WEBVTT - The Future According to ETF Pros 0:00:05.920 --> 0:00:06.640 Welcome to Trains. 0:00:06.640 --> 0:00:15.360 I'm Joel Webber and I'm Eric Belchunas. 0:00:11.920 --> 0:00:14.400 Eric April has been a little zany markets all over 0:00:14.440 --> 0:00:17.360 the place. Before Libration Day. You went to Vegas for 0:00:17.400 --> 0:00:19.759 the Exchange conference. First time it's been there, and we 0:00:19.840 --> 0:00:21.920 do a thing every time you do a little roadshow 0:00:22.079 --> 0:00:24.840 and go to a conference like this, you speak to people, 0:00:24.960 --> 0:00:28.800 bring a mic, get the vibes of the conference. What 0:00:28.880 --> 0:00:31.280 was the high level takeaway from the industry. 0:00:31.840 --> 0:00:33.400 Yeah, I mean, I think it was great. They did 0:00:33.400 --> 0:00:34.960 a good job. You know, it is hard to pull 0:00:34.960 --> 0:00:38.160 off these conferences. This is my fifteenth year going Joel, 0:00:38.440 --> 0:00:40.760 believe it or not, so I feel like I'm a 0:00:40.880 --> 0:00:44.199 veteran status. I know. The first year I went, it 0:00:44.240 --> 0:00:46.639 was in Hollywood, Florida, which I kind of dug. Hollywood 0:00:46.720 --> 0:00:50.479 is like a near Fort Lauderdale. It's kind of not 0:00:50.640 --> 0:00:53.239 a place you'd expect a big financial conference. And at 0:00:53.240 --> 0:00:55.040 the time, I was in data and the hedge fund 0:00:55.080 --> 0:00:59.120 analyst was going to Vegas to see salt and it's salt. 0:00:59.160 --> 0:01:02.280 You had like these really high profile speakers like Barack 0:01:02.280 --> 0:01:05.600 Obama and Kobe Bryant and stuff. And I remember the 0:01:05.600 --> 0:01:07.880 first ETF event, I went to in Hollywood, Florida. There 0:01:07.880 --> 0:01:10.479 was a YouTube cover band in ice Cream Social and 0:01:10.640 --> 0:01:13.959 I thought, I found my people, Joel. I like that better. 0:01:14.319 --> 0:01:17.640 So over the years we went there to Hollywood maybe 0:01:18.080 --> 0:01:20.679 nine ten years. Then they moved to Miami for three 0:01:20.800 --> 0:01:23.600 four years. Now they've moved to Vegas for the first year. 0:01:24.280 --> 0:01:26.200 So at the end of the day, the ETF is 0:01:26.240 --> 0:01:29.520 the star. The people were there. That's really ninety percent 0:01:29.560 --> 0:01:31.520 of the battle. I also like a place where you 0:01:31.560 --> 0:01:33.000 can wake up and take a jog in the morning 0:01:33.000 --> 0:01:36.120 and it's warm outside this check that box. It was 0:01:36.160 --> 0:01:38.880 a dry heat, but it got a little hot towards 0:01:38.880 --> 0:01:41.280 the afternoon, but it was fine to me. I mean, 0:01:41.280 --> 0:01:43.000 I'm not a huge gambler, so I was not really 0:01:43.040 --> 0:01:44.880 moved either way. I do remember one time I walked 0:01:44.880 --> 0:01:48.200 out downstairs at about six thirty am on Monday. That's 0:01:48.240 --> 0:01:50.320 probably the most sober time of the week, would you agree, 0:01:50.640 --> 0:01:53.360 And you walked through the casino and there's like n 0:01:54.000 --> 0:01:57.560 and Elos Don't Bring Me Down is blasting, and I'm 0:01:57.640 --> 0:01:59.760 just like, that's like a Saturday night two in the 0:01:59.760 --> 0:02:02.880 morning song played Monday morning at six thirty am. That's 0:02:02.880 --> 0:02:06.480 the alternative universe. I got a little dose of in 0:02:06.560 --> 0:02:09.680 between working the hallways, but I give it good grades. 0:02:09.720 --> 0:02:11.560 I thought it was fine and I got a lot done. 0:02:11.680 --> 0:02:14.480 Okay, so you brought your mic. We've got some highlights. 0:02:14.600 --> 0:02:17.840 You're gonna walk me through your time in Vegas. I 0:02:17.919 --> 0:02:26.040 am this time on Trillions Exchange. Okay, who we got first? 0:02:26.200 --> 0:02:28.680 I figure we start on the Vegas topic, right. So 0:02:28.720 --> 0:02:31.959 here's Todd Rosenbluth, one of the organizers of the event 0:02:32.000 --> 0:02:36.720 from Vetaphi friend of the show. Here he is on Vegas. 0:02:37.040 --> 0:02:40.760 I have not donated any money to the casino. I 0:02:40.800 --> 0:02:44.919 watched Michigan win its basketball game from the sportsbook. I 0:02:45.000 --> 0:02:47.440 might have been the only person there watching the game 0:02:47.720 --> 0:02:50.520 that didn't have anything on theline other than passion and pride, 0:02:50.680 --> 0:02:52.520 and Michigan won. They're in this Sweet sixteen. 0:02:52.600 --> 0:02:54.080 Now, good for you. 0:02:54.520 --> 0:02:57.840 First of all, Michigan has since lost. Yes, okay, there's that, 0:02:58.080 --> 0:02:59.960 so we can all have a nice laugh about that. 0:03:00.440 --> 0:03:02.600 But the question I asked him if he had gambled 0:03:02.600 --> 0:03:03.600 that was if you didn't catch that? 0:03:03.720 --> 0:03:06.720 I got it curious the vetefy, I feel like this 0:03:06.800 --> 0:03:10.919 is a vetify exchange conference, right, So, so, how busy 0:03:11.000 --> 0:03:12.800 was Todd while you while you were there. 0:03:13.200 --> 0:03:15.280 There was one time, well I was on in a 0:03:15.360 --> 0:03:18.880 podcast with him and his colleague was saying how she 0:03:18.960 --> 0:03:21.320 wanted she had to limit the number of espressos he 0:03:21.360 --> 0:03:23.560 had every day because he was started. So one time 0:03:23.600 --> 0:03:25.280 I saw him walking towards me and he was just 0:03:25.360 --> 0:03:27.960 like he was jacked wired, and I was like, no 0:03:27.960 --> 0:03:30.480 more espressos, Todd. So, yeah, he had a lot going on. 0:03:30.760 --> 0:03:33.040 I've been in that position. It's not easy. It's an 0:03:33.080 --> 0:03:36.760 unsung job because people get a complain if something goes wrong, 0:03:36.800 --> 0:03:39.840 but if everything's fine, no one says anything. So I 0:03:39.880 --> 0:03:43.120 feel for him. He did great though. Okay, next here's 0:03:43.120 --> 0:03:46.040 Todd also on the point of the conference of what 0:03:46.080 --> 0:03:47.200 he's hoping to achieve. 0:03:47.360 --> 0:03:49.240 The conference is going great. I mean we were talking 0:03:49.360 --> 0:03:52.760 on the first full day, but Sunday was great. We 0:03:52.760 --> 0:03:55.920 did the ETF education. Your colleague James was on with 0:03:55.960 --> 0:03:59.400 a couple other panels, a packed room of financial advisors. 0:03:59.760 --> 0:04:05.080 We did session just today on advisors sentiment, what advisors 0:04:05.120 --> 0:04:08.280 told us a vertify, and then the ETF implications. There's 0:04:08.360 --> 0:04:11.080 a lot of asset managers here, a lot of advisors here. 0:04:11.120 --> 0:04:12.680 It's a great buzz here in Vegas. 0:04:13.000 --> 0:04:17.159 Well, here we are in Vegas for a conference, and yeah, great, 0:04:17.279 --> 0:04:19.760 great vibes, great vibes everywhere. 0:04:19.920 --> 0:04:22.479 I mean, the heart of the conference started as a 0:04:22.520 --> 0:04:25.599 way to educate advisors on ETF's. Advisors have like forty 0:04:25.640 --> 0:04:29.200 trillion dollars. They are the biggest consumer of ETFs out there. 0:04:29.720 --> 0:04:31.520 So the goal of the conference is to get them in. 0:04:31.640 --> 0:04:31.880 Yeah. 0:04:32.080 --> 0:04:34.080 You know how you ever go to a bar and 0:04:34.120 --> 0:04:36.840 it's like, you know, twenty dollars cover, but like ladies 0:04:36.839 --> 0:04:37.440 get in for free. 0:04:37.560 --> 0:04:38.760 Yeah, oh, things like college. 0:04:38.920 --> 0:04:41.599 Yeah that was but yeah, exactly, that's what this is. Like, 0:04:41.640 --> 0:04:44.440 I think advisors it's a very minimal fee. The issuers 0:04:44.440 --> 0:04:47.560 pay more, and that's the idea. So there was a 0:04:47.600 --> 0:04:50.160 mix of advisors. James did the educational part. I usually 0:04:50.240 --> 0:04:52.960 do it. I couldn't get there on Sunday. James Safer 0:04:53.200 --> 0:04:56.000 James Safer and uh yeah, so that's the heart of 0:04:56.120 --> 0:04:59.840 the conference. Okay, Next, next we have our own Katie 0:05:00.000 --> 0:05:03.680 I Felt Oh Katielberg News all right, So here she 0:05:03.800 --> 0:05:07.120 is on what she thought was the big topic of 0:05:07.160 --> 0:05:07.799 the conference. 0:05:08.440 --> 0:05:10.920 Well, it's really funny that the big story this year 0:05:11.000 --> 0:05:13.040 seems to be what was the big story last year? 0:05:13.240 --> 0:05:17.200 Multi share classes, and given the hype around it this year, 0:05:17.320 --> 0:05:19.719 and I don't know, maybe we're going to get it 0:05:20.080 --> 0:05:22.360 by the end of the third quarter or by the 0:05:22.480 --> 0:05:24.560 end of twenty twenty five. I don't know what we 0:05:24.560 --> 0:05:27.000 were so excited about this time last year. But it 0:05:27.040 --> 0:05:30.080 continues to be the hot topic. And what would it 0:05:30.160 --> 0:05:34.160 mean if a thousand or so is ETFs were introduced. 0:05:34.680 --> 0:05:36.400 We've touched on this a couple of times, I think, 0:05:36.400 --> 0:05:39.400 but like, is it still percolating? Is it really a 0:05:39.440 --> 0:05:40.040 hot topic? 0:05:40.640 --> 0:05:42.960 Yeah, So I would take a little issue with the 0:05:42.960 --> 0:05:44.640 second year in a row because I thought last year 0:05:44.680 --> 0:05:48.640 Crypto was probably superseded it, but it was on people's 0:05:48.680 --> 0:05:52.680 minds last year. What happened was the acting chair of 0:05:52.720 --> 0:05:56.240 the SEC before Atkins gets in, Mark Ayuda, a little 0:05:56.240 --> 0:06:00.520 while ago, said that the ETF share classes were priority. 0:06:00.520 --> 0:06:02.479 And the reason this is important is that think about 0:06:02.480 --> 0:06:04.239 all the mutual funds out there right there's like seven 0:06:04.360 --> 0:06:08.320 hundred mutual fund companies. There's like seven thousand mutual funds, 0:06:09.000 --> 0:06:11.479 and this would allow these funds to just bolt on 0:06:11.520 --> 0:06:14.320 an ETF share class to the actual mutual fund rather 0:06:14.360 --> 0:06:18.200 than launching a different like clone that's an ETF so 0:06:18.320 --> 0:06:22.000 Vanguard has this patent right now, but it the patent 0:06:22.040 --> 0:06:24.120 was up last year, so not anybody can do it. 0:06:24.120 --> 0:06:27.680 And we have fifty one mutual funds that have filed 0:06:27.680 --> 0:06:30.760 to do this. And at one of the of events 0:06:30.800 --> 0:06:32.800 early I mean one of the panels early on, I 0:06:32.800 --> 0:06:36.599 think it was Sunday, there was a lawyer round table 0:06:37.000 --> 0:06:39.280 and one of them said it was going to all 0:06:39.279 --> 0:06:42.080 happen by the summer. So the idea of this was 0:06:42.120 --> 0:06:44.240 supposed to be like, oh, in the next couple of years, 0:06:44.839 --> 0:06:48.080 but what we're hearing is that's going to come way sooner. 0:06:48.440 --> 0:06:51.200 So when Katie said a thousand ETF, she's not lying. 0:06:51.720 --> 0:06:54.080 Imagine if all the mutual funds could just immediately come 0:06:54.160 --> 0:06:57.479 up with an ETF share class you're looking at, you know, 0:06:57.800 --> 0:06:59.560 just an avalanche of new ETFs. 0:07:00.440 --> 0:07:03.680 Okay, she was right, it's going to be a thing. 0:07:03.720 --> 0:07:06.680 We'll be talking about more. Okay, who do you got next? 0:07:07.400 --> 0:07:10.040 Katie? One more time? On Vegas. I figure you'd like 0:07:10.080 --> 0:07:11.280 to hear what she had to say about that. 0:07:12.920 --> 0:07:15.360 It feels like there's a breach of trust here of 0:07:15.400 --> 0:07:17.640 like what happens in Vegas days in Vegas. Well, let's 0:07:17.680 --> 0:07:18.480 hear what she has to say. 0:07:18.600 --> 0:07:21.840 She told me she won one hundred and sixty dollars 0:07:22.080 --> 0:07:23.920 and then walked out of the casino, and I'm like, man, 0:07:23.920 --> 0:07:26.960 you have no degenerate gene in you, because that's how 0:07:27.000 --> 0:07:29.320 they get you. You win early and you're like, oh, 0:07:29.360 --> 0:07:31.480 I'm good at this, and then you leave with negative 0:07:31.520 --> 0:07:32.920 six hundred like Athenasios. 0:07:33.560 --> 0:07:34.880 Let's hear what Katie had to say. 0:07:36.040 --> 0:07:38.640 This is not a very pedestrian friendly city, which I 0:07:38.680 --> 0:07:41.080 don't think I was quite prepared for. I'm a big runner, 0:07:41.280 --> 0:07:43.440 so I've been going out to run in the morning 0:07:43.440 --> 0:07:46.440 and it just is bleak. Man, there is nowhere to run. 0:07:46.520 --> 0:07:50.480 It's all highway. That's the big difference that I've noticed. 0:07:50.520 --> 0:07:53.360 I will say it is a little strange to come 0:07:53.400 --> 0:07:56.080 back from the run and walk through a casino like 0:07:56.200 --> 0:07:58.720 in my sweaty clothes. But other than that, I mean, 0:07:58.760 --> 0:08:02.760 I think, like the actual hotel itself, the space flows 0:08:02.800 --> 0:08:05.920 really nicely. It's it's a little bit more cohesive. 0:08:06.480 --> 0:08:08.320 Yeah, there's a treadmill. I think you're supposed to go 0:08:08.400 --> 0:08:09.040 run on the treadmill. 0:08:09.200 --> 0:08:12.960 Well, apparently the gym was packed every morning, so I 0:08:13.000 --> 0:08:16.800 went outside too. Katie had discovered that UNLV is actually 0:08:16.800 --> 0:08:18.640 two blocks down and there's a nice soccer field to 0:08:18.720 --> 0:08:21.200 run around. But before she told me that, hint, I 0:08:21.240 --> 0:08:23.680 went the other way and you start running down these 0:08:23.720 --> 0:08:27.200 sidewalks and it's fine, but you come across these dudes 0:08:27.560 --> 0:08:29.120 who like look like they've just been up for a 0:08:29.120 --> 0:08:31.440 couple of weeks. Yeah, like feathery skin. 0:08:31.520 --> 0:08:32.120 It's Vegas. 0:08:32.240 --> 0:08:34.679 Yeah, and it's like you can see the underbelly of 0:08:34.760 --> 0:08:37.080 Vegas out he stands in the sun. 0:08:37.400 --> 0:08:38.040 You stand inside. 0:08:38.040 --> 0:08:48.120 That's what that's what, stay inside. Okay, next all right, 0:08:48.160 --> 0:08:51.120 Next up we have David Mann from Franklin. He oversees 0:08:51.160 --> 0:08:54.760 their ETF business and he also commented on the ETF 0:08:54.760 --> 0:08:56.240 share class, which again big topic. 0:08:57.000 --> 0:08:58.959 Well, so it's an act of filing. So we are 0:08:59.120 --> 0:09:00.800 you know, only only so much we can say. And 0:09:00.840 --> 0:09:03.400 I think they're what fifty other fifty one now is 0:09:03.640 --> 0:09:06.240 the official number. But yeah, internally, we are doing a 0:09:06.280 --> 0:09:07.840 lot of work to get ready for it. You know. 0:09:08.240 --> 0:09:12.880 One of the challenges is we had conversions as an option, 0:09:13.240 --> 0:09:17.040 we had launch a new differentiated strategy from scratch as 0:09:17.040 --> 0:09:19.200 an option, and now we've got door three. So we 0:09:19.240 --> 0:09:21.800 are certainly thinking through which which are the strategies we 0:09:21.800 --> 0:09:23.640 haven't done in those first two options that we might 0:09:23.679 --> 0:09:25.079 want to do in a share class. So we're having 0:09:25.080 --> 0:09:25.800 those conversations. 0:09:25.800 --> 0:09:28.720 Now, which strategy is going to win out? Do you think, Man, 0:09:28.760 --> 0:09:29.120 it's tough. 0:09:29.240 --> 0:09:32.240 That's a good question. And by the way that we 0:09:32.280 --> 0:09:36.839 call it, the three c's, clones, conversions or classes. Conversions 0:09:36.840 --> 0:09:40.640 have about eight hundred billion and clones probably in the 0:09:40.640 --> 0:09:43.640 same ballpark. Will the ETF share class have more than 0:09:43.679 --> 0:09:46.920 eight hundred billion? Yeah? Possibly, because if you bolt on 0:09:46.960 --> 0:09:49.560 an ETF share class and you allow investors to just 0:09:49.640 --> 0:09:53.160 move over with no tax consequences, well, whatn't you do that? 0:09:53.400 --> 0:09:56.040 Imagine having a huge CD collection and Spotify comes in 0:09:56.080 --> 0:09:59.720 and says I can get all this onto Spotify like 0:09:59.760 --> 0:10:03.280 in Heartbeat. You know, it's basically the same concept of 0:10:03.720 --> 0:10:07.240 making this move to the more desirable format just easier 0:10:07.559 --> 0:10:11.520 and less costly. It should result in a ton of 0:10:11.559 --> 0:10:15.800 money coming over. Vanguard was the test case, and over 0:10:15.880 --> 0:10:18.240 the sort of twenty years of that patent, we've seen 0:10:18.240 --> 0:10:19.800 a lot of people move over from the mutual fund 0:10:19.840 --> 0:10:24.240 of the ETF. So if that's you know, a precedent, 0:10:24.800 --> 0:10:26.840 look for both products and flows. 0:10:27.520 --> 0:10:30.160 So what will mutual funds look like? After this. 0:10:31.920 --> 0:10:33.480 I mean, they're always going to survive. 0:10:33.559 --> 0:10:33.720 You know. 0:10:33.960 --> 0:10:36.079 I was just walking down you know, tenth Street in 0:10:36.160 --> 0:10:39.760 Philly on Sunday and this bookshop had like CDs for 0:10:39.800 --> 0:10:43.800 sale on the sidewalk. It'll be like that except you know, 0:10:44.320 --> 0:10:45.080 fun vehicles. 0:10:45.920 --> 0:10:46.199 Bleak. 0:10:47.000 --> 0:10:48.880 I mean, would you buy a mutual fund right now? 0:10:49.200 --> 0:10:51.880 I mean unless see four and K. Yeah, you're right, okay, 0:10:52.120 --> 0:10:55.000 I mean in the four yeah, four and K I 0:10:55.000 --> 0:10:57.800 would say, you know, is a place where the money 0:10:57.800 --> 0:11:00.240 will come in, probably because ETFs lose a lot of 0:11:00.240 --> 0:11:03.280 superpowers inside of four one K. But like I said, 0:11:03.400 --> 0:11:05.960 they'll exist, They'll be around. It's going to take a 0:11:05.960 --> 0:11:09.280 long time, but all of the new money, all of 0:11:09.320 --> 0:11:11.679 the new cash will likely go to the ETF format. 0:11:12.120 --> 0:11:12.440 Okay. 0:11:12.440 --> 0:11:16.439 Next, here's David Man of Franklin, who is the only 0:11:16.520 --> 0:11:20.600 person who has seen me play tennis. I wanted you 0:11:20.679 --> 0:11:21.320 to hear him. 0:11:21.400 --> 0:11:25.440 Okay, talk about professional and then personal. Okay, let's hear it. 0:11:25.679 --> 0:11:28.240 You're the only person in this whole industry who has 0:11:28.840 --> 0:11:31.960 seen me play tennis. We played against each other. You 0:11:32.000 --> 0:11:33.880 played a Columbia. You're a what if we'd call a 0:11:33.920 --> 0:11:37.440 five to zero, which is the highest ranking for I 0:11:37.440 --> 0:11:40.440 would call it like a somebody who doesn't play professionally. 0:11:42.800 --> 0:11:43.839 Joel's listening right now. 0:11:43.840 --> 0:11:45.600 How would you rate my game? 0:11:45.840 --> 0:11:51.000 Okay? Lots of potential. Okay, the the the part we 0:11:51.040 --> 0:11:52.480 need to work on. So the next time you come 0:11:52.520 --> 0:11:57.280 out the backhand so still it's it's you know, as 0:11:57.280 --> 0:12:00.120 you start, because as you keep getting better, you be 0:12:00.120 --> 0:12:01.920 playing against better players, and the better players are going 0:12:01.960 --> 0:12:04.440 to identify your weakest shot and that's where they're going 0:12:04.440 --> 0:12:05.559 to pick on. So as soon as we get through 0:12:05.559 --> 0:12:08.839 your backhand cleaned up, watch out, you'll be a five 0:12:08.840 --> 0:12:09.640 to zero no time. 0:12:10.320 --> 0:12:12.280 I don't know about no time, But if you don't 0:12:12.320 --> 0:12:14.280 have a backhand, I know where I'm handling the ball, 0:12:14.320 --> 0:12:17.199 and I have a good backhand, So let's play. 0:12:17.920 --> 0:12:20.160 I got really good advice since I played him, which 0:12:20.200 --> 0:12:22.760 is when you do a two handed backhand, you're really 0:12:22.840 --> 0:12:26.720 it's a left handed forehand. Okay, and that really changes everything. 0:12:26.920 --> 0:12:27.880 I've gotten better already. 0:12:27.920 --> 0:12:29.599 I'd love to play with you, but this guy, you know, 0:12:29.640 --> 0:12:31.640 the one handed backhand is way more graceful. 0:12:31.920 --> 0:12:34.360 It is, it looks cooler, it's just harder. It's a 0:12:34.400 --> 0:12:37.280 lot more I have. You have one hander. Wow, let's 0:12:37.280 --> 0:12:39.120 play I'm down. Let's do it. 0:12:39.440 --> 0:12:40.920 David could be on my team, and then you can 0:12:40.960 --> 0:12:43.160 find whoever else you want and we'll play doubles. 0:12:43.440 --> 0:12:47.080 Okay, next, Okay, we have Elizabeth Kashner of fact Set, 0:12:47.520 --> 0:12:51.600 famous ETF analysts, been in the industry forever, and here 0:12:51.679 --> 0:12:53.680 she is again on the ETF shirt class. Again. I 0:12:53.679 --> 0:12:54.800 bring this up because. 0:12:54.920 --> 0:12:56.720 There's a theme. Yeah, there's a theme. 0:12:56.840 --> 0:12:59.319 It was the themes that. 0:12:59.679 --> 0:13:04.120 Puts idea expands to products that are perhaps not index 0:13:04.200 --> 0:13:07.160 oriented or to shops that may not be fully ready 0:13:07.160 --> 0:13:10.600 for all of the logistics. I think we might see 0:13:10.640 --> 0:13:13.360 some bumps along the road to get there. Like we 0:13:13.440 --> 0:13:17.560 have to remember that all of the ETF record keeping 0:13:17.640 --> 0:13:20.280 happens at the brokerage level, whereas for the mutual fund 0:13:20.280 --> 0:13:23.320 it happens at the asset manager level. Vanguard has been 0:13:23.320 --> 0:13:26.640 able to pull this off because they have a brokerage, right, 0:13:26.760 --> 0:13:30.319 but not every asset manager does, and so it can 0:13:30.360 --> 0:13:32.119 be a little bit more difficult. 0:13:32.760 --> 0:13:34.760 This is a good point, right. 0:13:34.600 --> 0:13:38.360 Because Vanguard really seems like they were in the driver's 0:13:38.360 --> 0:13:38.840 seat for this. 0:13:39.640 --> 0:13:41.040 Well, yeah, they invented. 0:13:41.080 --> 0:13:44.000 Nobody benefits as much as Vanguard does. 0:13:44.720 --> 0:13:44.920 Right. 0:13:45.960 --> 0:13:47.880 When I wrote my Bogel book. I went and talked 0:13:47.920 --> 0:13:51.880 to Gus Souder. He's the guy who launched VANGUARDDTF business 0:13:51.920 --> 0:13:53.320 member Bogle didn't want it, so he had to go 0:13:53.360 --> 0:13:56.360 against the founder's wishes. And while they were launching it, 0:13:56.400 --> 0:13:57.959 they thought, hey, why don't we make the ETF a 0:13:58.000 --> 0:14:00.720 share class. The reason they want to do it back then, 0:14:00.760 --> 0:14:03.520 in like the early two thousands was that this way 0:14:03.600 --> 0:14:06.839 that the buy and hold money would be protected from 0:14:06.880 --> 0:14:08.839 the short term money. So if you wanted to come 0:14:08.840 --> 0:14:10.720 in and out of their treasury mutual fund or whatever, 0:14:10.840 --> 0:14:13.319 you could just buy the ETF. If you wanted to 0:14:13.320 --> 0:14:15.160 buy and hold, you could buy the mutual fund and 0:14:15.200 --> 0:14:17.320 just stay there. Now, over the years people found out 0:14:17.360 --> 0:14:19.280 you can actually just buy and hold an ETF, but 0:14:19.320 --> 0:14:21.760 at the time that was the goal, so they made 0:14:21.800 --> 0:14:23.480 a patent on it and it actually worked. Now, the 0:14:23.520 --> 0:14:25.560 one thing is Vanguard does have a brokerage. You need 0:14:25.600 --> 0:14:27.840 a brokerage platform to buy an ETF. So what if 0:14:27.840 --> 0:14:30.000 you're a mutual fund company that doesn't have a platform. 0:14:30.240 --> 0:14:32.120 You're going to have to get people over to some 0:14:32.560 --> 0:14:35.200 like Schwab or something. That could be tricky. But the 0:14:35.240 --> 0:14:37.360 amount of money, the amount of lawyers, and the amount 0:14:37.360 --> 0:14:40.680 of companies involved. They're going to figure this out. There's 0:14:40.840 --> 0:14:44.320 all these problems are solvable, but they are interesting. The 0:14:44.360 --> 0:14:47.160 other thing is Vanguard is an interesting model because they 0:14:47.200 --> 0:14:50.040 only see inflows. So Vanguard's model is when you see 0:14:50.080 --> 0:14:52.120 inflows all the time. What about a company that does 0:14:52.120 --> 0:14:55.160 this but sees outflows regularly? Will the ETF get hit 0:14:55.200 --> 0:14:57.600 with capital gains? We like, we call it tax contagion. 0:14:57.920 --> 0:15:01.040 These are some unanswered questions. So if I'm going to bet, 0:15:01.080 --> 0:15:03.560 I'd say the over undraw on us covering this in 0:15:03.600 --> 0:15:06.040 the next like eighteen months is probably like four. I 0:15:06.080 --> 0:15:07.640 think this issue is going to come up and be 0:15:07.720 --> 0:15:08.960 big and worth covering a lot. 0:15:09.000 --> 0:15:10.479 Okay, all right, next. 0:15:10.440 --> 0:15:13.040 Next, Okay, I would say the second biggest issue of 0:15:13.080 --> 0:15:16.280 the conference was private credit and private equity being put into. 0:15:16.120 --> 0:15:17.440 The ETF wrapper private markets. 0:15:17.480 --> 0:15:20.880 Let's go private assets. Yeah, and we just heard recently 0:15:20.920 --> 0:15:22.880 Larry Fink has come out and said he wants to 0:15:22.920 --> 0:15:26.760 augetize private Vanguard has met with Carlisle Group in Blackstone. 0:15:27.000 --> 0:15:29.880 This is happening, So how do you get it? What 0:15:29.920 --> 0:15:33.440 do you do? Here's Elizabeth Kashner on the ETFs holding 0:15:33.480 --> 0:15:34.600 some of this private assets. 0:15:35.320 --> 0:15:37.960 I think We're going to find out a lot when 0:15:37.960 --> 0:15:41.320 we get a reversal in the credit markets. Right, as 0:15:41.360 --> 0:15:43.960 long as things are calm, as long as there's not 0:15:44.080 --> 0:15:49.960 many redemptions, then you know, then the issue is primarily pricing, 0:15:50.480 --> 0:15:53.280 and can you rely on the price that you're getting 0:15:53.400 --> 0:15:56.440 on a day to day or even month to month basis. 0:15:57.240 --> 0:16:00.520 That's a question mark. Right when you have real only 0:16:00.760 --> 0:16:04.240 one bidder and that's also the entity that sold it 0:16:04.280 --> 0:16:06.960 to you, you know there's a spread in there. You 0:16:07.080 --> 0:16:09.040 just don't really know how big it is, nor do 0:16:09.120 --> 0:16:10.600 you know how deep the market is. 0:16:11.760 --> 0:16:14.200 She's got a lot to say. We should probably invite 0:16:14.200 --> 0:16:14.400 her on. 0:16:15.040 --> 0:16:18.600 Yeah, she is very smart and we actually talked for 0:16:18.600 --> 0:16:21.000 about a half an hour before I even recorded her. 0:16:21.560 --> 0:16:24.040 So what she's saying is that when you have something 0:16:24.080 --> 0:16:27.440 that's like less liquid and ETF a good if the 0:16:27.480 --> 0:16:30.760 markets are fine and things are going pretty well, that's 0:16:30.800 --> 0:16:32.720 it's easy to say, Okay, I think this was a 0:16:32.800 --> 0:16:35.480 fine idea. But when there's a huge sell off, you 0:16:35.520 --> 0:16:38.760 sort of you can see the illiquidity form. Now there's 0:16:38.760 --> 0:16:41.400 been junk bonds put in ETF's high old muni bonds 0:16:41.520 --> 0:16:44.760 really had problems in the COVID cell off, so hyd 0:16:44.960 --> 0:16:47.680 had a twenty nine percent discount on some days. I 0:16:47.680 --> 0:16:49.920 mean that is massive. So I do think there's a 0:16:50.080 --> 0:16:53.720 history of you know, experimenting, but I do think sell 0:16:53.760 --> 0:16:56.280 offs when you see some of this come to fruition. 0:16:56.440 --> 0:16:59.680 So I do think it's fine. ETF investors are used 0:16:59.680 --> 0:17:01.960 to having funds that have less liquid stuff in them, 0:17:02.000 --> 0:17:05.520 even during selloffs. But she has a good point. This 0:17:05.680 --> 0:17:08.560 is part of the you know, debate on whether you 0:17:08.600 --> 0:17:11.600 should put something less liquid into what is a super 0:17:11.640 --> 0:17:16.160 liquid vehicle, and this debate will keep happening for ever. 0:17:16.280 --> 0:17:18.479 I think we're all going to be watching this closely 0:17:18.560 --> 0:17:21.320 and like, you know, looking for that thing where everybody 0:17:21.359 --> 0:17:22.639 will point to it and go I told you so, 0:17:22.880 --> 0:17:24.639 or or maybe the other way too. 0:17:24.720 --> 0:17:28.520 But okay, next, So next up, we have Tyler Williams 0:17:28.560 --> 0:17:31.840 of Nate Texas. This guy is I love this guy. 0:17:31.880 --> 0:17:33.800 Every time I bumpendo and we have a fun conversation. 0:17:34.200 --> 0:17:36.520 He kind of reminds me of Kieran Culkin the actor 0:17:37.119 --> 0:17:39.360 when you hear him. He even kind of looks like him, 0:17:39.640 --> 0:17:41.639 and he kind of sounds like him. But he's a 0:17:42.040 --> 0:17:43.800 has a lot of personality. So I thought I would 0:17:43.800 --> 0:17:46.560 ask him a little about working the booth. So here's 0:17:46.600 --> 0:17:49.120 a guy standing at a booth all day, and what's 0:17:49.200 --> 0:17:51.240 he doing? How does he get people to come over? 0:17:52.000 --> 0:17:53.080 Here's what he had to say about that. 0:17:53.920 --> 0:17:56.000 Yeah, well, let me start the giveaways. I guess we've 0:17:56.040 --> 0:17:59.760 got a pickleball raffle here for advisors for dropping their 0:17:59.760 --> 0:18:02.439 base cars and they win this nice in the Texas 0:18:02.520 --> 0:18:06.560 pickleball set, which is a popular sport these days. Sure, 0:18:06.640 --> 0:18:10.040 we got our cups, and we had a tide pen 0:18:10.119 --> 0:18:12.880 there for folks that maybe spill their coffee on themselves. 0:18:12.880 --> 0:18:15.679 But yeah, and then for other handaways, you got our 0:18:15.720 --> 0:18:16.960 fact sheets and our brochure. 0:18:17.040 --> 0:18:18.080 But will say the. 0:18:18.080 --> 0:18:21.280 Paper route hasn't you know, been maybe as popular as 0:18:21.280 --> 0:18:23.159 it once was, but we still have it here. You 0:18:23.320 --> 0:18:27.360 certain advisors need to take some literature with them. But yeah, 0:18:27.400 --> 0:18:30.680 other than that, boot duty is it's kind of a 0:18:31.080 --> 0:18:32.800 you know, it's a hit or miss. Sometimes you get 0:18:32.800 --> 0:18:35.320 some advisors interested in your products. Other advisors that haven't 0:18:35.320 --> 0:18:36.679 heard of us. You got to give them kind of 0:18:36.720 --> 0:18:39.479 the one thousand feet view of who the Texas is. 0:18:39.880 --> 0:18:42.359