1 00:00:06,240 --> 00:00:12,480 Speaker 1: Welcome to trillions. I'm Joel Webber and I'm Eric Dallieres. Eric. 2 00:00:12,560 --> 00:00:16,759 Speaker 1: I grew up watching PBS, right, and there's a show 3 00:00:16,760 --> 00:00:22,080 Speaker 1: on PBS, really famous group. Yes, I love that show. 4 00:00:22,360 --> 00:00:24,159 Speaker 1: SNL did a lot of good send ups of it, 5 00:00:24,200 --> 00:00:28,200 Speaker 1: and like day as as John McLaughlin. And what what 6 00:00:28,320 --> 00:00:31,640 Speaker 1: made it funny is John McLaughlin had like no patience 7 00:00:32,320 --> 00:00:34,320 Speaker 1: and and it was at a time where people were 8 00:00:34,360 --> 00:00:37,080 Speaker 1: kind of you know, used to TV and give it 9 00:00:37,080 --> 00:00:39,040 Speaker 1: getting a d D. And so it was a show 10 00:00:39,040 --> 00:00:42,880 Speaker 1: of pundits and political uh talk talking about the news 11 00:00:42,880 --> 00:00:45,760 Speaker 1: of the day. Yeah, and he really would hardly let 12 00:00:45,760 --> 00:00:49,199 Speaker 1: anybody finish. He would just go around quickly and he 13 00:00:49,440 --> 00:00:52,280 Speaker 1: was like sort of a yeah. He was like no, 14 00:00:52,360 --> 00:00:54,720 Speaker 1: no, no no, no, And and it was fun to watch. 15 00:00:54,760 --> 00:00:57,360 Speaker 1: It was a spectacle and it was for our A 16 00:00:57,440 --> 00:00:59,960 Speaker 1: d D minds. This is you know, young gen x 17 00:01:00,080 --> 00:01:02,000 Speaker 1: or I really liked it. I felt I got a 18 00:01:02,040 --> 00:01:03,880 Speaker 1: lot out of it. It was slightly entertaining, and you 19 00:01:03,880 --> 00:01:08,160 Speaker 1: don't see that token Republicans. Everybody's thrown in together, right, 20 00:01:08,720 --> 00:01:11,280 Speaker 1: So we're gonna do our own version of it. We 21 00:01:11,319 --> 00:01:13,839 Speaker 1: are We're joined by a few e t F nerds 22 00:01:13,959 --> 00:01:16,720 Speaker 1: and we're gonna talk about the E t F topics 23 00:01:16,720 --> 00:01:20,000 Speaker 1: of the day. Yeah, and yes they're nerds, but they're pundits. 24 00:01:20,080 --> 00:01:22,840 Speaker 1: So when the McLaughlin group had these political pundits on, 25 00:01:23,280 --> 00:01:26,920 Speaker 1: these are the E t F equivalent of those pundits. 26 00:01:26,920 --> 00:01:28,600 Speaker 1: They're just E t F pundits. In fact, when I 27 00:01:28,640 --> 00:01:32,080 Speaker 1: do conferences, I'll frequently be on a panel called the pundits, 28 00:01:32,120 --> 00:01:34,520 Speaker 1: and it's with these people. These are also the people 29 00:01:34,560 --> 00:01:38,280 Speaker 1: that you know me from being on that competition. We're 30 00:01:38,319 --> 00:01:41,320 Speaker 1: always coming third or fourth place, which disappoints you, and 31 00:01:41,360 --> 00:01:44,360 Speaker 1: I'm sorry, but it's these are the pundits that I 32 00:01:44,360 --> 00:01:46,680 Speaker 1: see in the circuit and who are usually the ones 33 00:01:46,720 --> 00:01:49,880 Speaker 1: you see quoted, and they're really lively and become friends 34 00:01:49,880 --> 00:01:51,880 Speaker 1: with them, and it should because we're gonna talk about 35 00:01:51,920 --> 00:01:54,640 Speaker 1: new regulations and we won't let them blather on and on. 36 00:01:54,640 --> 00:01:56,960 Speaker 1: I'm gonna I'm gonna sort of you're gonna McLaughlin a 37 00:01:57,000 --> 00:01:58,800 Speaker 1: little bit here. Yeah, we're gonna keep this quick and 38 00:01:58,880 --> 00:02:00,800 Speaker 1: rapid fire and get this. I'm gonna see if from 39 00:02:00,880 --> 00:02:10,799 Speaker 1: get through twenty questions. This week on Trilliance Nerds, we're 40 00:02:10,840 --> 00:02:13,359 Speaker 1: gonna launch right into introductions. Let's start off Dave, Dave 41 00:02:13,400 --> 00:02:16,480 Speaker 1: not Egg, Managing director et F dot Com, Tom tom Lyden, 42 00:02:16,639 --> 00:02:19,680 Speaker 1: editor of ETF Trends, Todd Todd Rosenblute, Director of et 43 00:02:19,840 --> 00:02:22,480 Speaker 1: F and Mutual Fund Research at CFR A alright, question 44 00:02:22,560 --> 00:02:25,000 Speaker 1: number one, Todd, is too much attention paid to the 45 00:02:25,040 --> 00:02:27,800 Speaker 1: expense ratio? Most definitely, so we've seen a race to 46 00:02:27,840 --> 00:02:30,320 Speaker 1: the bottom. But there are products that compete with one 47 00:02:30,320 --> 00:02:32,840 Speaker 1: another where the exposure is quite different from one another. 48 00:02:32,880 --> 00:02:35,280 Speaker 1: You have V W O and I E MG hundred 49 00:02:35,280 --> 00:02:38,720 Speaker 1: basis point difference this year and performance the exact same fee. 50 00:02:38,760 --> 00:02:40,960 Speaker 1: We've got dividend products that are the same thing. If 51 00:02:41,000 --> 00:02:43,520 Speaker 1: you're buying market cap weighted products, it may not matter 52 00:02:43,720 --> 00:02:45,680 Speaker 1: if you're doing anything else. You really got to look 53 00:02:45,720 --> 00:02:48,960 Speaker 1: under the hood. Dave, it always matters because uh, fees 54 00:02:49,040 --> 00:02:51,160 Speaker 1: are important. But I think what Todd was trying to 55 00:02:51,160 --> 00:02:54,040 Speaker 1: say but stumbled over his own tongue is exposure matters 56 00:02:54,120 --> 00:02:56,760 Speaker 1: way more than fees, and that's the number one thing 57 00:02:56,800 --> 00:03:01,440 Speaker 1: that determines your performance. But Tom, isn't there a backlash 58 00:03:01,480 --> 00:03:03,400 Speaker 1: against paying too much in the past? Then? Is it 59 00:03:03,560 --> 00:03:07,000 Speaker 1: understandable that people want their investments for absolute dirt. Cheap 60 00:03:07,280 --> 00:03:10,640 Speaker 1: price is important? But major market indicators. If you're paying 61 00:03:10,639 --> 00:03:14,880 Speaker 1: four basis points, great, But as we see thematic factor 62 00:03:15,040 --> 00:03:17,200 Speaker 1: multi factor, you're gonna pay up a little bit more 63 00:03:17,240 --> 00:03:20,680 Speaker 1: for it. Compare that to mutual fund expense ratios. It's crazy. 64 00:03:20,919 --> 00:03:25,880 Speaker 1: Tom's like the smooth jazz station. He is the top 65 00:03:25,919 --> 00:03:27,800 Speaker 1: of his head. Yeah, he is the smoothest of us. 66 00:03:27,800 --> 00:03:30,320 Speaker 1: All all right, um, and my two cents, I think 67 00:03:30,320 --> 00:03:33,240 Speaker 1: plain vanilla, you know, expense ratio should rule. I think 68 00:03:33,240 --> 00:03:35,280 Speaker 1: when you get to more exotic areas, you should pay 69 00:03:35,320 --> 00:03:37,400 Speaker 1: a little bit. People do need to make a living here. Okay. 70 00:03:37,600 --> 00:03:40,840 Speaker 1: Number two, how will a bear market affect et s? Dave? Uh, 71 00:03:40,880 --> 00:03:42,560 Speaker 1: it's going to be great for e t f s 72 00:03:42,600 --> 00:03:45,640 Speaker 1: because it's gonna flush out a lot of overpriced, underperforming, 73 00:03:45,720 --> 00:03:48,720 Speaker 1: low active share active managers. All that money comes into 74 00:03:48,720 --> 00:03:50,720 Speaker 1: the et F industry. We've seen it over and over again. 75 00:03:50,760 --> 00:03:52,320 Speaker 1: We see it when we have a one month downturn. 76 00:03:52,400 --> 00:03:55,240 Speaker 1: We see it we have a one year downturn. Tom, Well, 77 00:03:55,720 --> 00:03:57,600 Speaker 1: we haven't talked about this before, but a lot of 78 00:03:57,640 --> 00:04:02,320 Speaker 1: money is going to go into mutual funds, money market funds, UH, 79 00:04:02,520 --> 00:04:07,000 Speaker 1: short term fixed income. The industry is gonna be hurt. Todd, Yeah, 80 00:04:07,040 --> 00:04:09,240 Speaker 1: I think people don't want to pay much when they're 81 00:04:09,280 --> 00:04:11,160 Speaker 1: losing money, so that the less that they can pay 82 00:04:11,400 --> 00:04:14,440 Speaker 1: through through E t F s h through both fixed 83 00:04:14,480 --> 00:04:17,520 Speaker 1: income and equity products, I think is gonna garner more interest. 84 00:04:17,760 --> 00:04:20,960 Speaker 1: I agree. Um, Look, the bull market has actually been 85 00:04:20,960 --> 00:04:23,320 Speaker 1: way better for active than most people think. Assets have 86 00:04:23,360 --> 00:04:25,960 Speaker 1: increased in active funds by seven trillion. That's more than 87 00:04:26,000 --> 00:04:27,920 Speaker 1: all of passive a bear market we've had, not only 88 00:04:27,960 --> 00:04:30,920 Speaker 1: for flows, but just for their sort of asset growth. 89 00:04:31,279 --> 00:04:35,000 Speaker 1: How responsible for the epic bull market that we've been in, 90 00:04:35,120 --> 00:04:38,200 Speaker 1: which also happens to be an insanely boring bull market? 91 00:04:38,640 --> 00:04:41,440 Speaker 1: How responsible for that are E t F s not? 92 00:04:41,960 --> 00:04:43,719 Speaker 1: I would say E t f s are a symptom 93 00:04:43,760 --> 00:04:46,080 Speaker 1: of that, not a cause. Yeah, it's just the rapper. 94 00:04:46,200 --> 00:04:48,919 Speaker 1: So if the stocks inside are going up, then the 95 00:04:48,920 --> 00:04:51,359 Speaker 1: E t F is gonna go up. But there's so 96 00:04:51,480 --> 00:04:54,280 Speaker 1: much more money that's in active management, either in the 97 00:04:54,360 --> 00:04:58,279 Speaker 1: mutual fund wrapper or individual stocks then or separate accounts 98 00:04:58,640 --> 00:05:00,719 Speaker 1: than it is the t F. The TF is riding 99 00:05:00,760 --> 00:05:02,520 Speaker 1: in the back stew to the car, not driving. Yeah, 100 00:05:02,520 --> 00:05:04,360 Speaker 1: that's it. They've just been along for the ride. Yeah, 101 00:05:04,360 --> 00:05:06,520 Speaker 1: I mean, look, one direction has a lot of sales. 102 00:05:06,520 --> 00:05:10,080 Speaker 1: It's not really an MP three thing. Okay, number slap 103 00:05:10,080 --> 00:05:12,560 Speaker 1: across the face, Okay, yeah you got you kind of 104 00:05:12,560 --> 00:05:15,719 Speaker 1: got taken down there. Um, welcome to the club. Alright, 105 00:05:15,920 --> 00:05:18,360 Speaker 1: Number three, which E T F provider is most likely 106 00:05:18,400 --> 00:05:21,840 Speaker 1: to crack the top five? That isn't there? Now? Tom, 107 00:05:21,920 --> 00:05:24,440 Speaker 1: I'm gonna say, Wisdom Tree. If you look at Wisdom 108 00:05:24,480 --> 00:05:27,719 Speaker 1: Tree and there, did I take your? You take mine? Yeah? Well, 109 00:05:28,160 --> 00:05:31,160 Speaker 1: the whole ideas they were built on the currency strategy, 110 00:05:31,160 --> 00:05:33,560 Speaker 1: and when the dollar is strong, it's really really tough 111 00:05:33,600 --> 00:05:36,280 Speaker 1: for them. But when you look at the way John O. 112 00:05:36,360 --> 00:05:40,560 Speaker 1: Steinberg put the thing together, it's really well positioned that 113 00:05:40,640 --> 00:05:42,839 Speaker 1: when things start to cool off here in the US 114 00:05:43,000 --> 00:05:46,360 Speaker 1: and heat up overseas and especially in development countries, it's 115 00:05:46,360 --> 00:05:50,960 Speaker 1: gonna be huge. So, as simple minds would say, don't 116 00:05:51,000 --> 00:05:56,360 Speaker 1: you forget about me? Tom obviously listens to this podcast. 117 00:05:56,600 --> 00:05:58,440 Speaker 1: I love it. Tom. We're gonna have like we should 118 00:05:58,440 --> 00:06:01,599 Speaker 1: put together a Spotify playlist for this afterwards. Well we 119 00:06:01,640 --> 00:06:03,760 Speaker 1: did to give request. Somebody has asked asked us like, 120 00:06:03,920 --> 00:06:06,160 Speaker 1: can you list the tickers you cover? I've asked that 121 00:06:06,200 --> 00:06:09,840 Speaker 1: about the TV show too. Um, now, Eric, how about 122 00:06:09,880 --> 00:06:12,560 Speaker 1: this one? Would you make someone a mix tape of 123 00:06:12,600 --> 00:06:16,360 Speaker 1: all the songs that come up on this episode. Oh? Absolutely, 124 00:06:16,360 --> 00:06:19,520 Speaker 1: but I mean honestly, the more like is a is 125 00:06:19,520 --> 00:06:21,479 Speaker 1: a list of mixed tape of the tickers we cover. 126 00:06:21,560 --> 00:06:25,400 Speaker 1: I think that's the main goal. Anyway, Todd, we're back 127 00:06:25,440 --> 00:06:29,279 Speaker 1: to the questions. You have to be ready, dude, I 128 00:06:29,320 --> 00:06:32,719 Speaker 1: was so JP Morgan. So JP Morgan is crashing the 129 00:06:32,760 --> 00:06:34,839 Speaker 1: et F party. They're about to hit the top ten 130 00:06:35,320 --> 00:06:37,720 Speaker 1: with their Beta builder products being a driver and with 131 00:06:37,800 --> 00:06:40,440 Speaker 1: active management and with multi factor. I really think they're 132 00:06:40,440 --> 00:06:43,080 Speaker 1: going to put the resources behind growing in this space. 133 00:06:43,120 --> 00:06:44,799 Speaker 1: They're not in it just to be on the outside. 134 00:06:44,800 --> 00:06:46,200 Speaker 1: They're in it to be in the top five. I 135 00:06:46,480 --> 00:06:49,200 Speaker 1: think the more interesting question is top four, because Charles 136 00:06:49,240 --> 00:06:51,679 Speaker 1: Schwab is going to kick Investco power Shairs to the curb. 137 00:06:51,760 --> 00:06:54,599 Speaker 1: On that front, Charles Schwab is rapidly headed towards the 138 00:06:54,640 --> 00:06:57,240 Speaker 1: top three player. Right, but they're already five, right, No, 139 00:06:57,360 --> 00:06:59,720 Speaker 1: I know I'm hijacking your questions, so we haven't talked. 140 00:06:59,720 --> 00:07:02,640 Speaker 1: First is first trust in the game. See that was 141 00:07:02,680 --> 00:07:06,279 Speaker 1: my pick. First trust to me is like the quiet baller. 142 00:07:07,040 --> 00:07:08,520 Speaker 1: No matter what they put out, they come up with 143 00:07:08,520 --> 00:07:10,760 Speaker 1: a billion dollars they have. Whenever I talk to people 144 00:07:10,760 --> 00:07:12,560 Speaker 1: on the street, they say, nobody sales people is like 145 00:07:12,560 --> 00:07:14,680 Speaker 1: first Trust, So I would go with First Trust. I 146 00:07:14,720 --> 00:07:17,400 Speaker 1: think JP Morgan Goldman is a good sort of outside 147 00:07:17,400 --> 00:07:19,520 Speaker 1: and I like all your answers, actually, but I would 148 00:07:19,560 --> 00:07:21,680 Speaker 1: have to trust is too easy there. Number six right 149 00:07:25,240 --> 00:07:29,160 Speaker 1: counts you know alright? Number four? Which et F category 150 00:07:29,160 --> 00:07:32,560 Speaker 1: will see the most innovation in the next five years? Dave, uh, 151 00:07:32,640 --> 00:07:35,120 Speaker 1: thematic ets. I think that's where you're seeing most of 152 00:07:35,120 --> 00:07:37,600 Speaker 1: the interesting stuff happen right now. You're going to see 153 00:07:37,600 --> 00:07:40,360 Speaker 1: more active product there, and I think that's where you're 154 00:07:40,360 --> 00:07:42,560 Speaker 1: going to see most of the headline stories. It won't 155 00:07:42,560 --> 00:07:44,080 Speaker 1: be where all the assets are. That will still be 156 00:07:44,080 --> 00:07:46,000 Speaker 1: low cost beta, but I think the stories are all 157 00:07:46,040 --> 00:07:48,440 Speaker 1: gonna be thematic. Todd, Yeah, I think fixed income is 158 00:07:48,440 --> 00:07:50,240 Speaker 1: where we're gonna start to see this. We've started to 159 00:07:50,240 --> 00:07:53,840 Speaker 1: see ascid growth and is mostly in the broadly diversified products. 160 00:07:54,000 --> 00:07:55,640 Speaker 1: But I think there's a lot you can do from 161 00:07:55,640 --> 00:07:58,160 Speaker 1: an active perspective and an index rapper or an et 162 00:07:58,280 --> 00:08:01,080 Speaker 1: F rapper, and a lot of very smart people who 163 00:08:01,160 --> 00:08:03,440 Speaker 1: work at asset management companies who are gonna be looking 164 00:08:03,480 --> 00:08:05,680 Speaker 1: for new roles. Creating an index is going to be 165 00:08:05,760 --> 00:08:08,760 Speaker 1: very important. I think at active equity we get a 166 00:08:08,800 --> 00:08:12,000 Speaker 1: bear market in stocks, there are a couple et fs 167 00:08:12,000 --> 00:08:14,600 Speaker 1: that are poised to go all cash, and if they 168 00:08:14,760 --> 00:08:17,560 Speaker 1: catch it on the downside and sidestep it and then 169 00:08:17,600 --> 00:08:21,640 Speaker 1: get in on the upside, here's a situation where E 170 00:08:21,760 --> 00:08:25,120 Speaker 1: T F company can set themselves apart performance wise, show 171 00:08:25,200 --> 00:08:28,320 Speaker 1: that alpha and they're billions that come in there. I 172 00:08:28,320 --> 00:08:30,600 Speaker 1: I don't I don't buy that these cash flippers that 173 00:08:30,600 --> 00:08:32,080 Speaker 1: that go in and out of the market are going 174 00:08:32,120 --> 00:08:33,640 Speaker 1: to be the thing. Yeah, one of them will catch 175 00:08:33,720 --> 00:08:35,760 Speaker 1: lightning in a bottle, but I don't think investors buy 176 00:08:35,800 --> 00:08:38,720 Speaker 1: that that's a repeatable thing. Okay, so they'll be late 177 00:08:38,760 --> 00:08:41,280 Speaker 1: because they'll buy it after the fact, for sure. But 178 00:08:41,559 --> 00:08:44,959 Speaker 1: med Faber wrote this trend following white paper in two 179 00:08:45,000 --> 00:08:47,480 Speaker 1: thousand and seven. Nobody read it. Nobody at all read 180 00:08:47,520 --> 00:08:51,599 Speaker 1: it after the fact after the bear market. Hundred thousand downloads, 181 00:08:51,600 --> 00:08:54,800 Speaker 1: So it's crazy. Unfortunately, investors are late, But from a 182 00:08:54,840 --> 00:08:58,120 Speaker 1: performance standpoint, somebody's going to be in the position to 183 00:08:58,160 --> 00:09:01,040 Speaker 1: get it. So I'll riff off of Tom and say alternatives. 184 00:09:01,320 --> 00:09:03,640 Speaker 1: And the reason I say that is because if you 185 00:09:03,679 --> 00:09:06,480 Speaker 1: don't have this sort of easy market uh, and there 186 00:09:06,559 --> 00:09:08,719 Speaker 1: is some some down or volatility or a couple of 187 00:09:08,800 --> 00:09:11,880 Speaker 1: years that are negative. Anything that shorting is gonna look 188 00:09:11,920 --> 00:09:13,640 Speaker 1: really good. And I think then you'll see a lot 189 00:09:13,720 --> 00:09:15,800 Speaker 1: of uh some flows, and of course you'll see the 190 00:09:15,800 --> 00:09:18,079 Speaker 1: innovation on top of that. There's been a lot of innovation, 191 00:09:18,080 --> 00:09:20,800 Speaker 1: but I think there'll be more. Alright. Number five, what's 192 00:09:20,840 --> 00:09:22,800 Speaker 1: the problem with E S G t F s? How 193 00:09:22,880 --> 00:09:26,000 Speaker 1: come no one is buying them? Todd? I just think 194 00:09:26,280 --> 00:09:30,800 Speaker 1: people wanna buy simple things from an et F rapper, 195 00:09:30,880 --> 00:09:32,720 Speaker 1: so far and so and the other part of it. 196 00:09:32,840 --> 00:09:35,520 Speaker 1: The problem is is that the money that's in these 197 00:09:35,600 --> 00:09:38,520 Speaker 1: mutual funds is sticky. People are not performance chasing when 198 00:09:38,520 --> 00:09:41,800 Speaker 1: they're buying based on what matters to them from a 199 00:09:41,800 --> 00:09:45,760 Speaker 1: social responsibility, from a government perspective, and environmental perspective. So yeah, 200 00:09:45,760 --> 00:09:48,640 Speaker 1: I just butchered. I made it seg on that. It's 201 00:09:48,679 --> 00:09:51,120 Speaker 1: also complicated for people. So I think the money isn't 202 00:09:51,120 --> 00:09:53,240 Speaker 1: flowing from mutual funds to et F the way it 203 00:09:53,320 --> 00:09:56,880 Speaker 1: is for traditional active management. Maybe at some point it will, Dave, 204 00:09:56,960 --> 00:09:59,280 Speaker 1: I know, yeah, you're an area I think, well, I 205 00:09:59,280 --> 00:10:01,040 Speaker 1: think that money is going to come. I think it's 206 00:10:01,040 --> 00:10:03,199 Speaker 1: a long, slow trickle. We have a thirty trillion dollar 207 00:10:03,840 --> 00:10:06,880 Speaker 1: generational wealth transfer that's happening. That money will hit E 208 00:10:07,080 --> 00:10:09,560 Speaker 1: s G as that money changes hands, but it's just 209 00:10:09,600 --> 00:10:11,720 Speaker 1: gonna take time. That money is gonna be very sticky 210 00:10:11,760 --> 00:10:13,800 Speaker 1: and it's never gonna leave. Once that money is in 211 00:10:13,840 --> 00:10:15,760 Speaker 1: an E s G fund, it's stuck. But will the 212 00:10:15,800 --> 00:10:18,360 Speaker 1: firms survive? Will the will the products stay out there 213 00:10:18,400 --> 00:10:21,840 Speaker 1: long enough? Will the firms be patient enough products to 214 00:10:21,840 --> 00:10:23,600 Speaker 1: be able to do that? We see products closed after 215 00:10:23,640 --> 00:10:25,360 Speaker 1: a few years when they can't get The big thing 216 00:10:25,400 --> 00:10:27,640 Speaker 1: is can they hang with the major market index is 217 00:10:27,720 --> 00:10:30,320 Speaker 1: number one? And can some in fact provide alpha? All 218 00:10:30,360 --> 00:10:32,760 Speaker 1: the back testing shows that there is some alpha to 219 00:10:32,760 --> 00:10:34,920 Speaker 1: be gained there. That's the question. And well, let me 220 00:10:34,920 --> 00:10:38,160 Speaker 1: flip that around on you dave this. Everybody says millennials 221 00:10:38,160 --> 00:10:40,200 Speaker 1: are going to be the E S G um, the 222 00:10:40,240 --> 00:10:42,800 Speaker 1: people who buy s G. But look, let's face it, 223 00:10:42,920 --> 00:10:45,319 Speaker 1: you just said boomers are going to transfer. Boomers were 224 00:10:45,320 --> 00:10:48,560 Speaker 1: the biggest hippies of all generations. How is why is 225 00:10:48,600 --> 00:10:51,640 Speaker 1: nobody selling to them? Why are they why think they were? 226 00:10:51,760 --> 00:10:53,840 Speaker 1: That's where all these guys in Portland, Maine came from 227 00:10:53,920 --> 00:10:56,400 Speaker 1: that started the E s G revolution, But that's not 228 00:10:56,480 --> 00:10:58,720 Speaker 1: where this transfer is coming from. This is coming from 229 00:10:59,240 --> 00:11:02,240 Speaker 1: very high net worth baby boomers who are managing multimillion 230 00:11:02,280 --> 00:11:05,840 Speaker 1: dollar portfolios, but they're seventy years old. Those folks are 231 00:11:05,840 --> 00:11:08,559 Speaker 1: handing that money down. All the surveys suggests that E 232 00:11:08,760 --> 00:11:11,160 Speaker 1: s G concerns are going to be a major factor 233 00:11:11,360 --> 00:11:13,960 Speaker 1: in that wealth transfer. But is there pressure from institutions 234 00:11:14,000 --> 00:11:17,200 Speaker 1: and foundations to actually allocate in that area as well? Well, yeah, 235 00:11:17,240 --> 00:11:19,400 Speaker 1: that's what's building these products. You look at what's come 236 00:11:19,440 --> 00:11:22,400 Speaker 1: out in the s G already, it's been driven by institutions, 237 00:11:22,520 --> 00:11:25,440 Speaker 1: the wealth transfers. What follows, right, But my point is, 238 00:11:25,600 --> 00:11:27,839 Speaker 1: doesn't every generation have sort of the E s G 239 00:11:28,000 --> 00:11:30,560 Speaker 1: thing going on until they get kids, responsibilities and money, 240 00:11:30,600 --> 00:11:33,280 Speaker 1: and then they forget it's too busy. Yeah, that it's 241 00:11:33,320 --> 00:11:35,880 Speaker 1: easy to say that, but we've never seen the kind 242 00:11:35,920 --> 00:11:38,320 Speaker 1: of response we've seen to investor surveys that we see 243 00:11:38,440 --> 00:11:41,240 Speaker 1: right now. Right when when forty five year olds walk 244 00:11:41,320 --> 00:11:44,760 Speaker 1: in with their parents they talk about this with financial advisors, 245 00:11:44,920 --> 00:11:48,080 Speaker 1: it's showing up as the number one concern ahead of performance. Now, 246 00:11:48,080 --> 00:11:50,960 Speaker 1: I don't believe that performance always wins, but it's definitely 247 00:11:51,040 --> 00:11:55,520 Speaker 1: number two. Um, okay, number six. Will there be a 248 00:11:55,520 --> 00:11:59,240 Speaker 1: bitcoin or crypto et F by the end of todd No, 249 00:12:00,000 --> 00:12:02,240 Speaker 1: I see we moved the or maybe we haven't moved 250 00:12:02,240 --> 00:12:04,080 Speaker 1: the goal post a little bit on this, But no, 251 00:12:04,240 --> 00:12:06,880 Speaker 1: I don't think there is. The SEC has concerns about it. 252 00:12:06,920 --> 00:12:08,920 Speaker 1: There isn't the data to backup that this can be 253 00:12:08,960 --> 00:12:12,120 Speaker 1: handled in a way without fraud. It's a hard thing 254 00:12:12,160 --> 00:12:14,760 Speaker 1: to overcome proving that. And I think what we've seen 255 00:12:14,800 --> 00:12:18,040 Speaker 1: recently is people have gotten hurt and in investing in it. 256 00:12:18,080 --> 00:12:20,520 Speaker 1: And I don't think the SEC is making evaluation call 257 00:12:21,000 --> 00:12:23,800 Speaker 1: as a result of this. But bad headlines saying people 258 00:12:23,840 --> 00:12:26,480 Speaker 1: are are getting hurt with these products does not make 259 00:12:26,520 --> 00:12:29,679 Speaker 1: it easier for these products to get approved. Tom Uh, 260 00:12:29,720 --> 00:12:32,920 Speaker 1: they're getting hurt because the value of the cryptos going down. 261 00:12:33,360 --> 00:12:37,240 Speaker 1: There really hasn't been anything that's been fishy underneath. SEC 262 00:12:37,440 --> 00:12:39,080 Speaker 1: is looking at it for sure, they're trying to get 263 00:12:39,120 --> 00:12:41,440 Speaker 1: their arms around it. It will happen by the end 264 00:12:41,480 --> 00:12:44,040 Speaker 1: of two thousand and nineteen. Yeah, And with the caveat that. 265 00:12:44,040 --> 00:12:47,079 Speaker 1: My parent companies Ceboglobal Markets, which lists bitcoin futures. I 266 00:12:47,120 --> 00:12:49,880 Speaker 1: think futures based products are going to be where this happens. 267 00:12:50,120 --> 00:12:52,080 Speaker 1: It's really hard for the SEC to say you can 268 00:12:52,080 --> 00:12:54,320 Speaker 1: invest in oil futures and net gas futures, but you 269 00:12:54,320 --> 00:12:57,040 Speaker 1: can't invest in crypto futures. They settled the same way, 270 00:12:57,040 --> 00:12:59,000 Speaker 1: they trade the same way. I think it's just a 271 00:12:59,040 --> 00:13:02,040 Speaker 1: matter of time. I think the time is. I agree 272 00:13:02,080 --> 00:13:03,720 Speaker 1: with you. I do think it'll be a coin based 273 00:13:03,720 --> 00:13:05,800 Speaker 1: one first, although, be given that you work at cbo E, 274 00:13:06,000 --> 00:13:08,160 Speaker 1: I have to sort of defer that you probably are right. 275 00:13:08,200 --> 00:13:12,400 Speaker 1: But I think a coin based fures you gotta roll them. 276 00:13:14,640 --> 00:13:16,840 Speaker 1: You know, you gotta roll futures. That's troubled a lot 277 00:13:16,880 --> 00:13:18,600 Speaker 1: of E T f s, And it's an extra layer 278 00:13:18,640 --> 00:13:20,400 Speaker 1: of complication that I don't think you'd get from the 279 00:13:20,400 --> 00:13:22,880 Speaker 1: physical How do you how do you get storage? Right? 280 00:13:23,080 --> 00:13:24,839 Speaker 1: I know I would rather buy a physically back one 281 00:13:24,840 --> 00:13:26,680 Speaker 1: then a future one if I had a choice. Yeah. 282 00:13:26,679 --> 00:13:29,160 Speaker 1: But if he use an eighties reference from baseball, Jim 283 00:13:29,240 --> 00:13:30,720 Speaker 1: Rice is in the Hall of Fame. I think if 284 00:13:30,720 --> 00:13:34,400 Speaker 1: we go ten years forward, the most feared hitter in 285 00:13:34,440 --> 00:13:37,559 Speaker 1: baseball from the eighties is not necessarily a mantra that's 286 00:13:37,559 --> 00:13:39,760 Speaker 1: going to get you in the Statistics don't back up. 287 00:13:39,800 --> 00:13:41,440 Speaker 1: He's going to be in there. The data doesn't back 288 00:13:41,520 --> 00:13:44,560 Speaker 1: up to the SEC today. Maybe it will, but today 289 00:13:45,000 --> 00:13:48,360 Speaker 1: it doesn't seem like they're comfortable with it. Okay. Number seven. 290 00:13:48,400 --> 00:13:51,000 Speaker 1: Will there be a zero expense ratio et F in 291 00:13:51,000 --> 00:13:55,160 Speaker 1: the next twelve months? Tom? Yes, absolutely, Todd Yeah, I 292 00:13:55,160 --> 00:13:59,040 Speaker 1: think there will be swabbed. You guys have any other 293 00:13:59,120 --> 00:14:01,840 Speaker 1: opinion on who it might be. So I do think 294 00:14:01,840 --> 00:14:04,080 Speaker 1: it's gonna be swab I would have normally thought Fidelity 295 00:14:04,120 --> 00:14:06,080 Speaker 1: except the partnership they have with I Shares. I don't 296 00:14:06,080 --> 00:14:08,320 Speaker 1: think they're gonna want to compete with products like I 297 00:14:08,400 --> 00:14:10,040 Speaker 1: T O T that are commissioned free on their on 298 00:14:10,080 --> 00:14:12,520 Speaker 1: their platform, where Fidelity is playing in the mutual fund 299 00:14:12,559 --> 00:14:15,200 Speaker 1: space there that doesn't compete. I think Schwab is pretty 300 00:14:15,200 --> 00:14:17,600 Speaker 1: close to doing it. Uh, you know, from where they 301 00:14:17,640 --> 00:14:20,080 Speaker 1: are from an expense ratio standpoint, it just makes sense 302 00:14:20,080 --> 00:14:22,480 Speaker 1: to gather asset. But but I think Vanguard is not 303 00:14:22,520 --> 00:14:24,400 Speaker 1: going to want to give up the low cost trophy. 304 00:14:24,440 --> 00:14:26,280 Speaker 1: I think they're going to tell you know, everybody wants 305 00:14:26,280 --> 00:14:37,800 Speaker 1: to rule the world right exactly. Continue. That's a good one. 306 00:14:39,560 --> 00:14:44,400 Speaker 1: Number eight. What will be the biggest result of the 307 00:14:44,400 --> 00:14:46,760 Speaker 1: new E T F rule the sec OF is implementing 308 00:14:46,800 --> 00:14:50,440 Speaker 1: probably early next year. Dave, increased transparency. I think from 309 00:14:50,480 --> 00:14:52,880 Speaker 1: an investor perspective, that's the part that really matters. All 310 00:14:52,920 --> 00:14:54,760 Speaker 1: the other stuff is nerdy crap only I read what 311 00:14:54,760 --> 00:14:57,240 Speaker 1: do you mean by that? Meaning that they're mandating full 312 00:14:57,280 --> 00:15:01,720 Speaker 1: portfolio disclosure, display of maybe it some discounts, um putting 313 00:15:01,760 --> 00:15:04,000 Speaker 1: all this stuff up on websites on a regular basis, 314 00:15:04,040 --> 00:15:06,360 Speaker 1: in a in a format that people can actually process. 315 00:15:06,480 --> 00:15:08,240 Speaker 1: I think that's going to be a big deal. Tom. 316 00:15:08,280 --> 00:15:10,960 Speaker 1: If you're an advisor, maybe five million to a billion 317 00:15:10,960 --> 00:15:14,680 Speaker 1: dollar advisor, you never before thought about launching your own ETF. 318 00:15:14,880 --> 00:15:17,480 Speaker 1: Now you can do it. Todd, Yeah, I agree with Dave. 319 00:15:17,560 --> 00:15:20,320 Speaker 1: I think the cost transparency is gonna be a big deal. 320 00:15:20,320 --> 00:15:22,320 Speaker 1: People are gonna start to go a little bit beyond 321 00:15:22,320 --> 00:15:24,960 Speaker 1: the expense ratio. Firms are gonna start to market not 322 00:15:25,120 --> 00:15:27,280 Speaker 1: just on the expense ratio, since we've seen a race 323 00:15:27,320 --> 00:15:29,760 Speaker 1: to the bottom there. I would also add that I 324 00:15:29,800 --> 00:15:33,000 Speaker 1: do think you'll see unusual products launched because it'll be 325 00:15:33,080 --> 00:15:35,120 Speaker 1: quicker and easier, and I think you could see a 326 00:15:35,120 --> 00:15:37,560 Speaker 1: lot more um the stuff that people roll their eyes at. 327 00:15:37,800 --> 00:15:39,000 Speaker 1: At the same time, I think you can see more 328 00:15:39,040 --> 00:15:41,880 Speaker 1: active managers jumping in with products that are related to 329 00:15:41,920 --> 00:15:47,640 Speaker 1: their strategies. UH number nine is smart beta a fad 330 00:15:47,880 --> 00:15:50,640 Speaker 1: that will go away once this e t F rule 331 00:15:50,680 --> 00:15:54,920 Speaker 1: gets implemented, and it's more likely to have more active launches. Tom. No, 332 00:15:55,240 --> 00:15:58,200 Speaker 1: factor strategies are always going to be there. Single factor, 333 00:15:58,600 --> 00:16:01,800 Speaker 1: multi factor. Anything it's not market cap weighted to a 334 00:16:01,800 --> 00:16:05,440 Speaker 1: great degree is smart beta, and if it's indexed, it's 335 00:16:05,480 --> 00:16:08,800 Speaker 1: not active. Dao. I was working at Wells Fargo Niko. 336 00:16:08,920 --> 00:16:11,040 Speaker 1: We ran a strategy called Tilton timing. It was a 337 00:16:11,120 --> 00:16:14,560 Speaker 1: multi factor strategy. It's never going away, Todd. I don't 338 00:16:14,600 --> 00:16:16,000 Speaker 1: think there's any reason for it to go away. I 339 00:16:16,040 --> 00:16:18,400 Speaker 1: think everybody in the industry hates the term and has 340 00:16:18,440 --> 00:16:21,160 Speaker 1: their own version of the term. But yet when you 341 00:16:21,200 --> 00:16:24,400 Speaker 1: see surveys out there, it's understood people at least realize 342 00:16:24,480 --> 00:16:27,400 Speaker 1: this is a different approach then market cap weighted or 343 00:16:27,440 --> 00:16:30,520 Speaker 1: not just the apples and ibm s of the world, 344 00:16:30,560 --> 00:16:32,520 Speaker 1: that you are getting a different portfolio. I think this 345 00:16:32,560 --> 00:16:34,840 Speaker 1: is here to stay, and for good reason. People are 346 00:16:34,880 --> 00:16:38,280 Speaker 1: getting good products and they're getting a slightly twist on 347 00:16:38,800 --> 00:16:40,440 Speaker 1: the market cap weight of the approach. And I also 348 00:16:40,480 --> 00:16:42,800 Speaker 1: think there will be an evolution where it's just called 349 00:16:42,840 --> 00:16:45,800 Speaker 1: active eventually. I mean, because smart beta is act, it's yeah, 350 00:16:45,800 --> 00:16:48,200 Speaker 1: it's quant active, Which brings up another question, which is 351 00:16:48,360 --> 00:16:51,400 Speaker 1: should the term be killed once and for all? Todd No, 352 00:16:51,600 --> 00:16:54,040 Speaker 1: I think it's finally moved into the mainstream and people 353 00:16:54,120 --> 00:16:56,520 Speaker 1: are comfortable with it, and it's like Kleenex. You know, 354 00:16:56,560 --> 00:16:58,640 Speaker 1: you don't call a tissue even regardless of the brand 355 00:16:58,640 --> 00:17:01,040 Speaker 1: to what it is. I think people are comfortable with it. 356 00:17:01,120 --> 00:17:04,119 Speaker 1: Everybody that doesn't work in the industry realizes what it 357 00:17:04,160 --> 00:17:06,360 Speaker 1: means to some extent. I think it's here to stay 358 00:17:06,359 --> 00:17:09,320 Speaker 1: in for good reason. Tom, I think we should change 359 00:17:09,880 --> 00:17:14,240 Speaker 1: E t f s the acronym. People still get it wrong, Tom, 360 00:17:14,920 --> 00:17:20,600 Speaker 1: we should call them X funds. Don't fight a brand 361 00:17:20,680 --> 00:17:22,680 Speaker 1: where you can't win. The ets are here to stay. 362 00:17:22,720 --> 00:17:27,000 Speaker 1: Smart bit is here to stay. Number eleven. Where will 363 00:17:27,040 --> 00:17:30,280 Speaker 1: E t F growth come from? The most Which sort 364 00:17:30,280 --> 00:17:33,919 Speaker 1: of investor type? Institutions, advisors or do it yourself retail? 365 00:17:33,960 --> 00:17:36,320 Speaker 1: This will be in the next five years, Todd. So institutions. 366 00:17:36,359 --> 00:17:38,880 Speaker 1: I really think that in many cases they've been laid 367 00:17:38,920 --> 00:17:41,760 Speaker 1: to the party. They the rules haven't been fair for them. 368 00:17:41,800 --> 00:17:46,080 Speaker 1: Insurance companies have about one percent of their potential assets 369 00:17:46,119 --> 00:17:48,880 Speaker 1: invested in fixed income et F. The rule is now 370 00:17:48,960 --> 00:17:50,800 Speaker 1: just changed to make it so you can call fixed 371 00:17:50,800 --> 00:17:54,040 Speaker 1: income ETFs fixed income. And I think we've started to 372 00:17:54,080 --> 00:17:57,320 Speaker 1: see uh, the use of e t f s instead 373 00:17:57,320 --> 00:17:59,680 Speaker 1: of other futures and forward contracts as well. I really 374 00:17:59,720 --> 00:18:02,360 Speaker 1: think they're going to help to drive that and improve liquidity, 375 00:18:02,440 --> 00:18:06,119 Speaker 1: which then helps everybody else. Add as well, Dave agree, 376 00:18:06,119 --> 00:18:09,399 Speaker 1: advisors are pretty tap market six advisors. Now utt f 377 00:18:09,440 --> 00:18:11,680 Speaker 1: s in some fashion or another. Retail will get there, 378 00:18:11,680 --> 00:18:13,800 Speaker 1: but define contribution for owen K is not going to 379 00:18:13,920 --> 00:18:16,520 Speaker 1: really drive anything because mutual funds make more sense. They're 380 00:18:16,840 --> 00:18:20,600 Speaker 1: it's all coming from institutions. Tom, they got it, and 381 00:18:20,680 --> 00:18:23,000 Speaker 1: I will add that institutions if you look at their 382 00:18:23,040 --> 00:18:26,119 Speaker 1: seventy eight trillion in total assets, only about one is 383 00:18:26,160 --> 00:18:28,560 Speaker 1: an et F, So I agree, I'd probably agree, although 384 00:18:28,600 --> 00:18:30,679 Speaker 1: do it yourself retail. We had Fidelity Matt Goolay in 385 00:18:30,720 --> 00:18:32,399 Speaker 1: here and we asked him what the white space and 386 00:18:32,440 --> 00:18:34,800 Speaker 1: ETS was and he said, the retail investor, the direct 387 00:18:34,880 --> 00:18:37,680 Speaker 1: retail because right now I think that percentage is ten 388 00:18:37,720 --> 00:18:41,920 Speaker 1: percent maybe or less, and there's more education going on anyway. 389 00:18:42,040 --> 00:18:44,879 Speaker 1: UM I put that second, and the commission free expansion 390 00:18:44,920 --> 00:18:47,480 Speaker 1: and actually no commission products that Vanguard has had, and 391 00:18:47,520 --> 00:18:50,159 Speaker 1: the broadening list. It's making it easier and easier to 392 00:18:50,280 --> 00:18:52,840 Speaker 1: use ETFs across where it is. I think that's gonna grow. 393 00:18:52,920 --> 00:18:55,960 Speaker 1: I just think there's the pike is potentially so much 394 00:18:55,960 --> 00:18:59,320 Speaker 1: bigger from institutions if they if you make a five 395 00:18:59,760 --> 00:19:03,480 Speaker 1: million dollar trade, much much easier than it is. If 396 00:19:03,640 --> 00:19:06,359 Speaker 1: you know, I can't do that in percentage basis. Retail 397 00:19:06,359 --> 00:19:09,560 Speaker 1: will grow faster on a dollar basis. It's institutions dwarf it. Like, 398 00:19:09,560 --> 00:19:11,480 Speaker 1: how David did that better than I did? Dave? How 399 00:19:11,520 --> 00:19:13,280 Speaker 1: big do you think that slice could get if it 400 00:19:13,359 --> 00:19:15,800 Speaker 1: if they only have one invested right now? Where do 401 00:19:15,840 --> 00:19:20,520 Speaker 1: you think it could go? Speaking of that, this is 402 00:19:20,520 --> 00:19:23,520 Speaker 1: a great segue question number twelve. We had Bogel on 403 00:19:23,520 --> 00:19:25,600 Speaker 1: the podcast a couple of weeks ago. He gave us 404 00:19:25,640 --> 00:19:27,639 Speaker 1: a little excerpt from his upcoming book, which was a 405 00:19:27,640 --> 00:19:30,840 Speaker 1: scoop which he said, in the future, these big asset 406 00:19:30,880 --> 00:19:34,400 Speaker 1: managers are going to have to mutualize themselves, adopt Vanguard 407 00:19:34,400 --> 00:19:37,800 Speaker 1: strategies survive cutting costs will not be enough. Do you 408 00:19:37,840 --> 00:19:40,600 Speaker 1: agree with this, Dave? I know because I think capitalism 409 00:19:40,680 --> 00:19:42,240 Speaker 1: is kind of a force of nature that can't be 410 00:19:42,280 --> 00:19:46,560 Speaker 1: turned off. Tom, Can you see Abby Johnson going into Dad? Hey, Dad, 411 00:19:47,560 --> 00:19:52,399 Speaker 1: I got an idea. Letty. I think it's gonna be 412 00:19:52,400 --> 00:19:56,800 Speaker 1: even harder for you know, companies that are publicly traded. 413 00:19:56,880 --> 00:19:59,400 Speaker 1: You know, Alliance Bernstein that that doesn't have an et 414 00:19:59,480 --> 00:20:04,800 Speaker 1: F present, Black Rocks already, that's already gone in there. 415 00:20:04,800 --> 00:20:07,320 Speaker 1: But firms that are trying to get in and uses 416 00:20:07,359 --> 00:20:09,159 Speaker 1: as a way of doing it. I think publicly traded 417 00:20:09,200 --> 00:20:12,520 Speaker 1: companies are not should they if the better question to 418 00:20:12,560 --> 00:20:14,400 Speaker 1: me is should they do that in order to bring 419 00:20:14,480 --> 00:20:17,520 Speaker 1: costs down? It's certainly something for them to consider, But 420 00:20:17,560 --> 00:20:20,240 Speaker 1: I don't think they're going to do that because shareholders. 421 00:20:20,440 --> 00:20:22,360 Speaker 1: But what do you think the result is in consolidation 422 00:20:22,400 --> 00:20:24,480 Speaker 1: then mergers? Yeah, I think we see what we see 423 00:20:24,720 --> 00:20:27,320 Speaker 1: right now. It's hot m and A. M and A 424 00:20:27,480 --> 00:20:29,920 Speaker 1: is going strong, But doesn't mean that there's not room 425 00:20:29,960 --> 00:20:33,240 Speaker 1: for innovation. All right. Number thirteen, let's talk about buzzwords. 426 00:20:33,359 --> 00:20:34,920 Speaker 1: You know smart beta was the big hit from five 427 00:20:34,960 --> 00:20:37,240 Speaker 1: years ago. The new buzzword is machine learning and AI. 428 00:20:37,680 --> 00:20:39,399 Speaker 1: There's been a lot of launches where they just slapped 429 00:20:39,640 --> 00:20:42,879 Speaker 1: that term on it. Is this a real thing or 430 00:20:43,119 --> 00:20:45,520 Speaker 1: is it marketing? Dave, I think it's a marketing term 431 00:20:45,600 --> 00:20:48,280 Speaker 1: for the kind of innovations we've seen in quant investing 432 00:20:48,800 --> 00:20:52,760 Speaker 1: every day for the last forty years. Technology is really 433 00:20:52,760 --> 00:20:56,520 Speaker 1: helping from a research standpoint. You think about anybody coming 434 00:20:56,520 --> 00:20:58,440 Speaker 1: out of school want to go into business, they want 435 00:20:58,440 --> 00:21:00,959 Speaker 1: to go to Goldman, they want to be an analyst. Right, 436 00:21:01,240 --> 00:21:04,600 Speaker 1: you don't need them today. Computers do the whole thing. Um. 437 00:21:04,640 --> 00:21:08,679 Speaker 1: As far as back testing, it continues to innovate. Listen, 438 00:21:09,119 --> 00:21:11,360 Speaker 1: machine learning is going to help in a big way 439 00:21:11,400 --> 00:21:15,600 Speaker 1: going forward. But as uh they've said over at JP Morgan, 440 00:21:15,760 --> 00:21:19,280 Speaker 1: we really haven't been tested in a bear market with AI. 441 00:21:19,400 --> 00:21:22,359 Speaker 1: At the Helm Todd, I think it's being used in 442 00:21:22,400 --> 00:21:26,160 Speaker 1: a mutual fund rapper more than people realize, and it's 443 00:21:26,200 --> 00:21:28,960 Speaker 1: been working. And Goldman for example, asn't you know, it 444 00:21:29,040 --> 00:21:32,960 Speaker 1: has a very strong presence using quantitative investing in that way. 445 00:21:33,000 --> 00:21:35,520 Speaker 1: I think if they and other firms bring that into 446 00:21:35,560 --> 00:21:37,760 Speaker 1: more of an ET f rapper, I think it's going 447 00:21:37,800 --> 00:21:40,399 Speaker 1: to help. But yeah, buzzwords help to get people to 448 00:21:40,400 --> 00:21:42,840 Speaker 1: pay attention to it. You think you're smarter than an 449 00:21:42,880 --> 00:21:45,640 Speaker 1: index based product, which is basically following the same rule 450 00:21:45,640 --> 00:21:48,120 Speaker 1: book at the computer would Joel, what do you think 451 00:21:48,119 --> 00:21:50,760 Speaker 1: of that term? I mean it's it's it's definitely You've 452 00:21:50,760 --> 00:21:52,800 Speaker 1: written about it, and yeah, no, I actually think that 453 00:21:53,240 --> 00:21:56,640 Speaker 1: it is totally legit. Um. It takes out a human element, 454 00:21:57,200 --> 00:22:00,399 Speaker 1: you know, and it means it means something way beyond tfs. 455 00:22:00,440 --> 00:22:02,560 Speaker 1: To keep in mind, like this is I think gonna 456 00:22:02,600 --> 00:22:06,560 Speaker 1: be a technology that continues to evolve and when people 457 00:22:06,560 --> 00:22:08,720 Speaker 1: can harness it, it's going to be really powerful. I 458 00:22:08,760 --> 00:22:11,080 Speaker 1: do think there's a lot of bunk to it, but 459 00:22:11,160 --> 00:22:14,960 Speaker 1: when it's legit, it's legit alright. Number fourteen. Do e 460 00:22:15,080 --> 00:22:18,439 Speaker 1: t f s pose a systemic risk? Todd No, The 461 00:22:18,640 --> 00:22:21,480 Speaker 1: e t F is just the vehicle that people are 462 00:22:21,480 --> 00:22:24,480 Speaker 1: getting exposure to the marketplace. So I don't think there's 463 00:22:24,520 --> 00:22:26,920 Speaker 1: too much money going into e t f s that 464 00:22:26,960 --> 00:22:29,120 Speaker 1: are gonna cause it. It's still I think it's three 465 00:22:29,119 --> 00:22:31,000 Speaker 1: percent of the money that's in fixed in com ETFs 466 00:22:31,080 --> 00:22:34,000 Speaker 1: is the size of the overall fixed income market. I 467 00:22:34,040 --> 00:22:35,719 Speaker 1: think it's about a little bit bigger than that from 468 00:22:35,720 --> 00:22:39,080 Speaker 1: an equity perspective. There again, I to use the phrase again, 469 00:22:39,119 --> 00:22:41,680 Speaker 1: they're riding in the backseat of the car while individual 470 00:22:41,720 --> 00:22:45,840 Speaker 1: stock pickers are driving the market. When that market becomes volatile, 471 00:22:46,200 --> 00:22:49,160 Speaker 1: they're gonna they're gonna fish crash. Gave ETFs a bad rap. 472 00:22:49,200 --> 00:22:51,000 Speaker 1: Are we going to see that again? Are we going 473 00:22:51,040 --> 00:22:53,919 Speaker 1: to see another flash crash again? Yes, you don't know 474 00:22:54,000 --> 00:22:56,280 Speaker 1: what's gonna happen, but something is inevitably gonna have a 475 00:22:56,280 --> 00:22:59,320 Speaker 1: black swan event is going to happen, and somebody's gonna 476 00:22:59,320 --> 00:23:01,720 Speaker 1: get that teachers, which is what the flash crash was. 477 00:23:01,760 --> 00:23:03,399 Speaker 1: Why does that always come up as an E t 478 00:23:03,560 --> 00:23:05,919 Speaker 1: F issue. Et F got hit, so the proctor and gamble, 479 00:23:06,720 --> 00:23:09,800 Speaker 1: So will they be painted with the same brush again. Yeah, 480 00:23:09,880 --> 00:23:12,040 Speaker 1: of course they're gonna always get the blame, always get 481 00:23:12,040 --> 00:23:14,199 Speaker 1: the blame. But the money that's flown into E t 482 00:23:14,320 --> 00:23:16,399 Speaker 1: F since then is what double and triple. It's not 483 00:23:16,440 --> 00:23:19,400 Speaker 1: as if get scared out of the only people who 484 00:23:19,400 --> 00:23:21,800 Speaker 1: are talking about it. You know our mutual fund companies 485 00:23:21,840 --> 00:23:24,000 Speaker 1: that want to use that as a reason to say 486 00:23:24,040 --> 00:23:26,879 Speaker 1: stick with us, will hold onto your money. At four pm, 487 00:23:26,880 --> 00:23:29,120 Speaker 1: E t F Well, E t F s right now 488 00:23:29,200 --> 00:23:33,040 Speaker 1: own seven percent eight percent of stocks right, whether it's Apple, 489 00:23:33,080 --> 00:23:35,960 Speaker 1: any stock. What number would that have to get to 490 00:23:36,200 --> 00:23:38,960 Speaker 1: before you thought there was this the stomach risk post 491 00:23:40,560 --> 00:23:43,200 Speaker 1: tom I don't think it's going to be a risk 492 00:23:43,280 --> 00:23:46,160 Speaker 1: at all, alright, Dodd, I don't. I would be making 493 00:23:46,200 --> 00:23:48,040 Speaker 1: up a number that's out there. And like you, I'm 494 00:23:48,040 --> 00:23:50,760 Speaker 1: not in the prediction business. Yes you are. Your whole 495 00:23:50,760 --> 00:23:53,359 Speaker 1: business is predicting like not in not in the what 496 00:23:53,600 --> 00:23:58,920 Speaker 1: if the sky is falling, not wild scenarios. Okay, all right, now, 497 00:23:59,080 --> 00:24:01,440 Speaker 1: now that you guys said there's no systemic risk problems, 498 00:24:01,720 --> 00:24:04,240 Speaker 1: give me one legit concern you do have regarding e 499 00:24:04,320 --> 00:24:09,360 Speaker 1: t S tom Um. I think if we get into 500 00:24:09,960 --> 00:24:13,840 Speaker 1: some thematic ETFs that are illiquid and you know, whether 501 00:24:13,880 --> 00:24:17,480 Speaker 1: it's emerging market's emerging market debt, that's a little bit 502 00:24:17,480 --> 00:24:20,199 Speaker 1: of concern, But over time we've really done a good 503 00:24:20,280 --> 00:24:23,840 Speaker 1: job handling it. I don't really have any major concerns 504 00:24:23,840 --> 00:24:27,119 Speaker 1: about liquidity at this point. But as we continue to 505 00:24:27,160 --> 00:24:30,560 Speaker 1: branch out and innovate, they're going to be some unfulfilled 506 00:24:30,840 --> 00:24:33,720 Speaker 1: or or areas right now that are not represented in 507 00:24:33,760 --> 00:24:36,560 Speaker 1: the e t F space that might be a little 508 00:24:36,560 --> 00:24:41,119 Speaker 1: bit risky going into, especially with the new ETF rule, okay, Dave. Uh. Similarly, 509 00:24:41,160 --> 00:24:43,040 Speaker 1: I think that e t F now give us access 510 00:24:43,080 --> 00:24:46,200 Speaker 1: to virtually everything leaveriede oil, whatever it is you want. 511 00:24:46,680 --> 00:24:49,080 Speaker 1: We don't have a way of gate keeping any of 512 00:24:49,080 --> 00:24:52,000 Speaker 1: those products from individual investors. I think that's a problem. Eric. 513 00:24:52,000 --> 00:24:54,320 Speaker 1: I know you always talk about your system for red 514 00:24:54,400 --> 00:24:57,119 Speaker 1: lights or movie ratings, um, but ultimately it's going to 515 00:24:57,200 --> 00:24:59,680 Speaker 1: have to be something that comes from a regulatory standpoint. 516 00:24:59,720 --> 00:25:02,080 Speaker 1: It's and I have to come frankly from FINRA. They're 517 00:25:02,080 --> 00:25:04,240 Speaker 1: gonna have to put a place something in place that 518 00:25:04,240 --> 00:25:07,120 Speaker 1: it actually creates gates for some of the more esoteric products. 519 00:25:07,480 --> 00:25:10,200 Speaker 1: What would that look like. It could be as simple 520 00:25:10,320 --> 00:25:14,000 Speaker 1: as FINRA saying that people who access a vehicle like 521 00:25:14,520 --> 00:25:17,439 Speaker 1: futures based product have to sign the same paperwork they 522 00:25:17,480 --> 00:25:20,640 Speaker 1: would if they were going to open a future's account. Todd, 523 00:25:21,040 --> 00:25:24,080 Speaker 1: I think the risk is that people performance chase without 524 00:25:24,160 --> 00:25:26,879 Speaker 1: understanding what it is they're buying. So they're buying something 525 00:25:26,920 --> 00:25:29,480 Speaker 1: that was hot and then they don't really and they 526 00:25:29,600 --> 00:25:31,479 Speaker 1: walk away and don't come back to it until they 527 00:25:31,520 --> 00:25:33,800 Speaker 1: realize that the thing has crashed back down to the 528 00:25:33,840 --> 00:25:36,120 Speaker 1: middle where it is. I think the money has gone 529 00:25:36,119 --> 00:25:38,240 Speaker 1: into e t s without people understanding what it is 530 00:25:38,240 --> 00:25:41,199 Speaker 1: they're buying, and if they're buying well diversified market cap 531 00:25:41,280 --> 00:25:43,840 Speaker 1: weighted products, then that's great, but in some cases they're 532 00:25:43,840 --> 00:25:45,800 Speaker 1: buying things that they shouldn't be buying. Yeah, and I 533 00:25:45,800 --> 00:25:48,320 Speaker 1: would riff off that. My biggest concern is in line 534 00:25:48,359 --> 00:25:51,840 Speaker 1: with Vogels, which is overtrading. They're so good, they're so cheap, 535 00:25:51,880 --> 00:25:54,800 Speaker 1: they're so easy, and you get everything. It can be 536 00:25:54,840 --> 00:25:56,920 Speaker 1: a bit like stepping into a casino and you could 537 00:25:56,920 --> 00:25:59,040 Speaker 1: lose your mind just trading all day. But you could 538 00:25:59,000 --> 00:26:01,280 Speaker 1: do that with any You could just say same. I mean, 539 00:26:01,320 --> 00:26:03,760 Speaker 1: that's just always how it is. I agree. But although 540 00:26:04,119 --> 00:26:07,000 Speaker 1: to retail investors there's extra things they serve up in 541 00:26:07,080 --> 00:26:10,400 Speaker 1: certain ways. So that's that's what's important. From the brokerage perspective. 542 00:26:10,560 --> 00:26:13,639 Speaker 1: The firms that are going with so broad a commission 543 00:26:13,680 --> 00:26:16,920 Speaker 1: free offering, how important et F education is making sure 544 00:26:16,960 --> 00:26:19,480 Speaker 1: that there's enough there so that they can try to 545 00:26:19,520 --> 00:26:22,920 Speaker 1: protect investors from themselves. I actually wonder if there isn't 546 00:26:22,960 --> 00:26:25,520 Speaker 1: like a different solution that you know, I think of 547 00:26:25,560 --> 00:26:27,520 Speaker 1: like the conversation we had with Betterment a little bit, 548 00:26:27,600 --> 00:26:30,199 Speaker 1: which is when you actually go and try and trade something, 549 00:26:30,359 --> 00:26:33,280 Speaker 1: they warn you about the tax implications of it. So 550 00:26:33,359 --> 00:26:35,680 Speaker 1: I wonder if there isn't some sort of like technological 551 00:26:35,760 --> 00:26:40,239 Speaker 1: or behavioral solution that doesn't help incentivize people to not 552 00:26:40,480 --> 00:26:43,600 Speaker 1: trade too frequently. But that would be but that would 553 00:26:43,600 --> 00:26:46,200 Speaker 1: be sort of on a platform by platform basis, I think. 554 00:26:46,760 --> 00:26:48,840 Speaker 1: And there are pop ups that are on some of 555 00:26:48,880 --> 00:26:51,280 Speaker 1: the platforms. I mean, they do exist, but I hear you. 556 00:26:51,320 --> 00:26:54,359 Speaker 1: I think and obviously our system, like I said, I 557 00:26:54,440 --> 00:26:56,119 Speaker 1: think there should be movie ratings for E T F 558 00:26:56,160 --> 00:26:58,040 Speaker 1: S or something akin we have that if you have 559 00:26:58,040 --> 00:27:02,640 Speaker 1: a terminal, give me a call um um okay, number 560 00:27:02,640 --> 00:27:04,920 Speaker 1: sixteam related. If you were the SEC and you had, 561 00:27:05,000 --> 00:27:08,119 Speaker 1: you know, complete control, would you ban leveraged and or 562 00:27:08,280 --> 00:27:12,960 Speaker 1: vix ETPs right now? They absolutely not? Tom Todd, No, 563 00:27:13,119 --> 00:27:15,560 Speaker 1: I think they serve a role for some people. I 564 00:27:15,640 --> 00:27:18,239 Speaker 1: just think they're abused by probably more people than they 565 00:27:18,240 --> 00:27:21,440 Speaker 1: should be. Even with what vix went through, vix has 566 00:27:21,520 --> 00:27:24,199 Speaker 1: been very very low. There's a market there, there's a demand. 567 00:27:25,000 --> 00:27:26,760 Speaker 1: All these products do what they say on the tin, 568 00:27:27,040 --> 00:27:29,000 Speaker 1: and that's the thing. And that's why I said, I 569 00:27:29,000 --> 00:27:31,439 Speaker 1: think the right answer here is gate keeping these products 570 00:27:31,480 --> 00:27:33,560 Speaker 1: for certain kinds of investors. If I have a Schwab account, 571 00:27:33,560 --> 00:27:35,680 Speaker 1: I shouldn't be allowed to trade something based on futures 572 00:27:35,720 --> 00:27:38,399 Speaker 1: without some sort of positive acknowledgement that I know I'm 573 00:27:38,400 --> 00:27:40,600 Speaker 1: gonna get my face burned off. Well, you know brokerage firms, 574 00:27:40,600 --> 00:27:43,359 Speaker 1: you know that wire house firms, They in many cases 575 00:27:43,400 --> 00:27:47,640 Speaker 1: they preclude advisors from them. So the differences a self 576 00:27:47,640 --> 00:27:50,840 Speaker 1: directed investor who doesn't want to pay for that extra 577 00:27:51,040 --> 00:27:54,640 Speaker 1: service or or advice that's there, that's what they're missing out. 578 00:27:54,680 --> 00:27:56,480 Speaker 1: It shouldn't it shouldn't be a service to put up 579 00:27:56,480 --> 00:27:58,479 Speaker 1: a pop up that says you haven't filled up futures 580 00:27:58,520 --> 00:28:02,080 Speaker 1: market paperwork. Would that be a DOCU sign agreement? Sure? 581 00:28:05,640 --> 00:28:09,320 Speaker 1: Um okay. Number seventeen will brand name index providers like 582 00:28:09,440 --> 00:28:11,440 Speaker 1: M S, c I, SNP and, hate to say it, 583 00:28:11,480 --> 00:28:15,480 Speaker 1: Bloomberg Barkley's be replaced by self indexing as fee pressures 584 00:28:15,520 --> 00:28:20,119 Speaker 1: come down, Dave, Uh, it's not a yes or no answer. 585 00:28:20,280 --> 00:28:24,040 Speaker 1: Over time, it's gradually hiding in that direction, especially when 586 00:28:24,040 --> 00:28:26,960 Speaker 1: you look at UH from the cost standpoint. It's going 587 00:28:27,040 --> 00:28:29,440 Speaker 1: to be a part of it. And there's some companies 588 00:28:29,480 --> 00:28:32,399 Speaker 1: out there that you know, three or four percent As 589 00:28:32,400 --> 00:28:35,760 Speaker 1: far as an indexing charge really means something, And when 590 00:28:35,760 --> 00:28:38,480 Speaker 1: you ask the individual investors and the asked the advisors, 591 00:28:38,720 --> 00:28:42,520 Speaker 1: is it really important that that index name being there 592 00:28:42,600 --> 00:28:45,560 Speaker 1: and it tied specifically to it, it's not as important. 593 00:28:45,680 --> 00:28:48,480 Speaker 1: So since I said institutional investors are going to be 594 00:28:48,480 --> 00:28:52,560 Speaker 1: a key driver going forward, Institutional investors want in many 595 00:28:52,600 --> 00:28:54,960 Speaker 1: cases want that SMP, want that m s c I 596 00:28:55,080 --> 00:28:58,280 Speaker 1: want that Bloomberg Barkley's behind it. And so the products 597 00:28:58,280 --> 00:29:00,880 Speaker 1: that are catering to that market are going to do so. 598 00:29:01,080 --> 00:29:03,840 Speaker 1: And it's but it's not because they love the brand, right, 599 00:29:03,880 --> 00:29:06,120 Speaker 1: It's not like nobody got fired for buying IBM. It's 600 00:29:06,160 --> 00:29:09,040 Speaker 1: because they want to buy an ms c I emerging 601 00:29:09,080 --> 00:29:11,800 Speaker 1: markets product because they know the methodology will match up 602 00:29:11,840 --> 00:29:15,200 Speaker 1: with how they're thinking about, you know, their US exposure 603 00:29:15,280 --> 00:29:18,320 Speaker 1: or some other country. Right, that commonality of methodology is 604 00:29:18,360 --> 00:29:21,080 Speaker 1: the reason you pay up to be part of the 605 00:29:21,120 --> 00:29:23,920 Speaker 1: self index be close enough. Well, it can if you're 606 00:29:23,960 --> 00:29:26,360 Speaker 1: not an institution that needs to run it through Bloomberg 607 00:29:26,440 --> 00:29:29,440 Speaker 1: terminal to do analysis. I agree for anybody not an institution, 608 00:29:29,480 --> 00:29:31,120 Speaker 1: I think it's it's it's going to go that way. 609 00:29:31,240 --> 00:29:34,480 Speaker 1: Vanguard proved that doesn't matter. They went to CRISP and 610 00:29:34,520 --> 00:29:36,720 Speaker 1: they got seven hundred billion in those indexes. Since then, 611 00:29:37,040 --> 00:29:39,640 Speaker 1: black Rock dump some some of our indexes and they 612 00:29:39,680 --> 00:29:42,720 Speaker 1: did find. And I think the one thing that is 613 00:29:42,760 --> 00:29:45,480 Speaker 1: there's some rock star indexes like SMP five hundred and 614 00:29:45,600 --> 00:29:47,800 Speaker 1: ms c I emerging markets that probably are just too 615 00:29:47,840 --> 00:29:50,640 Speaker 1: big to mess right, Okay, last three which are I 616 00:29:50,680 --> 00:29:52,840 Speaker 1: think more on the lighter side, but you know, looking 617 00:29:52,880 --> 00:29:56,280 Speaker 1: for your legit answers Number eighteen. If you could invest 618 00:29:56,400 --> 00:29:59,200 Speaker 1: in one et F with your entire life savings, what 619 00:29:59,320 --> 00:30:03,840 Speaker 1: would it be, Tom, I'm gonna say the Investco Guggenheim 620 00:30:03,960 --> 00:30:09,560 Speaker 1: ride X RSP five hundred equal weight. Wow, that is 621 00:30:09,640 --> 00:30:11,400 Speaker 1: that's not a bad pull at all. Yeah, it's out 622 00:30:11,440 --> 00:30:15,360 Speaker 1: of the box, but not that crazy RSP. So this 623 00:30:15,400 --> 00:30:17,680 Speaker 1: basically is SMP five undred, except every s thought gets 624 00:30:17,720 --> 00:30:21,640 Speaker 1: the same waiting, which I think is point two. Yeah, Todd, Yeah, 625 00:30:21,640 --> 00:30:23,200 Speaker 1: I didn't think we're going to get to this question, 626 00:30:23,240 --> 00:30:28,080 Speaker 1: so I didn't have an Okay, okay, that just super 627 00:30:28,120 --> 00:30:33,400 Speaker 1: boring s H B B B yeah Todd, Yeah, I 628 00:30:33,400 --> 00:30:35,720 Speaker 1: would go to total market a total market product as well. 629 00:30:35,760 --> 00:30:39,200 Speaker 1: So I shares I T O T And why would 630 00:30:39,240 --> 00:30:41,600 Speaker 1: you pick that one over SWAB? I think I like 631 00:30:42,000 --> 00:30:48,760 Speaker 1: the SMP brand that's behind it as well. That on 632 00:30:48,840 --> 00:30:51,880 Speaker 1: the fly, I mean there there's you know that you've 633 00:30:51,920 --> 00:30:54,920 Speaker 1: got vanguards VT V T I, So I would go 634 00:30:54,960 --> 00:30:58,520 Speaker 1: with VT. That's the total market plus the international. It's global, 635 00:30:58,960 --> 00:31:00,960 Speaker 1: so it's basically the whole equity side and one shot. 636 00:31:01,000 --> 00:31:03,240 Speaker 1: Now there are asset allocation ets but for some reason 637 00:31:03,280 --> 00:31:05,560 Speaker 1: I don't like them. Nobody does. They do bonds and 638 00:31:05,600 --> 00:31:07,360 Speaker 1: stocks together. But I'd have to go with that VT 639 00:31:07,480 --> 00:31:10,000 Speaker 1: if I had to pick. But I now have a 640 00:31:10,040 --> 00:31:11,760 Speaker 1: flashback that I think I got asked this question the 641 00:31:11,840 --> 00:31:13,200 Speaker 1: last time I was on, and you're gonna play the 642 00:31:13,200 --> 00:31:17,080 Speaker 1: clip when I use a different problem. Um, Dave, that's 643 00:31:17,080 --> 00:31:19,360 Speaker 1: a good question. Why don't people like the asset allocation 644 00:31:19,400 --> 00:31:21,360 Speaker 1: ETFs sort of like do it all for you in 645 00:31:21,440 --> 00:31:23,640 Speaker 1: one shot? Well, the big reason is because a lot 646 00:31:23,680 --> 00:31:26,200 Speaker 1: of these UH funds are sold by advisors, and if 647 00:31:26,200 --> 00:31:28,560 Speaker 1: the advisor puts you in a single product, you fire 648 00:31:28,600 --> 00:31:31,520 Speaker 1: your advisor, right, So you need to have some break 649 00:31:31,720 --> 00:31:34,240 Speaker 1: up of this in order to have a conversation around 650 00:31:34,280 --> 00:31:37,680 Speaker 1: what the asset allocation is. And also, your risk tolerance 651 00:31:37,760 --> 00:31:39,320 Speaker 1: is not gonna be the same as mine. I'm older 652 00:31:39,360 --> 00:31:41,360 Speaker 1: than dirt, you're young, you've got a young family. We're 653 00:31:41,360 --> 00:31:44,480 Speaker 1: gonna have different risk tolerances and Traditionally you rebalance the 654 00:31:44,560 --> 00:31:47,600 Speaker 1: asset weights to deal with that. UM and target tape 655 00:31:47,600 --> 00:31:49,600 Speaker 1: funds have never taken off in e t f s, 656 00:31:49,800 --> 00:31:52,200 Speaker 1: frankly because they don't work. In for case, you guys 657 00:31:52,200 --> 00:31:54,800 Speaker 1: recently wrote about that, I think on et f dot com. 658 00:31:54,880 --> 00:31:56,840 Speaker 1: Thank you for that. I was that I was quoted in. 659 00:31:56,960 --> 00:31:59,760 Speaker 1: So it's not just it's it's not just a shameless one. 660 00:31:59,800 --> 00:32:01,840 Speaker 1: What he have referenced that article if he was not quoted, 661 00:32:02,240 --> 00:32:06,680 Speaker 1: that's the question. You know, he is too smooth. Okay, Joel, 662 00:32:06,720 --> 00:32:08,400 Speaker 1: do you have an answer for this? Have you still 663 00:32:08,800 --> 00:32:11,080 Speaker 1: think my great idea for an e t F is 664 00:32:11,120 --> 00:32:13,880 Speaker 1: the easy button ticker easy? And I still want that 665 00:32:13,880 --> 00:32:17,320 Speaker 1: thing to exist and it's like the only and that 666 00:32:17,400 --> 00:32:19,880 Speaker 1: was the idea, but nobody put any money in it. Well, 667 00:32:20,160 --> 00:32:22,720 Speaker 1: big idea doesn't mean it's not a great idea, man. 668 00:32:23,520 --> 00:32:26,160 Speaker 1: Don't take it from a blast from the past of 669 00:32:26,160 --> 00:32:29,520 Speaker 1: the eighties. Okay, number nineteen. If you could invest in 670 00:32:29,560 --> 00:32:31,360 Speaker 1: only one e t F with the ten percent of 671 00:32:31,360 --> 00:32:33,520 Speaker 1: your account that you have some fun with, what would 672 00:32:33,520 --> 00:32:38,720 Speaker 1: you pick? Dave? Oh, that's tricky. Um, Hey Todd, somebody 673 00:32:38,880 --> 00:32:40,760 Speaker 1: come back to me. I feel like I didn't mean 674 00:32:40,800 --> 00:32:42,560 Speaker 1: to be using eye shares again. But I like M 675 00:32:42,640 --> 00:32:44,560 Speaker 1: t U M so. I think putting a little bit 676 00:32:44,600 --> 00:32:46,480 Speaker 1: momentum behind it. I think the trend is your friend. 677 00:32:46,840 --> 00:32:49,240 Speaker 1: If it's part of the portfolio in a in a 678 00:32:49,280 --> 00:32:51,800 Speaker 1: slice instead of the whole portfolio, I think can add 679 00:32:51,800 --> 00:32:55,760 Speaker 1: a little juice to it. You're so risky, it's ten 680 00:32:56,240 --> 00:32:59,480 Speaker 1: of my sometimes do you have after dinner mints? Before dinner, 681 00:33:01,800 --> 00:33:03,840 Speaker 1: I'm gonna get crazy and take my socks off. I have. 682 00:33:04,160 --> 00:33:06,320 Speaker 1: I have a crazy answer. My crazy answer is e 683 00:33:06,440 --> 00:33:09,480 Speaker 1: M l C Emerging market local currency. That's that's a 684 00:33:09,520 --> 00:33:14,880 Speaker 1: good one. But you're not going to hit a home run, 685 00:33:16,880 --> 00:33:20,720 Speaker 1: not like I mean, it's not gonna triple by that one. Well, 686 00:33:20,800 --> 00:33:23,280 Speaker 1: because I think most people don't take enough risk with 687 00:33:23,320 --> 00:33:25,600 Speaker 1: their bond portfolios in general. It was easy to grab 688 00:33:25,720 --> 00:33:29,280 Speaker 1: HACK or you know, you know, ARC or something that's 689 00:33:29,280 --> 00:33:31,680 Speaker 1: out there on the edge pushing technology. But that's also 690 00:33:31,720 --> 00:33:33,680 Speaker 1: where you would play with single stocks. E M L 691 00:33:33,720 --> 00:33:36,120 Speaker 1: see something I'm never gonna buy on my own. I 692 00:33:36,160 --> 00:33:37,760 Speaker 1: Am not going to go figure out how to buy 693 00:33:37,760 --> 00:33:45,400 Speaker 1: South African debt a r k K. That's the r innovation, right, Okay, 694 00:33:45,440 --> 00:33:51,040 Speaker 1: So it's got we talked about aids, active management. It's 695 00:33:51,040 --> 00:33:54,120 Speaker 1: got genome sequencing in there. I mean, it's kind of 696 00:33:54,120 --> 00:33:56,920 Speaker 1: a theme thematic greatest hits man And if you ever 697 00:33:56,960 --> 00:33:59,280 Speaker 1: go see those people, they have an open house every 698 00:33:59,400 --> 00:34:03,720 Speaker 1: Wednesday afternoon. You can sit around and chat with the analysts. Uh, 699 00:34:03,760 --> 00:34:06,760 Speaker 1: they're doing some stuff that's pretty special. I would go 700 00:34:06,920 --> 00:34:10,080 Speaker 1: with m J. And I say that because I like 701 00:34:10,239 --> 00:34:13,440 Speaker 1: E T f s that are out there wrapping up 702 00:34:13,520 --> 00:34:16,000 Speaker 1: a toddler industry that you think is going to grow big, 703 00:34:16,040 --> 00:34:19,080 Speaker 1: which I do and has not. In these these companies 704 00:34:19,120 --> 00:34:20,480 Speaker 1: will take them years to get in a lot of 705 00:34:20,480 --> 00:34:23,440 Speaker 1: them getting it's an acquisition. It's a a lot of 706 00:34:23,480 --> 00:34:26,399 Speaker 1: targets for acquisitions in there. And I just think that's 707 00:34:26,480 --> 00:34:28,439 Speaker 1: part of investing is speculating, and that's what I would 708 00:34:28,440 --> 00:34:30,880 Speaker 1: go with. How about Udell, I don't think part of 709 00:34:31,000 --> 00:34:34,879 Speaker 1: investing is speculating, but if we're playing that game, well 710 00:34:34,880 --> 00:34:38,799 Speaker 1: this is this is the ten well maybe one percent, right, 711 00:34:38,840 --> 00:34:41,919 Speaker 1: But the microcap question, I always like that one eric 712 00:34:42,880 --> 00:34:45,359 Speaker 1: going into the trying to get the super super small 713 00:34:45,400 --> 00:34:48,400 Speaker 1: stuff that might have a huge payout. And the microcaps interesting, 714 00:34:48,440 --> 00:34:51,960 Speaker 1: there's a thousand microcaps and um, almost none of them 715 00:34:51,960 --> 00:34:53,880 Speaker 1: are even in the broad market. But Dave shaking his 716 00:34:53,880 --> 00:34:56,959 Speaker 1: head the wrong way to play microcaps because you can't 717 00:34:56,960 --> 00:34:58,839 Speaker 1: because you can't close them. Right, So you wait, if 718 00:34:58,840 --> 00:35:01,840 Speaker 1: you want microcap, you want to go find some actively managed, 719 00:35:02,320 --> 00:35:05,600 Speaker 1: you know, probably too expensive mutual fund that can close 720 00:35:05,640 --> 00:35:07,400 Speaker 1: the fund when it hits a billion dollars because if 721 00:35:07,400 --> 00:35:09,719 Speaker 1: it's microcaps, you can't buy enough of them to matter. 722 00:35:09,760 --> 00:35:14,120 Speaker 1: And then that's a great point slapdown again. Sorry, sorry, Joel. 723 00:35:14,800 --> 00:35:16,640 Speaker 1: All right, Joel, I'm gonna let you ask the last 724 00:35:16,719 --> 00:35:19,120 Speaker 1: question since it's it's what you're how we close all 725 00:35:19,120 --> 00:35:24,319 Speaker 1: the shows. Okay, So, Dave favorite ticker, uh, you know 726 00:35:24,600 --> 00:35:28,080 Speaker 1: m J. I think MJ's a fantastic ticker. Tom favorite ticker, 727 00:35:28,400 --> 00:35:36,200 Speaker 1: uh the Wisdom Tree, short egg etf shag. Yeah, so 728 00:35:36,239 --> 00:35:39,240 Speaker 1: you are going back to the eighties. Those are early nineties, 729 00:35:39,280 --> 00:35:42,799 Speaker 1: I think, okay, and the sixties and Todd, what was 730 00:35:42,960 --> 00:35:45,240 Speaker 1: what was your favorite last time? And has it changed? 731 00:35:45,480 --> 00:35:47,040 Speaker 1: So I don't remember what I had last time, but 732 00:35:47,120 --> 00:35:49,760 Speaker 1: it has changed because I actually wasn't caught off guard 733 00:35:50,040 --> 00:35:52,120 Speaker 1: with this, and since we are doing an eighties theme here. 734 00:35:52,320 --> 00:35:53,920 Speaker 1: In the eighties, I was eating a lot of peanut 735 00:35:53,920 --> 00:35:59,040 Speaker 1: butter and jelly so p B and PBJ. PBJ is 736 00:35:59,120 --> 00:36:05,560 Speaker 1: the investi dynamic Food and Beverage portfolio. It's like chicken 737 00:36:05,600 --> 00:36:09,160 Speaker 1: and beer companies. It's like companies that make peanut butter 738 00:36:09,440 --> 00:36:13,560 Speaker 1: and jelly. Yeah, honestly, yeah, it's like what you when 739 00:36:13,600 --> 00:36:16,240 Speaker 1: you go to a barbecue. It's these companies basically provide 740 00:36:16,239 --> 00:36:18,759 Speaker 1: all the stuff hacks. Hacks a good second choice. Hack 741 00:36:18,880 --> 00:36:21,680 Speaker 1: is really good. I like hack. I like verbs, so 742 00:36:21,800 --> 00:36:24,600 Speaker 1: I like move hack. That's why Toke I think is 743 00:36:24,640 --> 00:36:27,680 Speaker 1: a gem. So I'm a big verb guy. I like verbs, 744 00:36:27,719 --> 00:36:29,200 Speaker 1: so I would have to go with hack. I think 745 00:36:29,760 --> 00:36:32,320 Speaker 1: my new favorite is is Nash. I mean it's not 746 00:36:32,440 --> 00:36:34,200 Speaker 1: like it's a new product, but I just love the 747 00:36:34,239 --> 00:36:38,840 Speaker 1: fact that's okay, alright, there you go. Some of the 748 00:36:38,960 --> 00:36:41,160 Speaker 1: Nashville et f Yeah, man, I love the idea that 749 00:36:41,239 --> 00:36:43,279 Speaker 1: somebody like took a city and wrapped it in an 750 00:36:43,320 --> 00:36:47,480 Speaker 1: e TF and no one bought it. It's funny. We 751 00:36:47,560 --> 00:36:49,400 Speaker 1: have some nerds here, So can you guys tell me 752 00:36:49,719 --> 00:36:55,120 Speaker 1: how nash wasn't the first local et f ever Oklahoma? Yes, 753 00:36:55,280 --> 00:36:58,200 Speaker 1: there was an Oklahoma e t F. I mean, talking 754 00:36:58,200 --> 00:37:01,080 Speaker 1: about being ahead of your time, I thought, oh, there's 755 00:37:01,160 --> 00:37:03,919 Speaker 1: there's hardly anything and fixed income in commodities. Let's let's 756 00:37:03,960 --> 00:37:08,200 Speaker 1: do Oklahoma. Well, we hope we bring him back. One day. 757 00:37:08,280 --> 00:37:11,800 Speaker 1: They brought ef Hutton back, didn't they. And there was 758 00:37:11,840 --> 00:37:14,719 Speaker 1: a Texas right, there was a Texas ETF. Yeah. Yeah, 759 00:37:14,800 --> 00:37:17,040 Speaker 1: there's the person who can with local shares. I didn't 760 00:37:17,040 --> 00:37:18,840 Speaker 1: meet him. He did want to do other cities. Should 761 00:37:18,840 --> 00:37:20,759 Speaker 1: just go through and do every airport in the world, 762 00:37:20,800 --> 00:37:22,800 Speaker 1: so you get you know, O R D and JFK 763 00:37:23,080 --> 00:37:28,040 Speaker 1: and well Nashville. They were saying that JFK's I'm pretty 764 00:37:28,120 --> 00:37:31,040 Speaker 1: confident that that's like one of the I shares small 765 00:37:31,680 --> 00:37:35,600 Speaker 1: JKF J Okay, I'm still thinking about E T F 766 00:37:35,719 --> 00:37:39,640 Speaker 1: S being e F T Yeah. I got a great 767 00:37:39,640 --> 00:37:45,600 Speaker 1: I got a great send off. Thank you nerves. Well, guys, 768 00:37:45,680 --> 00:37:48,200 Speaker 1: thank you very much. This was great. You gotta talk 769 00:37:48,200 --> 00:37:51,120 Speaker 1: about cramming a lot into one podcast, Joel, did you 770 00:37:51,239 --> 00:37:54,120 Speaker 1: learn anything? I learned a lot um, mainly that you 771 00:37:54,200 --> 00:37:56,920 Speaker 1: guys really like to slap down non nerds, so I 772 00:37:57,000 --> 00:38:01,480 Speaker 1: appreciate that gate keeping man. Alright, guys, it's been a 773 00:38:01,520 --> 00:38:03,759 Speaker 1: pleasure see you guys on the flip side. Thank you guys, 774 00:38:03,840 --> 00:38:12,040 Speaker 1: thanks for having Thanks for listening to trillion until next time. 775 00:38:12,280 --> 00:38:14,960 Speaker 1: You can find us on the Bloomberg terminal, Bloomberg dot com, 776 00:38:15,320 --> 00:38:18,879 Speaker 1: Apple Podcast, Spotify, and wherever else you like to listen. 777 00:38:19,680 --> 00:38:22,439 Speaker 1: We'd love to hear from you. We're on Twitter, I'm 778 00:38:22,680 --> 00:38:26,440 Speaker 1: at Joel Webber Show. He's at Eric Ball Tunits. You 779 00:38:26,520 --> 00:38:29,640 Speaker 1: can find Dave Nodding at Dave Nodded in A d 780 00:38:29,840 --> 00:38:33,719 Speaker 1: I G, Tom Leiden at Tom Leiden L Y d 781 00:38:33,880 --> 00:38:37,800 Speaker 1: O N, and Todd At at Todd c f R. A. 782 00:38:39,360 --> 00:38:43,040 Speaker 1: Trillions is produced by Magnus Hendrickson. Francesca Levie is the 783 00:38:43,080 --> 00:38:44,520 Speaker 1: head of Bloomberg Podcast