 3: Yeah, that's right. 1042 00:50:45,800 --> 00:50:47,120 Speaker 4: And you know, this is the first time I've been 1043 00:50:47,160 --> 00:50:49,120 Speaker 4: to Bloomberg in a couple of years. But when I 1044 00:50:49,160 --> 00:50:52,239 Speaker 4: when I took the job at at Russell, even before 1045 00:50:52,239 --> 00:50:54,840 Speaker 4: i'd started, Bloomberg invited me to come speak at a conference. 1046 00:50:54,880 --> 00:50:56,759 Speaker 4: And I was, you know, flattered and excited. And then 1047 00:50:56,800 --> 00:50:59,800 Speaker 4: I learned it was their diversity conference and I was 1048 00:50:59,880 --> 00:51:03,560 Speaker 4: the gay CEO, and and I said, invite me back 1049 00:51:03,600 --> 00:51:06,040 Speaker 4: five times to talk about investing in retirement, and on 1050 00:51:06,080 --> 00:51:08,560 Speaker 4: the sixth time, I'll come talk about diversity. 1051 00:51:08,719 --> 00:51:10,920 Speaker 2: Huh, that's interesting. You know in all the research we 1052 00:51:11,680 --> 00:51:14,359 Speaker 2: do that did not come up in anything. It's not 1053 00:51:14,760 --> 00:51:18,800 Speaker 2: it's not anything that bubbles up to the top of search. 1054 00:51:19,680 --> 00:51:21,640 Speaker 2: Although the old joke is if you if you want 1055 00:51:21,640 --> 00:51:24,200 Speaker 2: to hide something, disclose it at the end of an 1056 00:51:24,200 --> 00:51:27,560 Speaker 2: hour long podcast. Now, no, I'll hear it. But you 1057 00:51:27,600 --> 00:51:30,680 Speaker 2: know what it's like with all the YouTube there's a 1058 00:51:30,760 --> 00:51:34,399 Speaker 2: drop off. But I always find that that amusing. Let's 1059 00:51:34,440 --> 00:51:36,480 Speaker 2: talk about books. What are some of your favorites. What 1060 00:51:36,480 --> 00:51:37,799 Speaker 2: are you reading right now? 1061 00:51:37,880 --> 00:51:40,040 Speaker 4: Yeah, so I read a lot of fiction, like you know, Kormick, 1062 00:51:40,080 --> 00:51:42,719 Speaker 4: McCarthy and Tyler. I'm reading a book called The inheritance 1063 00:51:42,800 --> 00:51:46,640 Speaker 4: right now, which is like a family drama. It's an 1064 00:51:46,760 --> 00:51:48,640 Speaker 4: escapist for me to get away from. I don't read 1065 00:51:48,680 --> 00:51:49,680 Speaker 4: a lot of finance books. 1066 00:51:50,360 --> 00:51:52,759 Speaker 2: I'm the same way every now and then something will 1067 00:51:53,040 --> 00:51:54,879 Speaker 2: you know, come across that I have to read that's 1068 00:51:54,920 --> 00:51:58,360 Speaker 2: finance related. I have a big stack of fiction waiting 1069 00:51:58,400 --> 00:52:02,240 Speaker 2: to go on vacation with me next month. Let's talk 1070 00:52:02,360 --> 00:52:05,359 Speaker 2: about streaming. What are you watching or listening to? What's 1071 00:52:05,400 --> 00:52:08,760 Speaker 2: keeping you entertained? It's either on Netflix or Amazon or whatever. 1072 00:52:08,920 --> 00:52:11,719 Speaker 4: Yeah, it's all toddler fair right now. I've got two 1073 00:52:11,760 --> 00:52:13,720 Speaker 4: three year olds in the house, so we've got twins. 1074 00:52:13,840 --> 00:52:14,200 Speaker 3: Twins. 1075 00:52:14,280 --> 00:52:17,640 Speaker 4: Yeah, it's you know, all full time Moana and Frozen 1076 00:52:17,880 --> 00:52:21,400 Speaker 4: and Daniel Tiger, bubblegup bees that sort of stuff. 1077 00:52:21,520 --> 00:52:25,080 Speaker 2: Huh so, so a lot of Moana. That's that's my 1078 00:52:25,160 --> 00:52:26,600 Speaker 2: idea of a nightmare. 1079 00:52:26,600 --> 00:52:28,759 Speaker 3: It's just Mowana's pretty awesome. 1080 00:52:28,440 --> 00:52:30,600 Speaker 2: Actually the first three times you see it. 1081 00:52:30,480 --> 00:52:33,600 Speaker 4: The first three times, and Frozen about twice. 1082 00:52:34,280 --> 00:52:37,760 Speaker 2: So our final two questions, what sort of advice would 1083 00:52:37,760 --> 00:52:40,239 Speaker 2: you give to a recent college grad interest in the 1084 00:52:40,320 --> 00:52:44,160 Speaker 2: career in either finance or investing. H What would you 1085 00:52:44,200 --> 00:52:44,960 Speaker 2: tell them? 1086 00:52:45,320 --> 00:52:48,120 Speaker 4: Yeah, first, like, you know, be yourself, like we look 1087 00:52:48,160 --> 00:52:50,960 Speaker 4: for people at Russell from all different kinds of backgrounds, 1088 00:52:51,040 --> 00:52:53,480 Speaker 4: not just economics or finance background. Study what you want 1089 00:52:53,520 --> 00:52:56,160 Speaker 4: to study, do well, and you know, be committed. But 1090 00:52:57,200 --> 00:52:59,080 Speaker 4: you know, if you come at it from an outsider's 1091 00:52:59,400 --> 00:53:02,040 Speaker 4: you know, stay or point of view and embrace that 1092 00:53:02,040 --> 00:53:05,000 Speaker 4: that's you know, this is a world where we want 1093 00:53:05,040 --> 00:53:10,600 Speaker 4: folks that have different kinds of backgrounds and approaches. You know, 1094 00:53:10,640 --> 00:53:13,560 Speaker 4: I studied English Barry and one advantage that that actually 1095 00:53:13,560 --> 00:53:15,160 Speaker 4: gave me early on in my career was that I 1096 00:53:15,200 --> 00:53:16,919 Speaker 4: knew how to write. And you know, you think about 1097 00:53:16,960 --> 00:53:19,800 Speaker 4: how much of our of our business is done through writing, 1098 00:53:19,800 --> 00:53:21,440 Speaker 4: through email and other ways. 1099 00:53:22,640 --> 00:53:24,160 Speaker 3: Everything you write, this is the advice. 1100 00:53:24,200 --> 00:53:26,920 Speaker 4: Now, everything you write is a reflection of you, and 1101 00:53:27,000 --> 00:53:29,080 Speaker 4: it can come up and you know, something you put 1102 00:53:29,080 --> 00:53:31,040 Speaker 4: down on paper can come up again and again in 1103 00:53:31,080 --> 00:53:32,400 Speaker 4: all sorts of different ways. 1104 00:53:32,440 --> 00:53:34,279 Speaker 3: We all know that when you put something on. 1105 00:53:34,239 --> 00:53:37,400 Speaker 4: The Internet, it lives forever, truly, and you know your 1106 00:53:37,520 --> 00:53:39,319 Speaker 4: careers are long. You want to make sure that you're 1107 00:53:40,400 --> 00:53:42,760 Speaker 4: you're properly reflecting the image that you want to create. 1108 00:53:43,760 --> 00:53:47,279 Speaker 2: Good advice And our final question, by the way that 1109 00:53:47,400 --> 00:53:51,280 Speaker 2: advice applies not only to writing, yes, but my wife 1110 00:53:52,280 --> 00:53:54,839 Speaker 2: is a recently retired teacher and she used always one 1111 00:53:54,880 --> 00:53:58,000 Speaker 2: of the kids. All the stuff you're putting on Facebook 1112 00:53:58,080 --> 00:54:02,560 Speaker 2: and Instagram and TikTok, be aware the colleges you're applying 1113 00:54:02,560 --> 00:54:04,640 Speaker 2: to are looking at that, and the jobs you're going 1114 00:54:04,680 --> 00:54:07,560 Speaker 2: to apply to they going to find that, especially as 1115 00:54:07,600 --> 00:54:10,880 Speaker 2: you work your way up up the corporate ladder, that 1116 00:54:10,960 --> 00:54:12,640 Speaker 2: stuff never goes away. 1117 00:54:12,760 --> 00:54:15,080 Speaker 4: That's right, And now I'll give you a counterpoint. You know, 1118 00:54:15,280 --> 00:54:18,440 Speaker 4: we do three sixty reviews at Russell and sometimes you know, 1119 00:54:18,600 --> 00:54:20,680 Speaker 4: people that are relatively new in their careers, twenty five 1120 00:54:20,760 --> 00:54:22,920 Speaker 4: or twenty eight year old will write a review on 1121 00:54:23,120 --> 00:54:25,120 Speaker 4: somebody that they work for a couple levels up that 1122 00:54:25,200 --> 00:54:28,560 Speaker 4: I read. And when I read a review that somebody 1123 00:54:28,600 --> 00:54:30,359 Speaker 4: has put a lot of thought into and there's some 1124 00:54:30,440 --> 00:54:33,360 Speaker 4: you know, praise and constructive criticism, how to make things better? 1125 00:54:33,680 --> 00:54:36,280 Speaker 4: I say to myself, this person would make a good manager, 1126 00:54:36,560 --> 00:54:38,560 Speaker 4: and I think about how can we use them in 1127 00:54:38,600 --> 00:54:41,080 Speaker 4: other places in the company. So it's not just about 1128 00:54:41,120 --> 00:54:43,400 Speaker 4: like when you're writing about avoiding the things that you 1129 00:54:43,440 --> 00:54:45,239 Speaker 4: don't want out there in the world that can harm you. 1130 00:54:45,320 --> 00:54:47,840 Speaker 4: It's also making sure that you're putting the time and 1131 00:54:47,880 --> 00:54:50,080 Speaker 4: the effort into writing things that are really going to 1132 00:54:50,120 --> 00:54:50,400 Speaker 4: help you. 1133 00:54:51,360 --> 00:54:56,560 Speaker 2: Really really interesting observation and good advice for people just 1134 00:54:56,760 --> 00:55:00,640 Speaker 2: entering the workforce. Final question, how do you know about 1135 00:55:00,680 --> 00:55:03,280 Speaker 2: the world of investing today that would have been useful 1136 00:55:04,520 --> 00:55:06,680 Speaker 2: thirty years ago when you were first getting started. 1137 00:55:07,120 --> 00:55:10,160 Speaker 4: I wish that thirty years ago I had the confidence 1138 00:55:10,200 --> 00:55:12,799 Speaker 4: to know that, you know that as an outsider, as 1139 00:55:12,800 --> 00:55:16,080 Speaker 4: a gay person, as an English major, someone coming at 1140 00:55:16,120 --> 00:55:19,359 Speaker 4: it from a different background, that I could make it 1141 00:55:19,440 --> 00:55:21,960 Speaker 4: in this business, that I didn't have to constantly think 1142 00:55:22,000 --> 00:55:24,560 Speaker 4: about how am I going to prove myself, but just 1143 00:55:24,600 --> 00:55:28,200 Speaker 4: by being a good, productive contributor by raising my hand, 1144 00:55:28,600 --> 00:55:31,759 Speaker 4: you know, and showing a little bit of ambition, by 1145 00:55:31,800 --> 00:55:35,680 Speaker 4: finding ways to help that that can be enough. And 1146 00:55:35,840 --> 00:55:39,839 Speaker 4: sometimes that being an outsider can actually be a good thing. 1147 00:55:40,120 --> 00:55:43,239 Speaker 4: You know that it can help you re underwrite situations 1148 00:55:43,239 --> 00:55:45,560 Speaker 4: and come at it from a different angle. And if 1149 00:55:45,600 --> 00:55:47,640 Speaker 4: you know that and you're confident in it and you 1150 00:55:47,760 --> 00:55:49,920 Speaker 4: use it to your advantage, it can really help you 1151 00:55:50,120 --> 00:55:53,200 Speaker 4: in your career. I figured that out along the way. 1152 00:55:53,920 --> 00:55:56,120 Speaker 4: It would have been helpful to know when I first started. 1153 00:55:56,200 --> 00:55:59,279 Speaker 2: Really really fascinating stuff. Thank you, Zach for being so 1154 00:55:59,400 --> 00:56:00,560 Speaker 2: generous with you your time. 1155 00:56:00,880 --> 00:56:01,680 Speaker 3: We have been. 1156 00:56:01,600 --> 00:56:05,400 Speaker 2: Speaking with Zach Buckwald. He's chairman and chief executive officer 1157 00:56:05,880 --> 00:56:09,960 Speaker 2: of Russell Investments. If you enjoy this conversation, check out 1158 00:56:10,000 --> 00:56:12,800 Speaker 2: any of the five hundred and eighty nine we've done 1159 00:56:12,920 --> 00:56:18,920 Speaker 2: over the previous eleven years. You can find those at iTunes, Spotify, YouTube, Bloomberg, 1160 00:56:19,120 --> 00:56:22,200 Speaker 2: wherever you find your favorite podcasts, And be sure and 1161 00:56:22,280 --> 00:56:26,480 Speaker 2: check out my new book How Not to Invest The ideas, 1162 00:56:26,600 --> 00:56:30,240 Speaker 2: numbers and behavior that destroy Wealth and How to Avoid 1163 00:56:30,280 --> 00:56:33,799 Speaker 2: Them at your favorite bookstore. I would be remiss if 1164 00:56:33,840 --> 00:56:35,600 Speaker 2: I do not think the correct team that helps put 1165 00:56:35,600 --> 00:56:40,960 Speaker 2: these conversations together each week. Alexis Noriega is my video producer. 1166 00:56:41,239 --> 00:56:45,560 Speaker 2: Sean Russo is my researcher. Anna Luke is my producer. 1167 00:56:46,040 --> 00:56:49,560 Speaker 2: I'm Barry Ridolts. You've been listening to Masters in Business 1168 00:56:50,120 --> 00:56:51,680 Speaker 2: on Bloomberg Radio.