WEBVTT - VettaFi’s Todd Rosenbluth on Active ETFs in 2026 0:00:13.680 --> 0:00:16.959 Welcome to Inside Active, a podcast about active managers that 0:00:17.040 --> 0:00:20.040 goes beyond sound bites and headlines and looks deeper into 0:00:20.079 --> 0:00:25.000 their processes, challenges and philosophies and security selection. I'm David Cohne, 0:00:25.040 --> 0:00:27.800 I lead Mutual fund and active Research at Bloomberg Intelligence. 0:00:28.160 --> 0:00:32.199 Today my coast is Athonosios. Sara Fagus, ETF, analyst at 0:00:32.200 --> 0:00:35.479 Bloomberg Intelligence. Ethan thank you for being my coast today. 0:00:35.800 --> 0:00:37.760 Hey, yeah, thanks for having me. Happy New Year. If 0:00:37.800 --> 0:00:40.040 we're still allowed to say that, I don't know, I 0:00:40.040 --> 0:00:40.519 don't know, we. 0:00:40.520 --> 0:00:40.880 Have to stop. 0:00:43.040 --> 0:00:45.680 I think we're okay. So since it's the start of 0:00:45.720 --> 0:00:48.199 the new year, I thought we could discuss active ETFs, 0:00:48.360 --> 0:00:51.560 so let's bring our guests on. Todd Rosenbooth is head 0:00:51.560 --> 0:00:54.920 of research at tmx Vetify and is obviously someone who 0:00:55.000 --> 0:00:58.080 is no stranger to ETFs. Todd, thank you for joining 0:00:58.160 --> 0:00:58.600 us today. 0:00:58.920 --> 0:01:00.800 It's a pleasure to be here, and yeah, I'll stay. 0:01:00.800 --> 0:01:02.040 Happy New Year to you both of you. 0:01:03.840 --> 0:01:06.080 So, over the past few years, we've seen active ETFs 0:01:06.120 --> 0:01:10.280 go from emerging to mainstream. From your advantage point, where 0:01:10.319 --> 0:01:11.959 are we in the life cycle right now? 0:01:13.000 --> 0:01:15.880 I think it's still very early days. I believe year 0:01:16.000 --> 0:01:20.200 end data shows that active ETFs are roughly eleven twelve 0:01:20.200 --> 0:01:24.160 percent of total ETF assets. Now that's significantly higher than 0:01:24.200 --> 0:01:27.520 it was three five years ago. But I still think 0:01:27.560 --> 0:01:30.160 there's a lot of room for growth. I think there's 0:01:30.200 --> 0:01:32.760 going to be growth. We'll talk about more as these 0:01:33.160 --> 0:01:36.400 larger asset managers have brought their best and their brightest 0:01:36.880 --> 0:01:41.360 into the ETF marketplace. As we've seen active ETFs evolve 0:01:41.520 --> 0:01:46.160 into and she demand more for the security selection, the 0:01:46.240 --> 0:01:52.440 discretionary approach to building portfolios from a stock or bond standpoint. 0:01:52.560 --> 0:01:54.520 So I still think this is early days. I think 0:01:54.560 --> 0:01:57.640 we're going to be in the next five years we'll 0:01:57.640 --> 0:02:02.120 see that percentage increase into the higher teens and then 0:02:02.160 --> 0:02:04.080 perhaps more stabilize over time. 0:02:04.440 --> 0:02:07.160 Well what surprised you most about active ETFs last year? 0:02:07.440 --> 0:02:10.119 Well, I'm just really excited about the success we saw 0:02:10.240 --> 0:02:13.840 from the firms that I think about with active ETFs. 0:02:13.840 --> 0:02:17.040 So we saw Capital Group cross one hundred billion dollars 0:02:17.680 --> 0:02:20.079 in active ETFs. In fact, that's the only type of 0:02:20.160 --> 0:02:23.280 ETFs that they offer, and they entered the marketplace just 0:02:23.400 --> 0:02:26.400 over three years ago at the time you know, or 0:02:26.520 --> 0:02:29.280 roughly at the time that they crossed one hundred billion dollars. 0:02:29.360 --> 0:02:32.799 They're coming up on their four year anniversary. Firms like 0:02:32.880 --> 0:02:37.079 Tier Price saw its asset base nearly double in overall 0:02:38.240 --> 0:02:42.720 from a flow standpoint because the firm got greater commitment 0:02:42.760 --> 0:02:47.000 and greater focus on active ETFs. And there's a whole 0:02:47.000 --> 0:02:48.960 bunch of other firms. So the fact that we saw 0:02:49.400 --> 0:02:52.440 what I and perhaps many other people think of as 0:02:52.520 --> 0:02:56.840 active ETFs as stock and bond picking seed demand, that 0:02:56.919 --> 0:02:57.880 really excited me. 0:02:58.960 --> 0:03:02.360 Okay, you know, active management is really my specialty, and 0:03:02.400 --> 0:03:04.280 so I really have to ask, do you think the 0:03:04.280 --> 0:03:07.840 flows last year were driven more by market conditions or 0:03:07.919 --> 0:03:10.800 is it kind of, you know, a renewed confidence in 0:03:10.840 --> 0:03:11.639 active management. 0:03:12.320 --> 0:03:17.400 So I think the flows were close to five hundred 0:03:17.840 --> 0:03:21.600 billion dollars that went into active ETFs. I think the 0:03:21.760 --> 0:03:25.680 matters how we classify something into an active ETF and 0:03:25.720 --> 0:03:27.440 what is and what isn't. So that's why I'm using 0:03:27.480 --> 0:03:30.079 close to because I've seen data sources that where it's 0:03:30.080 --> 0:03:34.200 above that number and below that number. I think this 0:03:34.440 --> 0:03:39.040 is people having greater confidence in active ETFs. And so 0:03:39.120 --> 0:03:42.920 I think of this as more of a strategic opportunity 0:03:42.920 --> 0:03:46.600 as opposed to tactical moves. The market wasn't that volatile 0:03:46.840 --> 0:03:50.080 which would make you want to turn to active management. 0:03:50.720 --> 0:03:53.760 In general. It went up, and people when the market 0:03:53.800 --> 0:03:56.400 goes up, and it's okay to invest in an index 0:03:56.480 --> 0:03:59.880 based approach. If you're choosing active, then you're choosing it 0:04:00.200 --> 0:04:02.400 for confidence. But I guess I'll hedge my own bet 0:04:02.400 --> 0:04:05.040 a little bit. The fact that we saw growing demand 0:04:05.120 --> 0:04:09.320 and even stronger demand for active fixed income ETFs. We 0:04:09.360 --> 0:04:12.000 did have a more challenging fixed income environment. We saw 0:04:12.000 --> 0:04:17.320 the FED renew its cutting of interest rates in the 0:04:17.520 --> 0:04:20.599 fourth quarter of twenty twenty five, and people are going 0:04:20.680 --> 0:04:23.880 to turn to active managers when they're unsure about what's 0:04:23.880 --> 0:04:26.000 going to happen in the bond market. We've got the 0:04:26.040 --> 0:04:30.160 Trump administration talking about replacing the FED share and it's 0:04:30.200 --> 0:04:31.880 not clear that it's going to be. If you don't 0:04:31.920 --> 0:04:33.880 know what's the next move from the FED is going 0:04:33.920 --> 0:04:36.480 to be in twenty twenty six, are heading into twenty 0:04:36.520 --> 0:04:41.159 twenty six working with a Rick Reader of black Rock, 0:04:41.480 --> 0:04:45.880 working with the team at Double Line that are experts 0:04:45.920 --> 0:04:48.440 within the active fixed income space, I think makes a 0:04:48.480 --> 0:04:50.760 lot of sense. So I guess I'll hedge my bet 0:04:50.800 --> 0:04:53.839 in terms of where it was more tactical perhaps from 0:04:53.880 --> 0:04:56.320 a fixed income standpoint, but what I'm seeing in the 0:04:56.320 --> 0:04:59.400 equity space gives me confidence that this is more strategic. 0:05:00.240 --> 0:05:03.720 No, that makes sense, and you know our et error 0:05:03.720 --> 0:05:06.360 I should say active ETFs. Are we still in land 0:05:06.400 --> 0:05:10.120 grab mode or we kind of starting to enter consolidation phase. 0:05:10.640 --> 0:05:13.440 So I think a lot of what we're seeing is 0:05:13.480 --> 0:05:16.880 that people are moving. So people have been moving from 0:05:17.040 --> 0:05:22.119 active mutual funds into index based ETFs. That's a trend 0:05:22.120 --> 0:05:24.520 that's been going on for years. I think some of 0:05:24.520 --> 0:05:27.360 what's happening is people are moving from active mutual funds 0:05:28.000 --> 0:05:31.120 into active ETFs, and this from the same firms, And 0:05:31.360 --> 0:05:34.360 it's not necessarily a clear, uh one for one. I 0:05:34.400 --> 0:05:36.839 think I've seen your research out there that shows that 0:05:36.920 --> 0:05:39.600 a firm that offers both active ETFs and active mutual 0:05:39.640 --> 0:05:43.080 funds that they're bleeding assets on the mutual fund side 0:05:43.120 --> 0:05:45.479 and they're growing assets. If that's the right way of 0:05:45.600 --> 0:05:49.599 using that analogy on the ETF space, I don't know 0:05:49.600 --> 0:05:52.640 that it's a clear one for one that's happening. But 0:05:52.760 --> 0:05:56.360 so that's why I think this is still an area 0:05:56.400 --> 0:06:00.120 of growth. What I do wonder about and if we 0:06:00.200 --> 0:06:03.040 might be more moving into it. To me, what is more. 0:06:03.240 --> 0:06:07.160 I talked about traditional active and discretionary active or discretionary 0:06:07.200 --> 0:06:10.960 fixed income. The active ETF universe, and you guys know 0:06:11.080 --> 0:06:14.960 it quite well includes things that are not just stock 0:06:15.000 --> 0:06:18.880 and bond oriented. They're options based, and the active management 0:06:19.040 --> 0:06:22.360 is more on the options world. And so whether that's 0:06:22.400 --> 0:06:26.279 single stock related to ETFs, I can't believe we'd have 0:06:26.279 --> 0:06:30.360 to say single stock ETFs with a straight face or 0:06:30.400 --> 0:06:34.000 defined outcome oriented ETFs. I think that we're going to 0:06:34.080 --> 0:06:37.640 see more. There's so much competition in that space, and 0:06:37.720 --> 0:06:41.599 it's less about the brand perhaps, or I don't know 0:06:41.640 --> 0:06:43.599 that the brand has the same value the way that 0:06:43.640 --> 0:06:47.400 it does. People are familiar with Tier Price or Capital 0:06:47.440 --> 0:06:50.200 Group or Black Rock or others as active managers, and 0:06:50.200 --> 0:06:52.039 they have confident in it. I don't know that that's 0:06:52.040 --> 0:06:55.960 the same thing in a single stock leveraged ETF or 0:06:56.000 --> 0:06:58.920 even perhaps defined outcome ETF. So I do think we're 0:06:58.960 --> 0:07:02.000 going to see some market share gains and losses happening 0:07:02.040 --> 0:07:04.560 in that space. I think we might have seen it 0:07:04.760 --> 0:07:07.080 a little bit this past year, but I think it's 0:07:07.120 --> 0:07:10.360 going to certainly a car as we move the next 0:07:10.440 --> 0:07:12.240 year forward. But what do you think. Do you think 0:07:12.240 --> 0:07:13.320 we're still early days? 0:07:15.040 --> 0:07:18.160 Yeah, I think, you know, there's still a lot of 0:07:18.200 --> 0:07:20.800 managers on the mutual fund side that haven't moved over 0:07:20.840 --> 0:07:23.280 to the ETF side, and so I think it's just 0:07:23.280 --> 0:07:25.800 gonna be interesting to kind of see what's gonna happen, 0:07:26.400 --> 0:07:27.960 you know now with the share class. And I know 0:07:28.000 --> 0:07:31.520 we'll discuss that a little bit later, but it's something 0:07:31.520 --> 0:07:33.360 to watch. And I actually do have a follow up, 0:07:34.120 --> 0:07:36.360 you know, when you mentioned some of the traditional stock 0:07:36.400 --> 0:07:39.480 picking or security selection, do you think brand is really 0:07:39.480 --> 0:07:41.920 going to play a big role and where the money goes? 0:07:43.520 --> 0:07:46.440 So, I think brand carries way to get somebody in 0:07:46.560 --> 0:07:51.800 the door, and then performance is going to keep them inside. 0:07:51.920 --> 0:07:56.520 And so if some of the firms that have offered 0:07:56.920 --> 0:08:00.480 ETFs that had a strong mutual fund legacy have kept 0:08:00.560 --> 0:08:03.400 not only their firm brand name, but the names of 0:08:03.440 --> 0:08:06.960 the products are same, and those are they're either clone 0:08:07.000 --> 0:08:11.080 products or they really feel by name or in reality, 0:08:12.280 --> 0:08:14.280 and so I think that's going to carry a lot 0:08:14.320 --> 0:08:16.320 of weight. And they already have a track record that 0:08:16.360 --> 0:08:18.920 you can perhaps point to either of the firm or 0:08:18.960 --> 0:08:21.840 the manager some of the some of the other products, 0:08:21.880 --> 0:08:27.200 again from a discretionary standpoint is we offer active strategies. 0:08:27.240 --> 0:08:30.560 We're now going to offer you an active ETF version 0:08:31.560 --> 0:08:33.680 of something, but we haven't really brought that to market 0:08:33.760 --> 0:08:35.480 in the mutual world. It may have existed in a 0:08:35.559 --> 0:08:40.079 separately managed account space. Then I think it's going to 0:08:40.160 --> 0:08:42.120 help be the brand that gets in the door. And 0:08:42.160 --> 0:08:44.240 then it's gonna it's going to be whether or not 0:08:44.600 --> 0:08:47.600 you can you can deliver on it. And so I'm thinking, 0:08:47.640 --> 0:08:51.400 for example, Reckiner is a is a firm that offers 0:08:51.920 --> 0:08:57.360 colo ETFs. They are they are newer to the ETF space. 0:08:57.440 --> 0:09:01.840 They've got a history and institutional history of of focusing 0:09:01.840 --> 0:09:04.000 on that space. It's gonna they're gonna have to prove 0:09:04.240 --> 0:09:07.239 and I think they can based on on their heritage, 0:09:07.280 --> 0:09:09.079 that they can prove that they can add value with 0:09:09.200 --> 0:09:12.760 active management. But that's a little bit different than uh, 0:09:13.000 --> 0:09:14.839 you know, I keep going back to the same ones. 0:09:14.840 --> 0:09:18.840 So I'll try somebody different. Fidelity that has brought there 0:09:19.360 --> 0:09:22.800 some of the same name products, you know, the Fidelity 0:09:23.320 --> 0:09:28.560 Bond Mutual Funder, Total Bond Mutual Fund. It's already established 0:09:28.600 --> 0:09:31.880 itself as a strong player, you know eight you know, 0:09:31.960 --> 0:09:33.600 eight close to ten year track record. 0:09:35.600 --> 0:09:38.000 Yeah, I'll jump in because I thought you brought up 0:09:38.040 --> 0:09:40.520 something interesting about how we're defining active. So I think 0:09:40.520 --> 0:09:42.600 it's just important, Like this whole time active should being 0:09:42.679 --> 0:09:45.360 quotes right because you said you have single stock, you 0:09:45.400 --> 0:09:47.920 have the stock picking. But I mean, I'll throw out 0:09:47.960 --> 0:09:50.960 some stats about eighty five percent of all the launches 0:09:51.000 --> 0:09:53.880 this year we're active at some component. We now have 0:09:53.960 --> 0:09:59.360 more active ETFs than passive. Like on this concept of 0:09:59.400 --> 0:10:01.520 like over routed and this like tod do you think 0:10:01.520 --> 0:10:04.520 that like a we are we overcrowded now already or 0:10:04.559 --> 0:10:06.160 do you think there's still a lot of room and 0:10:06.160 --> 0:10:08.560 then how do you actually start to stand out, like 0:10:08.640 --> 0:10:11.360 as there is more products, what actually determines which ones 0:10:11.360 --> 0:10:14.760 maybe actually are still around five ten years from now. 0:10:17.120 --> 0:10:19.360 So I think we're overcrowded, and we're going to get 0:10:19.360 --> 0:10:24.120 even more overcrowded in terms of the single stock and 0:10:24.200 --> 0:10:29.000 defined outcome areas the options based strategy. And I say 0:10:29.040 --> 0:10:32.119 overcrowded in that there's it's a small pool of assets 0:10:33.000 --> 0:10:37.319 right now, so we have to the universe of potential 0:10:37.360 --> 0:10:41.480 investors has to expand. People who are are more trading 0:10:41.520 --> 0:10:44.880 oriented and that are using leverage and doing this on 0:10:44.920 --> 0:10:48.000 their own to do. Single stocks have to make it 0:10:48.040 --> 0:10:50.080 into the ETF world the way that we saw, you know, 0:10:50.160 --> 0:10:54.960 bitcoin investors make it into the ETF world. Options strategies 0:10:54.960 --> 0:10:57.600 have existed for years. I think we've seen a number 0:10:57.640 --> 0:10:59.360 of them. We're going to see more of them as 0:10:59.360 --> 0:11:03.520 we as the industry gets more creative. I would shout 0:11:03.520 --> 0:11:07.880 out Calamos for example. I know you guys, and you 0:11:08.320 --> 0:11:10.880 and your Collie Eric Boucho's has talked about the auto 0:11:10.920 --> 0:11:16.480 callable space and Calamos was early there. That's innovation and 0:11:16.520 --> 0:11:19.040 that's been successful. I think it's gathered over five hundred 0:11:19.040 --> 0:11:23.160 million dollars in assets. I don't think well, I think 0:11:23.160 --> 0:11:25.800 we're too crowded in terms of a number of products. 0:11:25.880 --> 0:11:27.360 But I think we're too I think there's too many 0:11:27.440 --> 0:11:32.120 mutual funds also, except the difference is those active equity 0:11:32.200 --> 0:11:35.880 mutual funds are bleeding assets and the active equity ETFs 0:11:35.920 --> 0:11:40.199 collectively are growing assets. So I think we're going to 0:11:40.240 --> 0:11:43.080 see firms that have dipped their toe into the ETF 0:11:43.160 --> 0:11:46.520 marketplace and have had some success and seen the broader 0:11:46.559 --> 0:11:50.280 industry success continue to expand. And yeah, at the risk 0:11:50.360 --> 0:11:53.839 of front running the question, when we get share classes 0:11:53.960 --> 0:11:57.600 of existing products. I think then we'll start to really 0:11:57.640 --> 0:12:00.320 feel much more crowded than we do today. Let me 0:12:00.320 --> 0:12:03.120 ask you, because I heard you, Athan on a on 0:12:03.480 --> 0:12:08.439 a different Bloomberg podcast talk about, you know, something might 0:12:08.480 --> 0:12:11.920 blow up because it's a single stock leverage at some point. 0:12:12.400 --> 0:12:14.840 Yeah, we were to your point about like the single 0:12:14.880 --> 0:12:19.320 stock crowdedness. Right, So at first there was like all 0:12:19.360 --> 0:12:22.160 these several issues were launching the same testa product, so 0:12:22.160 --> 0:12:24.480 they wanted to differentiate, So they were going after these 0:12:24.520 --> 0:12:28.400 like small cap might quantum stocks, and there is some 0:12:28.440 --> 0:12:30.480 stocks that have a market cap of like one hundred 0:12:30.640 --> 0:12:33.800 million in a two x levered ETF, and we tested 0:12:33.800 --> 0:12:36.360 this that. Yeah, I don't want to see anything blow up, 0:12:36.400 --> 0:12:40.280 but obviously we pushed the envelope into what products, what 0:12:40.360 --> 0:12:43.080 stocks are being put into these leverage products. So I 0:12:43.080 --> 0:12:45.760 don't think it's a non zero possibility that one of 0:12:45.840 --> 0:12:50.559 these ETFs could liquidate in a single day, right, just 0:12:50.559 --> 0:12:54.280 because of the moves in some of these stocks. But right, 0:12:54.320 --> 0:12:57.079 that's a different active, right that that you're talking about, 0:12:57.080 --> 0:13:00.959 that the single stock stuff. But yeah, I think that's 0:13:00.960 --> 0:13:02.560 a good answer, Like, yeah, maybe there are a lot 0:13:02.559 --> 0:13:04.480 of ETFs, but there's a lot of mutual funds too, 0:13:04.520 --> 0:13:07.000 so I don't know what. To your point, more stuff's 0:13:07.040 --> 0:13:10.000 going to keep coming, so it may be standing out. 0:13:10.000 --> 0:13:11.000 It's just going to be harder. 0:13:11.400 --> 0:13:12.880 So I want to come back to you on one 0:13:13.000 --> 0:13:16.559 stat and apologies, I'm going to source somebody else's data. 0:13:16.600 --> 0:13:19.800 It's not even mine, it's morning Stars data. But dare 0:13:19.840 --> 0:13:23.640 you and feel free to then edit this part out 0:13:23.679 --> 0:13:26.520 as appropriate. I'm sure your data would match this as well. 0:13:27.360 --> 0:13:30.599 But Ben Johnson posted this I saw on LinkedIn that 0:13:30.760 --> 0:13:34.040 single stock ETF, so at least the way that the 0:13:34.040 --> 0:13:36.440 morning Star is classifying it is two and a half 0:13:36.480 --> 0:13:41.240 percent of the assets of active ETFs and fourteen percent 0:13:41.360 --> 0:13:44.520 of the number of products. So to your point, Ethan, 0:13:44.760 --> 0:13:48.320 there's a lot of products that are out there. I 0:13:48.320 --> 0:13:50.640 think we're going to and I think we've seen closures 0:13:50.679 --> 0:13:53.680 already happen. I think we're likely to see more closures 0:13:53.679 --> 0:13:56.679 in that space. Whereas where the discrete, let me bring 0:13:56.720 --> 0:14:00.000 it back to the majority of it more the discretionary 0:14:00.240 --> 0:14:03.560 side of it. I think a firm like Baron Capital 0:14:03.640 --> 0:14:07.440 that just launched their first CTFs, I feel like they're 0:14:07.480 --> 0:14:09.120 in it for the longer haul that I think they're 0:14:09.120 --> 0:14:12.520 going to be committed to the space and hopefully the 0:14:12.520 --> 0:14:15.160 products are going to be successful also, but I think 0:14:15.160 --> 0:14:17.680 it's less likely that they're going to close those products, 0:14:17.720 --> 0:14:20.960 even if they're under one hundred million dollars in the 0:14:21.600 --> 0:14:23.400 in the in the in this or under a five 0:14:23.440 --> 0:14:25.320 hundred million dollars or whatever number. We want to use 0:14:25.720 --> 0:14:28.880 UH as a as a point of time for success. 0:14:29.480 --> 0:14:36.600 Whereas the traders who else the t Rex products, I 0:14:36.640 --> 0:14:38.320 think we're going to see many more of those come 0:14:38.360 --> 0:14:38.520 and go. 0:14:40.360 --> 0:14:42.640 So, actually, something I wanted to talk about, which I 0:14:42.640 --> 0:14:45.560 think flows naturally from this is trends. And so I 0:14:45.600 --> 0:14:48.560 know you mentioned innovation and the auto callabowls, and are 0:14:48.600 --> 0:14:50.960 there any active trends you think are overhyped as we 0:14:51.000 --> 0:14:51.600 head into this. 0:14:51.600 --> 0:14:57.480 Year I've moved into So there's ETFs that I don't 0:14:57.520 --> 0:14:59.520 think we should have, and I'm not going to name them. 0:14:59.560 --> 0:15:02.440 There's just enough eat gift and it isn't necessarily up 0:15:02.480 --> 0:15:04.280 to me, UH to be able to do. I guess 0:15:04.280 --> 0:15:07.080 I'm happy that I'm talking to the two Bloomberg Research 0:15:07.120 --> 0:15:11.160 colleagues that I know of that are not crypto advocates. UH. 0:15:11.600 --> 0:15:17.280 I hope Eric or Zealous I hope Eric listens to this. Yes, uh, 0:15:17.520 --> 0:15:20.000 happy to have it. But so I think we're going 0:15:20.080 --> 0:15:21.600 to see many I don't think you guys, and I 0:15:21.640 --> 0:15:25.320 don't think that's considered active in this space. But there's 0:15:25.360 --> 0:15:28.720 there's ETFs that exists that are tied to strategies that 0:15:28.760 --> 0:15:32.040 I didn't necessarily see of value. And I'm not just 0:15:32.120 --> 0:15:35.160 naming crypto related once. I'm not. I think the market's 0:15:35.160 --> 0:15:39.080 going to determine that. So, for example, I was pleasantly 0:15:39.200 --> 0:15:43.040 surprised at how popular Colo ETFs. I know, I just 0:15:43.120 --> 0:15:45.760 referenced one of the firms that's there, but the Janis 0:15:45.840 --> 0:15:50.600 Henderson Sweeter products have been tremendously successful when they came out. 0:15:50.840 --> 0:15:55.680 I don't think I was as optimistic about how successful 0:15:55.720 --> 0:15:58.120 they would be, and I was proven wrong. I think, 0:15:58.240 --> 0:16:01.560 you know, if I think ETFs are a great access 0:16:01.680 --> 0:16:05.920 vehicle and you can get the benefits of active, whether 0:16:06.000 --> 0:16:08.160 it's active in the security selection or active in the 0:16:08.160 --> 0:16:12.720 implementation or options or what have you, I'll let the 0:16:12.720 --> 0:16:16.160 market decide and then we've got a pine on those 0:16:16.640 --> 0:16:19.360 from a success or a lack of success standpoint. So 0:16:20.760 --> 0:16:23.120 I feel like that's a dodge of a question or 0:16:23.160 --> 0:16:27.520 dodging of the question. But listen, we've got how many 0:16:28.280 --> 0:16:33.080 four thousand children in this CTF space, ethan just I know, David, 0:16:33.080 --> 0:16:37.080 you've got many more mutual funds there. I treat them 0:16:37.080 --> 0:16:39.840 all equally until I don't have to know about them anymore. 0:16:40.680 --> 0:16:44.720 You love all the children, well, some of them I 0:16:44.760 --> 0:16:48.920 remember their names, some of them I don't. And you 0:16:49.280 --> 0:16:52.280 come across these things. The market's going to determine whether 0:16:52.360 --> 0:16:54.920 or not. And we've seen products that came out of 0:16:56.520 --> 0:16:59.680 under the or it came from under the radar and emerged, 0:16:59.840 --> 0:17:01.800 and so it would have been logical to say those 0:17:01.800 --> 0:17:05.479 products weren't going to survive and didn't have a case uh, 0:17:05.720 --> 0:17:08.760 and then the market had success. But I think that 0:17:08.800 --> 0:17:10.960 and maybe you're we're gonna get to an apologies. I 0:17:11.000 --> 0:17:13.520 know you shared an outline audience. I got an outline 0:17:13.600 --> 0:17:15.159 on this, but I don't have it in front of me. 0:17:16.440 --> 0:17:19.400 I think distribution is going to be key for whether 0:17:19.520 --> 0:17:23.359 or not a product is successful. Maybe I'll pause there, 0:17:23.400 --> 0:17:25.040 Maybe maybe we don't want to go down that path. 0:17:26.359 --> 0:17:29.000 No, I want to talk about the four thousand plus 0:17:29.119 --> 0:17:32.639 and maybe another four thousand coming. But obviously a big 0:17:33.040 --> 0:17:35.760 story for look for twenty twenty six and be the 0:17:35.800 --> 0:17:40.080 share class, right what or a conversion. So let's just 0:17:40.119 --> 0:17:43.600 say any of those routes, what kind of like impact 0:17:43.680 --> 0:17:47.879 do you think the share class ruling or or firms 0:17:47.880 --> 0:17:51.480 looking for conversions is going to have on just the 0:17:51.560 --> 0:17:54.520 industry or just active in general. Like that part of it, 0:17:55.119 --> 0:17:57.760 just like how much more competitive can it get? What 0:17:57.840 --> 0:18:00.680 maybe types of strategies do you think are gonna come 0:18:00.840 --> 0:18:03.760 through or be listed as share classes from some of 0:18:03.760 --> 0:18:04.800 these asset managers. 0:18:05.920 --> 0:18:09.880 So I'm really I'm really intrigued to see how this 0:18:09.960 --> 0:18:13.520 is going to play out. Getting approval and then coming 0:18:13.560 --> 0:18:17.400 to market are not the same things as you both 0:18:17.440 --> 0:18:22.360 would would appreciate, and so I want to see what, 0:18:22.480 --> 0:18:26.280 not only what products the asset managers come to market with, 0:18:27.400 --> 0:18:30.080 because to come to market means to convert, to take 0:18:30.520 --> 0:18:34.320 a non transparent product and make it transparent, and so 0:18:36.560 --> 0:18:40.520 the industry has moved primarily towards offering ETFs that are 0:18:40.600 --> 0:18:43.800 fully transparent from an active standpoint. There's some success stories, 0:18:43.840 --> 0:18:45.720 and I don't want to debate that here, but there's 0:18:45.720 --> 0:18:48.760 some success stories some Fidelity and Teriro price that are 0:18:48.760 --> 0:18:52.000 in smaller number of products but but have have had 0:18:52.119 --> 0:18:55.080 had success. When you got to you gotta be willing 0:18:55.119 --> 0:18:56.520 to share your full book. 0:18:56.960 --> 0:18:57.320 Uh. 0:18:57.359 --> 0:19:00.720 So that's going to be strategies that one makes sense 0:19:00.800 --> 0:19:04.000 to be able to do that, primarily large cap us 0:19:04.119 --> 0:19:08.320 equity strategies. That's going to be ones that have capacity 0:19:08.760 --> 0:19:11.320 to be able to not have to worry about closing. Again, 0:19:11.560 --> 0:19:14.240 good real world problem to be able to have, and 0:19:14.520 --> 0:19:17.760 where the management team is fine showing their hands. So 0:19:17.800 --> 0:19:21.080 it's a relatively low turnover. I'll go with relatively low 0:19:21.119 --> 0:19:25.919 turnover strategy at least out of the gate. So I 0:19:25.960 --> 0:19:28.920 think we're going to see products in twenty twenty six. 0:19:29.440 --> 0:19:31.720 I think both of you all see at the Exchange 0:19:31.760 --> 0:19:34.239 conference in March of twenty twenty six. Will I know 0:19:34.280 --> 0:19:37.199 we'll I have confidence that will have products that'll be 0:19:37.280 --> 0:19:41.200 out from Dimensional Funds and FM and maybe a couple 0:19:41.240 --> 0:19:45.520 other firms that have been very eager to come to market. 0:19:45.880 --> 0:19:48.600 But I'm still a little skeptical as to how fast 0:19:48.640 --> 0:19:51.760 we'll see. Some of the other firms that have a 0:19:51.800 --> 0:19:58.320 well established lineup of strategies, are they ready to bring 0:19:58.359 --> 0:20:01.840 their usual fund client base into the ETF marketplace or 0:20:01.840 --> 0:20:05.919 even smaller firms I reference Baron Capital, they and tweety 0:20:05.960 --> 0:20:09.040 Brown or a couple of the firms that I saw 0:20:09.240 --> 0:20:13.119 that have gotten the next step of approval. Those are 0:20:13.200 --> 0:20:20.080 mutual fund franchises with mutual fund more oriented shareholder bases. 0:20:20.840 --> 0:20:23.919 Are they ready to bring those people into the ETF world? 0:20:25.359 --> 0:20:27.639 I think they should be, but are they set up 0:20:27.680 --> 0:20:29.280 to be able to do that? And I don't know 0:20:29.320 --> 0:20:31.080 how fast that happens? Do you guys, well, I mean, 0:20:31.119 --> 0:20:32.840 let me get your take. I realized this is not 0:20:33.040 --> 0:20:36.680 my job to ask you the question. But my gut 0:20:36.720 --> 0:20:39.760 is that we're going to see in the in the hundreds, 0:20:40.920 --> 0:20:45.000 low hundreds, maybe hundred, one hundred plus or so tops 0:20:45.560 --> 0:20:48.399 products that come to market in twenty twenty six is 0:20:48.440 --> 0:20:50.840 I don't know. I'm not putting a hard number on that. 0:20:50.880 --> 0:20:53.320 Do you guys have a number in mind of active 0:20:53.400 --> 0:20:56.359 share classes that come to market in the next year. 0:20:58.280 --> 0:21:00.440 I don't think it's going to be high. I think 0:21:00.560 --> 0:21:02.119 it's going to be slow going. I think there'd be 0:21:02.160 --> 0:21:03.560 a lot of wait and see from some of these 0:21:03.640 --> 0:21:06.119 firms just to see what happens. And one of the 0:21:06.200 --> 0:21:08.200 things I, you know, last year, one of the things 0:21:08.240 --> 0:21:10.160 I was waiting on just from the mutual fund side 0:21:10.240 --> 0:21:13.639 is holding holding reporting was supposed to go monthly for 0:21:13.840 --> 0:21:15.479 big funds, like it was a go over a billion, 0:21:15.960 --> 0:21:18.200 but that got pushed, got pushed another couple of years, 0:21:18.240 --> 0:21:20.679 and it just seems like the industry there's a lot 0:21:20.760 --> 0:21:22.800 of firms that do not want to show their holdings, 0:21:22.800 --> 0:21:24.600 and so if they don't want to show their holdings monthly, 0:21:24.800 --> 0:21:27.200 with like another lag, you know, why would they want 0:21:27.200 --> 0:21:29.919 to show their holdings daily. And so I think there's 0:21:29.960 --> 0:21:32.520 still a lot of apprehension for a lot of firms, 0:21:32.560 --> 0:21:34.840 and so I think it'll be slow going in twenty 0:21:34.920 --> 0:21:37.239 twenty six. I don't know what's going to happen after that. 0:21:37.320 --> 0:21:40.919 I think it could pick up after that. Yeah, what 0:21:40.960 --> 0:21:41.240 about you? 0:21:41.720 --> 0:21:44.560 Yeah, I think I agree, And maybe I'm just too cynical. 0:21:44.600 --> 0:21:46.399 But I also think the stuff they're going to roll 0:21:46.440 --> 0:21:48.879 out might not necessarily be their best stuff at first. 0:21:48.880 --> 0:21:51.719 Like if you have a really good fund that's has 0:21:51.800 --> 0:21:54.600 good star ratings, could performance, maybe that's not the one 0:21:54.640 --> 0:21:56.600 you start with. You sort of start with these other 0:21:56.640 --> 0:22:02.399