1 00:00:06,280 --> 00:00:11,480 Speaker 1: Welcome to Trillions. I'm Joel Webber and I'm Eric bel Tunis. Eric. 2 00:00:11,880 --> 00:00:14,520 Speaker 1: One of our favorite guests so far has been Rachel Evans, 3 00:00:14,680 --> 00:00:17,960 Speaker 1: who's a reporter in Bloomberg News who covers et F 4 00:00:18,079 --> 00:00:20,520 Speaker 1: s and Rachel went on a little bit of a 5 00:00:20,520 --> 00:00:24,280 Speaker 1: field trip for us. We outsourced an episode we did. 6 00:00:24,520 --> 00:00:26,960 Speaker 1: This is an easy one, um and I like it 7 00:00:27,000 --> 00:00:29,440 Speaker 1: because a lot of our conversation so far have been 8 00:00:29,440 --> 00:00:33,160 Speaker 1: pretty broad or we've covered several tickers. This is really 9 00:00:33,240 --> 00:00:36,879 Speaker 1: drilling down into one particular ETF and it goes to 10 00:00:36,920 --> 00:00:39,280 Speaker 1: the story of how somebody launches an e t F. 11 00:00:39,400 --> 00:00:41,840 Speaker 1: So it's it's kind of a deep dive into two 12 00:00:41,880 --> 00:00:45,040 Speaker 1: things at once. And Rachel, which et F is this? 13 00:00:45,040 --> 00:00:49,160 Speaker 1: This is the MAGA fund MAGA That's that is a ticker, 14 00:00:49,640 --> 00:00:51,839 Speaker 1: right it is? And I know there's probably a lot 15 00:00:51,880 --> 00:00:54,760 Speaker 1: of people they're triggered right about now. But before you 16 00:00:54,800 --> 00:00:58,000 Speaker 1: tune out, this is the make America Great against slogan 17 00:00:58,120 --> 00:01:01,120 Speaker 1: and uh connected with Trump. But before you tune out, 18 00:01:01,200 --> 00:01:03,360 Speaker 1: this is an e t F I think a little 19 00:01:03,360 --> 00:01:07,240 Speaker 1: ahead of its time. It is basically what's called partisan investing, 20 00:01:07,880 --> 00:01:10,200 Speaker 1: and I know it might not be where we want 21 00:01:10,240 --> 00:01:12,200 Speaker 1: things to go, but it's kind of where things are going, 22 00:01:12,240 --> 00:01:14,199 Speaker 1: and it's sort of trying to divide the stock market 23 00:01:14,600 --> 00:01:16,399 Speaker 1: into left and right, and this one is on the 24 00:01:16,480 --> 00:01:18,440 Speaker 1: right side, and you sort of have E s G 25 00:01:18,640 --> 00:01:21,440 Speaker 1: is more on the left side. And Rachel, this was 26 00:01:21,520 --> 00:01:25,240 Speaker 1: really your idea. What was it about MAGA that resonated 27 00:01:25,280 --> 00:01:27,040 Speaker 1: with you? Why did you want to do this episode? 28 00:01:27,520 --> 00:01:29,679 Speaker 1: I think it's always interesting when someone comes onto the 29 00:01:29,680 --> 00:01:31,920 Speaker 1: E t F scene and it's doing something completely different. 30 00:01:32,480 --> 00:01:35,240 Speaker 1: We hadn't seen anything political in the way of E 31 00:01:35,319 --> 00:01:38,679 Speaker 1: t F s until this MAGA fund came out. It 32 00:01:38,760 --> 00:01:40,960 Speaker 1: was really the first to kind of actually propose a 33 00:01:41,000 --> 00:01:44,080 Speaker 1: strategy in which you buy companies that are donating to 34 00:01:44,280 --> 00:01:48,240 Speaker 1: Republican candidates. That struck me as a really interesting strategy 35 00:01:48,240 --> 00:01:50,200 Speaker 1: and I was kind of curious to see whether it 36 00:01:50,280 --> 00:01:53,840 Speaker 1: worked and exactly how that idea came about. I think 37 00:01:53,880 --> 00:01:55,560 Speaker 1: this is a great E t F to drill down too. 38 00:01:55,560 --> 00:01:58,440 Speaker 1: I actually the ticker to me was just Grand Slam 39 00:01:58,480 --> 00:02:00,840 Speaker 1: home run, and that doesn't matter with these type of 40 00:02:00,960 --> 00:02:03,800 Speaker 1: niche E t F s. I have to think this 41 00:02:03,840 --> 00:02:06,040 Speaker 1: guy might be located down south that where did you 42 00:02:06,080 --> 00:02:08,360 Speaker 1: have to go to interview him? You wouldn't be wrong. 43 00:02:08,440 --> 00:02:10,359 Speaker 1: So this involved me getting up at a very very 44 00:02:10,360 --> 00:02:13,200 Speaker 1: early hour to get a flight down to Dallas Fort Worth. 45 00:02:13,680 --> 00:02:16,320 Speaker 1: So how Lambert who has set up point Bridge Capital, 46 00:02:16,440 --> 00:02:19,160 Speaker 1: he runs the MAGA Fund to give it its full name, 47 00:02:19,160 --> 00:02:22,040 Speaker 1: it's actually the point Bridge gop stock Tracker e t F, 48 00:02:22,280 --> 00:02:25,200 Speaker 1: but MAGA is somewhat more catchy. So I met him 49 00:02:25,240 --> 00:02:28,359 Speaker 1: at his offices in downtown Fort Worth. It's a nice 50 00:02:28,360 --> 00:02:31,120 Speaker 1: little town. Actually, it's quite sort of historic. There's a 51 00:02:31,200 --> 00:02:33,840 Speaker 1: nice old center. You've got a kind of old courthouse 52 00:02:33,880 --> 00:02:36,760 Speaker 1: that's quite pretty, lots of kind of shops and restaurants around. 53 00:02:37,120 --> 00:02:39,280 Speaker 1: But I obviously chose the worst day to go down 54 00:02:39,360 --> 00:02:43,000 Speaker 1: to Texas. It was cold, it was wet, it was windy. 55 00:02:43,240 --> 00:02:45,520 Speaker 1: Wasn't exactly great timing on my part. And when did 56 00:02:45,520 --> 00:02:48,240 Speaker 1: he launch the e t F? So the fund started 57 00:02:48,320 --> 00:02:52,639 Speaker 1: in September UM of twenty seventeen, so we have now 58 00:02:52,720 --> 00:02:56,560 Speaker 1: had just over six months of performance to to evaluate um. 59 00:02:56,600 --> 00:02:58,320 Speaker 1: So it seemed like a good time to go down 60 00:02:58,400 --> 00:03:01,760 Speaker 1: and see how that fund started life and how it's 61 00:03:01,760 --> 00:03:07,360 Speaker 1: been doing since its launched. This weekend is the man 62 00:03:07,600 --> 00:03:14,600 Speaker 1: who made MEGA, so I'm here to see how Lambert 63 00:03:14,720 --> 00:03:24,040 Speaker 1: on thank you. How looks the consummate conservative professional think 64 00:03:24,200 --> 00:03:28,480 Speaker 1: open neck shirt, chinos and a plaid blazer and blonde 65 00:03:28,480 --> 00:03:31,239 Speaker 1: hair wants slightly long and swept back, a look not 66 00:03:31,320 --> 00:03:35,920 Speaker 1: dissimilar to President Trump's good to see you again again 67 00:03:36,520 --> 00:03:41,240 Speaker 1: for coming down, Thank you for having me appreciated Hope. 68 00:03:42,200 --> 00:03:45,280 Speaker 1: His office in downtown Fort Worth has a similar vibe. 69 00:03:45,600 --> 00:03:48,480 Speaker 1: It's all black, leather and chrome, with a picture of 70 00:03:48,520 --> 00:03:51,120 Speaker 1: his daughter set on the table next to an award 71 00:03:51,200 --> 00:03:53,400 Speaker 1: for best e t F ticker from this year's e 72 00:03:53,440 --> 00:03:56,720 Speaker 1: t F dot Com Awards. I started by asking him 73 00:03:56,720 --> 00:03:58,600 Speaker 1: to take me back to the beginning and tell me 74 00:03:58,640 --> 00:04:00,440 Speaker 1: how he had first come up with the idea for 75 00:04:00,520 --> 00:04:04,600 Speaker 1: political investing. I was sitting at my desk here in 76 00:04:04,640 --> 00:04:08,560 Speaker 1: the office that run. I was watching the news, and 77 00:04:09,360 --> 00:04:13,200 Speaker 1: that morning Target had come out and announced that they 78 00:04:13,200 --> 00:04:19,000 Speaker 1: were going to allow anyone of any gender to use 79 00:04:19,160 --> 00:04:23,599 Speaker 1: the dressing rooms and restrooms at their facilities. So how 80 00:04:23,600 --> 00:04:26,000 Speaker 1: are they identified for that day? They could they could 81 00:04:26,120 --> 00:04:27,839 Speaker 1: change in the dress rooms. And I saw this and 82 00:04:27,839 --> 00:04:30,279 Speaker 1: I was like, Ah, that's going to be very negative 83 00:04:30,320 --> 00:04:32,839 Speaker 1: for a Target stock. People were upset about it. I've 84 00:04:32,839 --> 00:04:35,400 Speaker 1: got two daughters, we shop at Target. I mean, they're 85 00:04:35,400 --> 00:04:37,760 Speaker 1: gonna go buy swimsuits at Target, They're gonna change in 86 00:04:37,760 --> 00:04:40,799 Speaker 1: the dressing room. It's kind of a weird scenario. This morning, 87 00:04:40,800 --> 00:04:43,640 Speaker 1: a petition against the retail giant Target is gaining a 88 00:04:43,640 --> 00:04:46,440 Speaker 1: lot of momentum. Nearly eight and fifty thou people have 89 00:04:46,520 --> 00:04:49,800 Speaker 1: already signed a boycott pledge by the American Family Association 90 00:04:50,160 --> 00:04:54,920 Speaker 1: over targets bathroom policy. People are boycotting Target, and they 91 00:04:54,920 --> 00:04:57,800 Speaker 1: don't realize they own it in their mutual funds. Once 92 00:04:57,839 --> 00:05:01,760 Speaker 1: President Trump won and I started seeing more of what 93 00:05:01,839 --> 00:05:05,800 Speaker 1: was going on politically as far as corporate America, you know, 94 00:05:05,920 --> 00:05:08,080 Speaker 1: kind of moved into that mode of how do I, 95 00:05:08,240 --> 00:05:13,479 Speaker 1: how do I capitalize for investors their ability to invest 96 00:05:13,560 --> 00:05:17,320 Speaker 1: in companies that have their political views. Once you come 97 00:05:17,400 --> 00:05:20,039 Speaker 1: up with this idea and exchange trade of funds seemed 98 00:05:20,040 --> 00:05:22,520 Speaker 1: like the natural solution that The reason I thought the 99 00:05:22,560 --> 00:05:25,800 Speaker 1: E t F approach was the best way for it 100 00:05:25,960 --> 00:05:28,920 Speaker 1: was because it's the most scalable in my mind. Clients 101 00:05:29,000 --> 00:05:31,080 Speaker 1: don't have to have an account at Point Bridge Capital. 102 00:05:31,640 --> 00:05:33,200 Speaker 1: They can have an account at Schwab, they can have 103 00:05:33,240 --> 00:05:35,200 Speaker 1: AG account TD maror Trade. They can have an account 104 00:05:35,200 --> 00:05:38,359 Speaker 1: at ubs basically or wherever they have a brokerage account, 105 00:05:38,360 --> 00:05:41,640 Speaker 1: they can purchase it. How's idea to turn his political 106 00:05:41,720 --> 00:05:45,760 Speaker 1: views into a fund wasn't new, per se. Values based 107 00:05:45,760 --> 00:05:47,960 Speaker 1: investing has been a rail for years for folks who 108 00:05:47,960 --> 00:05:52,360 Speaker 1: want to avoid energy producers, tobacco companies, or weapons manufacturers 109 00:05:52,360 --> 00:05:55,680 Speaker 1: for example. You might have heard these types of strategies 110 00:05:55,720 --> 00:05:59,960 Speaker 1: called e s G short for Environmental, social and governance 111 00:06:00,480 --> 00:06:03,760 Speaker 1: or socially responsible, and these types of products have become 112 00:06:03,800 --> 00:06:06,760 Speaker 1: all the rage in recent years. But How saw a 113 00:06:06,800 --> 00:06:09,000 Speaker 1: gap in the market for investors with a different set 114 00:06:09,000 --> 00:06:13,080 Speaker 1: of values, a conservative set of values. He wasn't coming 115 00:06:13,120 --> 00:06:16,120 Speaker 1: at this cold. How has been involved in Republican politics 116 00:06:16,160 --> 00:06:19,240 Speaker 1: more than a decade, most recently running a superpack for 117 00:06:19,279 --> 00:06:22,800 Speaker 1: Ted Cruise's tilt at the presidency in twenty sixteen, a 118 00:06:22,880 --> 00:06:26,880 Speaker 1: battle that President Trump and his margas slogan ultimately one. 119 00:06:28,080 --> 00:06:31,120 Speaker 1: There were the SG funds, and those e SG funds 120 00:06:31,120 --> 00:06:35,039 Speaker 1: are typically mostly left. There's nothing out there from the 121 00:06:35,160 --> 00:06:38,599 Speaker 1: from the conservative or Republican side. But through my work 122 00:06:38,640 --> 00:06:41,560 Speaker 1: in politics, I realized, you know what really matters is 123 00:06:41,600 --> 00:06:44,840 Speaker 1: the money in politics. So that's really what I are 124 00:06:44,880 --> 00:06:47,080 Speaker 1: to do, is see, well, where are they giving their money, 125 00:06:47,160 --> 00:06:51,039 Speaker 1: because that's really what's determining how people are getting elected 126 00:06:51,240 --> 00:06:54,440 Speaker 1: and whether people are getting elected, and so that's really 127 00:06:54,480 --> 00:06:56,320 Speaker 1: what sorry. I was like, I'll follow the money and 128 00:06:56,360 --> 00:06:59,479 Speaker 1: see what that leads to. Thus began a series of 129 00:06:59,480 --> 00:07:01,440 Speaker 1: phone call to find out what it would take to 130 00:07:01,520 --> 00:07:04,720 Speaker 1: realize his funds and how he would get approval from 131 00:07:04,720 --> 00:07:07,680 Speaker 1: the regulators for something known as exemptive relief. So I 132 00:07:07,720 --> 00:07:10,760 Speaker 1: just started calling people and saying, you know, and learning 133 00:07:11,280 --> 00:07:14,320 Speaker 1: how to do it. There are different types of incubators 134 00:07:14,360 --> 00:07:17,080 Speaker 1: out there that can that are kind of turn key 135 00:07:17,280 --> 00:07:20,560 Speaker 1: approaches to launching e t s. And I basically just 136 00:07:20,800 --> 00:07:26,520 Speaker 1: learned that market through conversations with people, and I realized 137 00:07:27,000 --> 00:07:29,040 Speaker 1: that really what I wanted to do was get my 138 00:07:29,080 --> 00:07:34,000 Speaker 1: own exemptive relief. And then basically I created a timeline. 139 00:07:34,040 --> 00:07:36,400 Speaker 1: I have a white board over here where I put 140 00:07:36,440 --> 00:07:38,760 Speaker 1: up on the white board. Okay, what do I need 141 00:07:38,800 --> 00:07:41,640 Speaker 1: to do first? I mean, if you want to walk, 142 00:07:41,640 --> 00:07:43,360 Speaker 1: we can walk over to the white board and show 143 00:07:43,360 --> 00:07:45,400 Speaker 1: you the white board. So this is the the white 144 00:07:45,400 --> 00:07:49,120 Speaker 1: boarder which he sketched out kind of the process to market, right, 145 00:07:49,240 --> 00:07:53,640 Speaker 1: and then I made I made decisions on kind of 146 00:07:54,320 --> 00:07:56,680 Speaker 1: you can see these are all you know, you've got 147 00:07:56,720 --> 00:07:59,800 Speaker 1: us bank, You've got cbo how lined up the custodian 148 00:08:00,160 --> 00:08:02,800 Speaker 1: spoke with market makers and authorized participants to make sure 149 00:08:02,840 --> 00:08:05,240 Speaker 1: that the fund would trade smoothly on in exchange and 150 00:08:05,320 --> 00:08:07,440 Speaker 1: that investors could put their cash in and get it 151 00:08:07,480 --> 00:08:11,239 Speaker 1: out again. But one crucial ingredient was still missing, something 152 00:08:11,280 --> 00:08:13,440 Speaker 1: we talk a lot about on this show. The ticker. 153 00:08:14,360 --> 00:08:18,520 Speaker 1: I decided I knew I wanted the ticker to be MAGA, 154 00:08:18,760 --> 00:08:23,840 Speaker 1: so I called up my contact at cbo E and said, hey, 155 00:08:24,040 --> 00:08:27,000 Speaker 1: you know I need to reserve this ticker. Well, they 156 00:08:27,040 --> 00:08:31,480 Speaker 1: tell me that ticker is already taken. So I was like, oh, 157 00:08:32,040 --> 00:08:33,959 Speaker 1: but I don't think they're going to use it, so 158 00:08:34,120 --> 00:08:36,480 Speaker 1: let me let me check with them. Sure enough they were. 159 00:08:36,559 --> 00:08:38,600 Speaker 1: They said yeah, we're not going to use this ticker. 160 00:08:39,240 --> 00:08:41,920 Speaker 1: And I figured they would probably say, hey, you know, 161 00:08:42,480 --> 00:08:44,400 Speaker 1: give us some money and you can have the ticker. 162 00:08:45,080 --> 00:08:47,320 Speaker 1: But they didn't do that, so it was pretty nice. 163 00:08:47,320 --> 00:08:49,000 Speaker 1: It was pretty quick. Actually, within a day or so 164 00:08:49,520 --> 00:08:52,320 Speaker 1: we exchanged emails. They're like, yeah, we're fine to release it. 165 00:08:52,440 --> 00:08:54,280 Speaker 1: They felt like the ticker might be a little too 166 00:08:54,520 --> 00:08:58,720 Speaker 1: a little too hot, but you didn't obviously, like when 167 00:08:58,720 --> 00:09:01,360 Speaker 1: did you first think that MARGA, that's the ticket for 168 00:09:01,400 --> 00:09:04,920 Speaker 1: me obviously after President Trump won the election. That's a 169 00:09:04,960 --> 00:09:08,760 Speaker 1: campaign slogan, and I just thought that that that ticker 170 00:09:09,040 --> 00:09:12,000 Speaker 1: would be an interesting way to let the public know 171 00:09:12,120 --> 00:09:14,960 Speaker 1: that this is a Republican e t F. Were you 172 00:09:15,000 --> 00:09:17,800 Speaker 1: trying to come up with other alternatives that were up fitted? 173 00:09:18,160 --> 00:09:21,920 Speaker 1: I was, And in fact another alternative was GOP and 174 00:09:22,000 --> 00:09:24,640 Speaker 1: that ticker was taken as well, and that ticker had 175 00:09:24,679 --> 00:09:27,400 Speaker 1: only been taken if I recall, maybe just a few 176 00:09:27,400 --> 00:09:30,840 Speaker 1: weeks before before I had called about it, so that 177 00:09:30,920 --> 00:09:32,960 Speaker 1: ticker was gone, and so I was like, wow, this 178 00:09:33,040 --> 00:09:35,880 Speaker 1: is um, this could be a problem because I know tickers. 179 00:09:35,920 --> 00:09:38,040 Speaker 1: Tickers are really important in the t F world. People 180 00:09:38,040 --> 00:09:39,960 Speaker 1: don't really care what the names are. It's all about 181 00:09:40,000 --> 00:09:42,319 Speaker 1: the ticker. So you know, I'll say, well, the names 182 00:09:42,320 --> 00:09:44,640 Speaker 1: that you know the point Bridge GP, stock Track or 183 00:09:44,679 --> 00:09:47,360 Speaker 1: e t F, but the tickers MAGA. So that's what 184 00:09:47,559 --> 00:09:49,680 Speaker 1: That's the way you need to think about it. All told, 185 00:09:49,800 --> 00:09:52,360 Speaker 1: it took about seven months from making his first calls 186 00:09:52,520 --> 00:09:56,559 Speaker 1: to starting the fund. Texas based point Bridge Capital was 187 00:09:56,679 --> 00:10:00,160 Speaker 1: launching its first e t F and it's investing in 188 00:10:00,360 --> 00:10:04,640 Speaker 1: GOP friendly company. Just understand that you go What about 189 00:10:04,640 --> 00:10:06,920 Speaker 1: a hundred and fifty companies, with all of which are 190 00:10:07,160 --> 00:10:17,640 Speaker 1: sympathetic to Republican causes is brilliant conversation. So how's the 191 00:10:17,679 --> 00:10:22,160 Speaker 1: fund doing well? It's report card, It's somewhat mixed. The 192 00:10:22,200 --> 00:10:25,920 Speaker 1: fund has thirty nine million dollars in assets. That's not nothing, 193 00:10:26,120 --> 00:10:29,360 Speaker 1: but it's somewhat below the million dollars the e t 194 00:10:29,520 --> 00:10:33,840 Speaker 1: f s typically need to break even. It ended seventeen 195 00:10:33,920 --> 00:10:36,720 Speaker 1: with strong returns, but those have lagged somewhat this year. 196 00:10:37,520 --> 00:10:40,080 Speaker 1: It's easy to see why when you look at Margot's holdings. 197 00:10:40,600 --> 00:10:44,920 Speaker 1: Remember these are all companies that donate to Republican candidates, 198 00:10:45,000 --> 00:10:48,080 Speaker 1: and drilling down, you can see that the portfolio is 199 00:10:48,160 --> 00:10:52,360 Speaker 1: heavily tilted towards oil and gas companies. This means that 200 00:10:52,400 --> 00:10:55,439 Speaker 1: the fund thrives when energy does well, but it also 201 00:10:55,520 --> 00:10:59,280 Speaker 1: suffers when the sector struggles. The opposite is true of technology, 202 00:10:59,480 --> 00:11:03,600 Speaker 1: in which the and is very underweight. But Margaret also 203 00:11:03,640 --> 00:11:07,880 Speaker 1: owns some companies that might give conservatives pause. Berkshire Hathaway 204 00:11:07,960 --> 00:11:11,240 Speaker 1: and Goldman Sachs, both one by CEOs that have expressed 205 00:11:11,280 --> 00:11:14,160 Speaker 1: socially liberal views in the past, are also in the mix. 206 00:11:14,920 --> 00:11:17,560 Speaker 1: I asked how how investors react when they learned that 207 00:11:17,600 --> 00:11:20,040 Speaker 1: these companies are part of the Market Fund. You know, 208 00:11:20,080 --> 00:11:21,920 Speaker 1: you can have a CEO that's a Democrat, you can 209 00:11:21,920 --> 00:11:24,360 Speaker 1: have a CEO that's that's a big liberal, and they 210 00:11:24,360 --> 00:11:28,400 Speaker 1: can spout off about things. Lloyd blanklynd talking about Donald 211 00:11:28,440 --> 00:11:31,880 Speaker 1: Trump's Twitter doesn't affect things as much as Goldman sacks 212 00:11:31,880 --> 00:11:36,000 Speaker 1: pack giving money to Republican candidates. So I'll take the 213 00:11:36,160 --> 00:11:39,600 Speaker 1: I'll take the dollars given all day long over an 214 00:11:39,600 --> 00:11:44,440 Speaker 1: interview where he criticizes somebody. So I think companies say 215 00:11:44,440 --> 00:11:48,240 Speaker 1: things publicly and then they do things differently than what 216 00:11:48,280 --> 00:11:52,320 Speaker 1: they're saying publicly. I found this argument particularly interesting. On 217 00:11:52,360 --> 00:11:54,760 Speaker 1: the one hand, it makes a lot of sense. Money 218 00:11:54,840 --> 00:11:57,920 Speaker 1: is something far more tangible than talk. But it also 219 00:11:57,960 --> 00:12:01,640 Speaker 1: seems to contradict one of Hall's pitches to possible buyers, namely, 220 00:12:01,720 --> 00:12:05,320 Speaker 1: the companies like Target, for example, damage their share price 221 00:12:05,360 --> 00:12:09,200 Speaker 1: when they express liberal political views. Using his methodology, the 222 00:12:09,240 --> 00:12:12,800 Speaker 1: fund still owns some of these companies. It also made 223 00:12:12,800 --> 00:12:15,720 Speaker 1: me wonder how much you can tell about companies ideology 224 00:12:15,760 --> 00:12:18,720 Speaker 1: from the dollars it donates. To dig into this further, 225 00:12:19,040 --> 00:12:21,880 Speaker 1: I turned to Michael you Seem, a professor of management 226 00:12:21,880 --> 00:12:25,680 Speaker 1: at the University of Pennsylvania's Wharton School, who researches leadership 227 00:12:25,679 --> 00:12:30,160 Speaker 1: and decision making. His business giving ideologically driven that as 228 00:12:30,200 --> 00:12:34,160 Speaker 1: you want to support parties that say advocate policies you 229 00:12:34,200 --> 00:12:38,760 Speaker 1: want yourself or is it access driven? You want access 230 00:12:38,840 --> 00:12:44,240 Speaker 1: to individuals who especially are in positions of chairs of 231 00:12:44,320 --> 00:12:50,400 Speaker 1: House and Senate committees and most top executive money it 232 00:12:50,559 --> 00:12:53,200 Speaker 1: was long gone to the Republican Party, no surprise there, 233 00:12:53,840 --> 00:12:56,679 Speaker 1: but there are periods where more than half of the 234 00:12:56,760 --> 00:13:01,400 Speaker 1: pack money over which they preside actually goos two Democrats. 235 00:13:02,640 --> 00:13:06,080 Speaker 1: There's also the cost. The fund charge is seventy two 236 00:13:06,080 --> 00:13:09,160 Speaker 1: basis points or seven dollars and twenty cents for every 237 00:13:09,160 --> 00:13:13,280 Speaker 1: one thousand dollars invested. That's significantly higher than the average 238 00:13:13,280 --> 00:13:15,120 Speaker 1: of forty nine basis points for e t f s 239 00:13:15,120 --> 00:13:18,640 Speaker 1: in the US. So why might an investor decide it's 240 00:13:18,640 --> 00:13:21,679 Speaker 1: the right product for them? To find out? I spoke 241 00:13:21,679 --> 00:13:25,760 Speaker 1: to another academic, Mayor Stateman, who specializes in behavioral finance 242 00:13:26,000 --> 00:13:30,839 Speaker 1: at Santa Clara University. In finance, we have a tendency 243 00:13:30,960 --> 00:13:36,480 Speaker 1: to separate the production of returns from their consumption. That is, 244 00:13:37,000 --> 00:13:42,280 Speaker 1: we say, first, make the most money. However, whatever it takes, 245 00:13:42,840 --> 00:13:46,480 Speaker 1: then use it to buy stuff to satisfy you or 246 00:13:46,480 --> 00:13:50,760 Speaker 1: to support the causes that you want. And and that 247 00:13:50,960 --> 00:13:54,839 Speaker 1: is silly, because finance just just made itself very narrow 248 00:13:54,920 --> 00:13:58,880 Speaker 1: and saying the goal must be getting the highest return, 249 00:13:59,360 --> 00:14:05,199 Speaker 1: because like the expressive and emotional benefits of being true 250 00:14:05,240 --> 00:14:08,240 Speaker 1: to their values, not just pretending to be true to 251 00:14:08,360 --> 00:14:12,000 Speaker 1: their values. I asked, how about this motivation, whether it 252 00:14:12,000 --> 00:14:14,040 Speaker 1: could be one of the reasons people buy his fund. 253 00:14:15,000 --> 00:14:18,000 Speaker 1: I'm not sure how much people are making investments bit 254 00:14:18,080 --> 00:14:21,320 Speaker 1: necessarily based on being part of a club, but I 255 00:14:21,320 --> 00:14:23,840 Speaker 1: mean i'd certainly be happy for that. And I think that, 256 00:14:24,200 --> 00:14:25,960 Speaker 1: you know, friends do tend to talk to each other 257 00:14:26,000 --> 00:14:28,000 Speaker 1: at cocktail parties, Hey what are you buying? What are 258 00:14:28,000 --> 00:14:31,120 Speaker 1: you looking at? From a you know, investment standpoint, So 259 00:14:31,160 --> 00:14:33,720 Speaker 1: hopefully we'll get to the point where that's a topic 260 00:14:33,760 --> 00:14:39,040 Speaker 1: that comes up. I'd certainly welcome it. Why do you 261 00:14:39,040 --> 00:14:42,160 Speaker 1: think people get more upset about politics these days, that 262 00:14:42,360 --> 00:14:45,920 Speaker 1: polarization is a positive thing or a negative thing. Well, 263 00:14:45,960 --> 00:14:48,680 Speaker 1: I don't think necessarily polarization is a good thing. I 264 00:14:48,680 --> 00:14:51,200 Speaker 1: think it's great for people have different views. I wish 265 00:14:51,240 --> 00:14:55,640 Speaker 1: people would then be able to still be friends and 266 00:14:55,640 --> 00:14:58,920 Speaker 1: and have the different views, right, So I guess I asked, 267 00:14:58,920 --> 00:15:01,160 Speaker 1: because I mean, is there a argument there that you know, 268 00:15:01,280 --> 00:15:04,360 Speaker 1: something like the Marga Fund is sort of capitalizing on 269 00:15:04,400 --> 00:15:07,280 Speaker 1: that polonization. I don't know that. I would say it's 270 00:15:07,320 --> 00:15:10,360 Speaker 1: capitalizing on it. I'd say it's giving it investors a 271 00:15:10,440 --> 00:15:14,480 Speaker 1: vehicle that they haven't had as a way to invest 272 00:15:14,600 --> 00:15:18,240 Speaker 1: based on things based on political views. So capitalizes and 273 00:15:18,320 --> 00:15:20,200 Speaker 1: necessarily the right word for it, I'd say it's more 274 00:15:20,280 --> 00:15:22,400 Speaker 1: trying to keep create an opportunity for people to do 275 00:15:22,440 --> 00:15:30,040 Speaker 1: something that they don't have. Did you know there are 276 00:15:30,040 --> 00:15:33,120 Speaker 1: a lot of company who heavily support liberal politicians like 277 00:15:33,200 --> 00:15:36,280 Speaker 1: Hillary by donating millions to Democrats. There's now a way 278 00:15:36,280 --> 00:15:39,520 Speaker 1: to invest without owning these stocks. How Lambert and his 279 00:15:39,680 --> 00:15:42,640 Speaker 1: company point Bridge Capital created the first. Now that his 280 00:15:42,720 --> 00:15:45,160 Speaker 1: fund is up and running, How's main focus is on 281 00:15:45,240 --> 00:15:47,880 Speaker 1: making investors aware of it in that he has a 282 00:15:47,880 --> 00:15:51,120 Speaker 1: different approach to many of the larger firms, taking spots 283 00:15:51,120 --> 00:15:53,600 Speaker 1: on conservative talk radio for example. And of course the 284 00:15:53,600 --> 00:15:56,240 Speaker 1: ticker is MAGA. MAGA m A g A Go to 285 00:15:56,280 --> 00:15:59,600 Speaker 1: invest politically dot com and learn about MAGA and lets 286 00:15:59,600 --> 00:16:02,600 Speaker 1: you own the top One thing I'm doing differently than 287 00:16:02,680 --> 00:16:05,840 Speaker 1: most E T F s is I'm not trying to 288 00:16:05,880 --> 00:16:08,680 Speaker 1: go out and have a bunch of wholesalers hit the 289 00:16:08,800 --> 00:16:12,040 Speaker 1: different brokers houses. I think mine, mine is going to 290 00:16:12,080 --> 00:16:14,600 Speaker 1: be driven more by investors calling up and saying I 291 00:16:14,600 --> 00:16:18,360 Speaker 1: want to buy this, versus necessarily their advisor calling them 292 00:16:18,400 --> 00:16:20,800 Speaker 1: and saying, hey, you should buy this. You know, I've 293 00:16:20,840 --> 00:16:23,000 Speaker 1: had someone say to me. I think they said to me, yeah, 294 00:16:23,040 --> 00:16:25,280 Speaker 1: you know, that's a that's a really interesting niche product. 295 00:16:25,400 --> 00:16:28,360 Speaker 1: I'm like, well, you know, it's really not niche. Since 296 00:16:28,400 --> 00:16:31,400 Speaker 1: sixty million people voted for Donald Trump, you know, so 297 00:16:31,680 --> 00:16:34,800 Speaker 1: there's a big market out there. Certainly found some high 298 00:16:34,840 --> 00:16:39,360 Speaker 1: profile support among House political colleagues since President Trump's intuguration. 299 00:16:39,560 --> 00:16:42,040 Speaker 1: I know Don JR. Now, so I didn't know him prior, 300 00:16:42,160 --> 00:16:45,480 Speaker 1: but we've become acquainted and I don't know, I guess 301 00:16:45,520 --> 00:16:47,200 Speaker 1: we could say we're friends. What does he think of 302 00:16:47,240 --> 00:16:50,400 Speaker 1: the margarite TF? Oh he likes it. Yeah, he told 303 00:16:50,400 --> 00:16:52,200 Speaker 1: me he likes it, like he loves the idea, and 304 00:16:52,760 --> 00:16:55,240 Speaker 1: I think he's a fan. How about your whole boss 305 00:16:55,320 --> 00:16:58,480 Speaker 1: head craze. He likes it, he likes the idea. I 306 00:16:58,520 --> 00:17:00,400 Speaker 1: don't know if he's bought it. I'm you know, I'm 307 00:17:00,400 --> 00:17:03,200 Speaker 1: gonna have to call up, you know, his wife. His 308 00:17:03,280 --> 00:17:05,960 Speaker 1: wife's in the investment field. So I think I need 309 00:17:06,000 --> 00:17:08,040 Speaker 1: to talk to Heidi and say, hey, you need to 310 00:17:08,320 --> 00:17:10,399 Speaker 1: look into this a little more. Have you put your 311 00:17:10,400 --> 00:17:12,320 Speaker 1: money into it? Oh? Yes, you know all of my 312 00:17:12,359 --> 00:17:15,919 Speaker 1: liquid retirement is in it. My mother's in it, my 313 00:17:15,960 --> 00:17:19,679 Speaker 1: wife's in it. There was just one final thing I 314 00:17:19,720 --> 00:17:22,600 Speaker 1: needed to know before leaving, how and for worth? Do 315 00:17:22,680 --> 00:17:26,800 Speaker 1: you have the hat? I have a I'll tell you 316 00:17:26,840 --> 00:17:28,720 Speaker 1: what I have. I have a maggot e t F hat. 317 00:17:28,760 --> 00:17:30,720 Speaker 1: I'll show it to you before we leave. But I 318 00:17:30,760 --> 00:17:32,520 Speaker 1: do have a red hat that I that I've made 319 00:17:32,560 --> 00:17:35,080 Speaker 1: up that says magat et f on it. It's kind 320 00:17:35,080 --> 00:17:37,760 Speaker 1: of your own, that's my own. It's my own brand 321 00:17:37,800 --> 00:17:40,720 Speaker 1: of the of the hat. Yes, not the Trump happened, 322 00:17:40,720 --> 00:17:43,520 Speaker 1: not the actual Trump hat. But in fair I'm not 323 00:17:43,560 --> 00:17:45,520 Speaker 1: a big slogan guy. I don't have a I don't 324 00:17:45,560 --> 00:17:48,320 Speaker 1: have a Ted Cruise had either. I don't have I 325 00:17:48,359 --> 00:17:50,560 Speaker 1: didn't do a lot of the slogan stuff. Now you're 326 00:17:50,560 --> 00:17:52,720 Speaker 1: in the business, I know now I need to I 327 00:17:52,760 --> 00:17:59,560 Speaker 1: know I've had to revamp my thoughts on that Rachel, 328 00:17:59,720 --> 00:18:02,080 Speaker 1: what do you think the biggest takeaways for you were? 329 00:18:02,400 --> 00:18:04,840 Speaker 1: The biggest takeaway from me was really just that this 330 00:18:04,880 --> 00:18:08,320 Speaker 1: isn't a very interesting idea that that kind of, you know, 331 00:18:08,400 --> 00:18:10,720 Speaker 1: the fact that you can try and invest in a 332 00:18:10,800 --> 00:18:13,520 Speaker 1: way that aligns with your political values I thought was 333 00:18:13,560 --> 00:18:16,399 Speaker 1: a really novel concept. I'm not sure whether it's something 334 00:18:16,440 --> 00:18:20,359 Speaker 1: that um I necessarily think is a great development for 335 00:18:20,440 --> 00:18:22,840 Speaker 1: the world per se in that I think, you know, 336 00:18:22,880 --> 00:18:25,680 Speaker 1: when you look at where things are politically these days, 337 00:18:25,720 --> 00:18:28,920 Speaker 1: you know, we have so much polarization between right and left, 338 00:18:28,920 --> 00:18:30,760 Speaker 1: and whether the right and left talk to each other 339 00:18:30,880 --> 00:18:34,040 Speaker 1: enough anymore, I think is an area for debate. I 340 00:18:34,080 --> 00:18:36,720 Speaker 1: do wonder whether you know, when you get into investing 341 00:18:36,760 --> 00:18:40,240 Speaker 1: politically as well as kind of donating politically or going 342 00:18:40,280 --> 00:18:43,280 Speaker 1: to rallies, whether that kind of takes that polarization one 343 00:18:43,320 --> 00:18:46,360 Speaker 1: step further. But I think the idea about investing according 344 00:18:46,400 --> 00:18:49,920 Speaker 1: to your political values as well as you know, maybe 345 00:18:49,960 --> 00:18:53,040 Speaker 1: your morals or or know whether you think that energy 346 00:18:53,080 --> 00:18:55,080 Speaker 1: stocks are going up, or whether the government's going to 347 00:18:55,160 --> 00:18:56,959 Speaker 1: build roads in your your town, I think that's an 348 00:18:56,960 --> 00:18:59,520 Speaker 1: interesting idea. I mean, the part that interests me a 349 00:18:59,600 --> 00:19:01,840 Speaker 1: little bit. It's just that if if you want to 350 00:19:01,920 --> 00:19:04,200 Speaker 1: build it, you can build it. And if it works, 351 00:19:04,240 --> 00:19:05,800 Speaker 1: it works, and if it doesn't, it doesn't. And like 352 00:19:05,800 --> 00:19:07,560 Speaker 1: if somebody wants to invest in that, they can invest 353 00:19:07,600 --> 00:19:09,480 Speaker 1: in that. But here's this guy who had an idea, 354 00:19:09,520 --> 00:19:11,160 Speaker 1: anyone out and did it right. I mean, that's when 355 00:19:11,160 --> 00:19:12,800 Speaker 1: you can look at the e t F marketplace. It's 356 00:19:12,800 --> 00:19:15,919 Speaker 1: a democracy. It's not something that necessarily you have to 357 00:19:16,000 --> 00:19:17,879 Speaker 1: kind of be coming from a black rock or a 358 00:19:17,960 --> 00:19:20,639 Speaker 1: vanguard to get success. If you have an idea and 359 00:19:20,720 --> 00:19:22,760 Speaker 1: you go through the right kind of process, you can 360 00:19:22,760 --> 00:19:24,600 Speaker 1: see your fund realized and then it's up to the 361 00:19:24,640 --> 00:19:27,639 Speaker 1: marketplace whether it succeeds. I'm a little more bullish on 362 00:19:27,640 --> 00:19:30,280 Speaker 1: the ETF then I think most people for two reasons. One, 363 00:19:30,880 --> 00:19:34,480 Speaker 1: if this thing starts to become something that Sean Hannity 364 00:19:34,640 --> 00:19:37,040 Speaker 1: or the conservative crowd starts talking about, you know, every 365 00:19:37,040 --> 00:19:38,840 Speaker 1: time somebody on the left says something bad, they want 366 00:19:38,840 --> 00:19:41,359 Speaker 1: to boycott the other side. This is a way to 367 00:19:41,440 --> 00:19:43,560 Speaker 1: act with your dollars. And if it starts making its 368 00:19:43,560 --> 00:19:47,160 Speaker 1: way in conservative circles, that's half the country as an audience. 369 00:19:47,440 --> 00:19:50,840 Speaker 1: The second thing is this is heavy energy and industrials 370 00:19:50,840 --> 00:19:54,120 Speaker 1: and has no tech. If the fang stocks crumble, they've 371 00:19:54,119 --> 00:19:56,920 Speaker 1: had a few like hits, but they're back if they crumble. 372 00:19:57,359 --> 00:20:00,400 Speaker 1: This thing has a lot of stocks that are more 373 00:20:00,440 --> 00:20:03,119 Speaker 1: on the value side, and if it starts to outperform 374 00:20:03,200 --> 00:20:05,879 Speaker 1: and ripped past the SMP five hundred, it could it 375 00:20:05,920 --> 00:20:09,320 Speaker 1: could get assets just because it's outperforming. So it's got 376 00:20:09,400 --> 00:20:12,440 Speaker 1: a couple of things that could garner assets that are 377 00:20:12,520 --> 00:20:15,000 Speaker 1: legitimate in my opinion. Yeah, that's one thing that that 378 00:20:15,080 --> 00:20:17,120 Speaker 1: how mentioned to me is that when he ran kind 379 00:20:17,119 --> 00:20:18,919 Speaker 1: of back tests on on this fund and kind of 380 00:20:18,920 --> 00:20:21,440 Speaker 1: how it performed in the past, I can pleasantly surprised 381 00:20:21,440 --> 00:20:23,359 Speaker 1: to find that it didn't really correlate with the SMP 382 00:20:23,440 --> 00:20:25,800 Speaker 1: five hundred, which when obviously you're using the SMP five 383 00:20:25,840 --> 00:20:29,159 Speaker 1: hundred as your base universe, you'd expect that potentially to 384 00:20:29,160 --> 00:20:31,280 Speaker 1: be more overlapped there. But it seemed that, you know, 385 00:20:31,320 --> 00:20:34,320 Speaker 1: there is either outperformance or under performance. It's not really 386 00:20:34,359 --> 00:20:36,920 Speaker 1: just tracking the SMP. At the beginning we talked about 387 00:20:36,920 --> 00:20:38,560 Speaker 1: how E s G sort of on the left side 388 00:20:38,600 --> 00:20:40,240 Speaker 1: of the map and MAGA might be on the right. 389 00:20:40,680 --> 00:20:42,600 Speaker 1: It really shows in the numbers. If you look, there's 390 00:20:42,640 --> 00:20:45,600 Speaker 1: only eight percent overlap between the two big E S 391 00:20:45,640 --> 00:20:48,040 Speaker 1: G t F S and MAGA. That is not a 392 00:20:48,040 --> 00:20:51,159 Speaker 1: lot considering they're both large caps. I personally think of E. 393 00:20:51,359 --> 00:20:54,000 Speaker 1: S G went and sort of called itself liberal values. 394 00:20:54,080 --> 00:20:56,119 Speaker 1: I think it might get off the ground faster and 395 00:20:56,200 --> 00:20:59,800 Speaker 1: just recognize that's its audience anyway. But anyway, this is 396 00:21:00,000 --> 00:21:02,080 Speaker 1: ascinating to see if the stock market continues to get 397 00:21:02,119 --> 00:21:06,119 Speaker 1: divided via politics. Pretty crazy also that somebody had the 398 00:21:06,200 --> 00:21:09,760 Speaker 1: ticker and relinquished it. You don't know who actually had 399 00:21:09,800 --> 00:21:13,040 Speaker 1: the ticker. Wasn't the guy who There's another issuer who 400 00:21:13,040 --> 00:21:15,800 Speaker 1: has GOP and dem how to tell me, and he 401 00:21:15,800 --> 00:21:18,639 Speaker 1: wouldn't name names, But I mean, it's it's interesting that 402 00:21:18,680 --> 00:21:21,320 Speaker 1: you pick on that because for my understanding of it, 403 00:21:21,359 --> 00:21:23,640 Speaker 1: you know, when you have a t f issuers out 404 00:21:23,640 --> 00:21:26,520 Speaker 1: there that are pondering different ideas and come up with, 405 00:21:26,560 --> 00:21:28,880 Speaker 1: you know, a three or four even five less kind 406 00:21:28,880 --> 00:21:32,120 Speaker 1: of word that seems like it might encapsulated investment thesis, 407 00:21:32,320 --> 00:21:34,200 Speaker 1: you can go out and you can reserve that ticker 408 00:21:34,240 --> 00:21:36,400 Speaker 1: with the exchanges for a certain period of time. Yeah, 409 00:21:36,760 --> 00:21:39,360 Speaker 1: just seems like the land grab somebody has just got 410 00:21:39,359 --> 00:21:41,439 Speaker 1: to be land grabbing this like dot com era you 411 00:21:41,560 --> 00:21:44,640 Speaker 1: are else? Yeah, I remember back where Bill Gross first 412 00:21:44,720 --> 00:21:46,639 Speaker 1: came out. His e t F was t r x 413 00:21:46,680 --> 00:21:49,679 Speaker 1: T or something really bad, and eight months later he 414 00:21:49,720 --> 00:21:52,040 Speaker 1: got bonded, which was smart. Maga. I'm a little shocked, 415 00:21:52,320 --> 00:21:55,479 Speaker 1: just because partisan investing is very new. I we were 416 00:21:55,520 --> 00:21:58,240 Speaker 1: just talking before we started, how I remember two years 417 00:21:58,280 --> 00:22:00,600 Speaker 1: ago this kind of thing just would have entered my 418 00:22:00,640 --> 00:22:03,040 Speaker 1: head in covering ets as an option. Even right now, 419 00:22:03,320 --> 00:22:05,480 Speaker 1: nobody was doing this. We're talking about this kind of thing. 420 00:22:05,840 --> 00:22:07,920 Speaker 1: I think it really wasn't until this past selection where 421 00:22:07,920 --> 00:22:10,640 Speaker 1: it's become more obvious. In a way. I think it's 422 00:22:10,640 --> 00:22:12,680 Speaker 1: a good point. I mean, I think society generally has 423 00:22:12,720 --> 00:22:15,719 Speaker 1: become more political. If you look at the news stories 424 00:22:15,760 --> 00:22:17,600 Speaker 1: that you know, we as reporters are covering on a 425 00:22:17,680 --> 00:22:20,480 Speaker 1: daily basis, so much of the stock market moves are 426 00:22:20,560 --> 00:22:23,840 Speaker 1: driven by politics these days. You know, you can't really 427 00:22:23,840 --> 00:22:27,840 Speaker 1: write a story without incorporating something that President Trump or 428 00:22:27,840 --> 00:22:31,120 Speaker 1: the Cabinet or Congress has said or done, because it's 429 00:22:31,160 --> 00:22:34,960 Speaker 1: impacting how the markets move on a much greater level, 430 00:22:34,960 --> 00:22:37,399 Speaker 1: I think, in this administration than than some of the 431 00:22:37,400 --> 00:22:40,320 Speaker 1: ones immediately previous. So when it comes to politics being 432 00:22:40,359 --> 00:22:44,080 Speaker 1: part of our daily lives, it's more and more present, Rachel, 433 00:22:44,320 --> 00:22:46,760 Speaker 1: thank you so much. Just love the fact that you're 434 00:22:46,920 --> 00:22:49,280 Speaker 1: with us in and doing cool stuff like this. Thanks 435 00:22:49,359 --> 00:22:57,320 Speaker 1: joining us only, Thanks happening. Thanks for listening to Trillions. 436 00:22:57,800 --> 00:23:00,280 Speaker 1: Until next time. You can find us on the Bloomberg term, rnol, 437 00:23:00,520 --> 00:23:04,080 Speaker 1: Bloomberg dot com, Apple Podcasts, and whoever else you want 438 00:23:04,080 --> 00:23:06,679 Speaker 1: to listen to us. We'd love to hear from you. 439 00:23:07,040 --> 00:23:11,680 Speaker 1: We're on Twitter. She's at Rachel Evans Underscore Inn Why 440 00:23:12,160 --> 00:23:18,600 Speaker 1: I'm at Joel Weber Show. He's at Eric Falcunas. Trillions 441 00:23:18,640 --> 00:23:22,359 Speaker 1: is produced by Magnus Hendrickson. Francesco Leady is the head 442 00:23:22,480 --> 00:23:25,920 Speaker 1: of Bloomberg Podcasts. Bye.