1 00:00:06,160 --> 00:00:08,920 Speaker 1: Well carew brilliance. I'm Joel Weber and I'm Eric Belchiernis. 2 00:00:12,520 --> 00:00:15,600 Speaker 1: I was in London recently, Eric, and one thing I've 3 00:00:16,239 --> 00:00:18,880 Speaker 1: learned about being in London is that you're kind of 4 00:00:18,880 --> 00:00:21,720 Speaker 1: a superman in the ETF space, but you have sidekicks. 5 00:00:22,200 --> 00:00:24,040 Speaker 1: And one of them has been on the show a 6 00:00:24,079 --> 00:00:29,080 Speaker 1: couple of times. Tom Sarah Vegas. He's relocated to London recently. Yeah, 7 00:00:29,120 --> 00:00:31,880 Speaker 1: he's like, he's like a Miniu but over there. Yeah, 8 00:00:31,920 --> 00:00:35,279 Speaker 1: effectively Robin to your batman, I guess. So you know, 9 00:00:35,440 --> 00:00:38,839 Speaker 1: I think Tom is his own man. He's much more 10 00:00:38,880 --> 00:00:42,040 Speaker 1: of an expert in smart beta and multi factor research 11 00:00:42,080 --> 00:00:44,360 Speaker 1: than I am. For sure, he's our smart beta expert. 12 00:00:44,800 --> 00:00:46,800 Speaker 1: But the reason he went to London. He was here 13 00:00:46,920 --> 00:00:49,840 Speaker 1: for a full year, and we kept getting the same 14 00:00:50,640 --> 00:00:54,959 Speaker 1: reply from clients, I love this data set on the library, 15 00:00:55,080 --> 00:00:56,960 Speaker 1: or I love this note, but can you do it 16 00:00:57,040 --> 00:00:59,640 Speaker 1: for Europe? But can you do it for Europe? But 17 00:00:59,720 --> 00:01:01,200 Speaker 1: can you do it for Europe? And we got this 18 00:01:01,280 --> 00:01:04,280 Speaker 1: so many times that we thought, Okay, we should just 19 00:01:04,319 --> 00:01:07,559 Speaker 1: do it for Europe. And Tom is being sent there 20 00:01:07,560 --> 00:01:10,200 Speaker 1: to do it for Europe. So I went to the 21 00:01:10,240 --> 00:01:13,919 Speaker 1: pub with him bottom a pint. We have an incredible office, 22 00:01:13,959 --> 00:01:16,200 Speaker 1: this little pub around the corner. We took him there 23 00:01:17,000 --> 00:01:19,320 Speaker 1: and started kicking some stuff around with him, and we 24 00:01:19,440 --> 00:01:21,520 Speaker 1: just started talking about e t F s in Europe, 25 00:01:21,560 --> 00:01:24,399 Speaker 1: and I thought this would actually be a really good episode. 26 00:01:24,480 --> 00:01:26,600 Speaker 1: And he happens to be back in New York now 27 00:01:27,160 --> 00:01:30,040 Speaker 1: on like a spring break, I guess, And we said, 28 00:01:30,080 --> 00:01:31,440 Speaker 1: why don't why don't we talk to him about what 29 00:01:31,440 --> 00:01:34,560 Speaker 1: he's learned in the little baptism he's had in Europe. Yeah, 30 00:01:34,640 --> 00:01:36,480 Speaker 1: I think it's good to think global sometimes. The t 31 00:01:36,720 --> 00:01:39,119 Speaker 1: F they trade and I think last time I checked 32 00:01:39,120 --> 00:01:42,840 Speaker 1: seventy exchanges around the world. Europe is the second biggest 33 00:01:42,880 --> 00:01:46,120 Speaker 1: area after the United States. But it is different, and 34 00:01:46,160 --> 00:01:49,600 Speaker 1: the culture is different, the regulations are different, and kind 35 00:01:49,600 --> 00:01:51,400 Speaker 1: of it was a it's a good excuse to get 36 00:01:51,440 --> 00:01:55,720 Speaker 1: some perspective on how investors in another country do it 37 00:01:55,760 --> 00:01:59,520 Speaker 1: and some similarities and differences. The US is somewhat spoiled 38 00:02:00,040 --> 00:02:01,880 Speaker 1: because it's just the US over there. There's all these 39 00:02:01,880 --> 00:02:05,400 Speaker 1: different countries, They've got different currencies. We sometimes referred to 40 00:02:05,440 --> 00:02:07,440 Speaker 1: it as the Wild West in terms of trying to 41 00:02:07,520 --> 00:02:12,280 Speaker 1: tame that beast, which is all these different uh like legacy. Uh, 42 00:02:12,440 --> 00:02:15,480 Speaker 1: situations that make it hard to just do certain things 43 00:02:15,480 --> 00:02:17,839 Speaker 1: that are easy in the US, and so Tom has 44 00:02:17,880 --> 00:02:20,560 Speaker 1: his work cut out for him. Okay, So joining us 45 00:02:20,560 --> 00:02:23,679 Speaker 1: on this episode of Trillions, Tom Saraphagus, an analyst with 46 00:02:23,720 --> 00:02:30,080 Speaker 1: Bloomberg Intelligence. This WEEKND Trillions, five surprising things about the 47 00:02:30,120 --> 00:02:36,240 Speaker 1: European et F markets. Tom, Welcome back to Trilliance. Can 48 00:02:36,280 --> 00:02:41,880 Speaker 1: you say your first name again? Last name Sara Hagus? Okay, 49 00:02:42,000 --> 00:02:44,160 Speaker 1: it's I have a much easier time in Europe getting 50 00:02:44,560 --> 00:02:47,120 Speaker 1: by with that name. He's our version of the Greek freak. 51 00:02:47,880 --> 00:02:50,000 Speaker 1: It's just a basketball player for those who don't know 52 00:02:50,040 --> 00:02:53,160 Speaker 1: from the other Bucks with a crazy Greek leame. So, Tom, 53 00:02:53,240 --> 00:02:56,240 Speaker 1: how do you like London so far? It's great. Yeah, 54 00:02:56,320 --> 00:02:58,799 Speaker 1: it's it's going great. I've always uh, you know, I've 55 00:02:58,800 --> 00:03:01,160 Speaker 1: been to London before, so you know, before I decided 56 00:03:01,200 --> 00:03:02,800 Speaker 1: to go, I had to make sure I like the city. 57 00:03:02,880 --> 00:03:04,840 Speaker 1: So it's sort of just like a cleaner version of 58 00:03:04,919 --> 00:03:07,320 Speaker 1: New York, a little bit of a slower pace. But 59 00:03:07,600 --> 00:03:10,040 Speaker 1: so far, so good. And talk to me about what 60 00:03:10,080 --> 00:03:13,600 Speaker 1: you've learned since you've been there. So I think Eric's 61 00:03:13,639 --> 00:03:15,680 Speaker 1: sort of like alluded to it in the intro with 62 00:03:15,760 --> 00:03:19,160 Speaker 1: the t F market, I meant life like it's much 63 00:03:19,200 --> 00:03:23,760 Speaker 1: slower paced. Uh, And they take their holidays very seriously 64 00:03:24,000 --> 00:03:26,840 Speaker 1: and they're called holidays. Yeah, they are called holidays, And 65 00:03:26,919 --> 00:03:30,120 Speaker 1: apartments are called flats. The elevators to lift, so you 66 00:03:30,160 --> 00:03:31,680 Speaker 1: sort of have to get used to it. You know. 67 00:03:31,800 --> 00:03:35,320 Speaker 1: It's like English technology. So that is actually a perfect 68 00:03:35,320 --> 00:03:37,720 Speaker 1: transition into E T S. Right, So what's it like 69 00:03:37,800 --> 00:03:41,160 Speaker 1: over there? So I would say overall, it's the same 70 00:03:41,200 --> 00:03:46,080 Speaker 1: but different, right, and so can we end the podcast 71 00:03:46,080 --> 00:03:50,600 Speaker 1: there is that it? So overall, Um, you know, they 72 00:03:50,600 --> 00:03:52,920 Speaker 1: do want to be like the US, but um, some 73 00:03:52,960 --> 00:03:54,720 Speaker 1: things that are kind of alluded to, they're just they're 74 00:03:54,720 --> 00:03:56,880 Speaker 1: not there yet there, you know. I think the biggest 75 00:03:56,920 --> 00:03:59,200 Speaker 1: thing is we call it Europe, right, but when you 76 00:03:59,240 --> 00:04:02,320 Speaker 1: think about it, it's all these regional markets all put together. 77 00:04:02,360 --> 00:04:04,640 Speaker 1: They're all very different, to have different mentalities, they have 78 00:04:04,640 --> 00:04:08,200 Speaker 1: different investor bases. There's a lot of fragmentation in Europe. 79 00:04:08,560 --> 00:04:10,920 Speaker 1: So I think as they move sort of trying to 80 00:04:10,920 --> 00:04:13,440 Speaker 1: be more centralized, the market is going to grow faster. 81 00:04:13,560 --> 00:04:15,680 Speaker 1: But um, they really want to grow. I think they 82 00:04:15,960 --> 00:04:18,320 Speaker 1: It's sort of why we even decided to put an 83 00:04:18,320 --> 00:04:21,159 Speaker 1: analyst age because they asked for for content. They're like, 84 00:04:21,200 --> 00:04:24,960 Speaker 1: we really want more help into helping figure out this market. Um, 85 00:04:25,000 --> 00:04:26,680 Speaker 1: which is why we're in the position that we're in. 86 00:04:26,760 --> 00:04:28,880 Speaker 1: So UM, I think it's gonna keep continuing to grow, 87 00:04:29,640 --> 00:04:32,039 Speaker 1: not to say it doesn't have its own hurdles, but okay, 88 00:04:32,080 --> 00:04:35,640 Speaker 1: so you brought with you something like five mind blowing facts. 89 00:04:36,400 --> 00:04:38,360 Speaker 1: Are they gonna blow my mind and Eric's mind or 90 00:04:38,400 --> 00:04:41,440 Speaker 1: just mine? I'm gonna pretend my mind is blow. I 91 00:04:41,560 --> 00:04:44,000 Speaker 1: probably know these, but I when I first saw them, 92 00:04:44,000 --> 00:04:46,920 Speaker 1: my mind was blown. So I'll go back to that 93 00:04:47,080 --> 00:04:50,520 Speaker 1: feeling of not knowing. I think some Eric might know, 94 00:04:51,560 --> 00:04:55,560 Speaker 1: but definitely some Eric might know. Um, I think any 95 00:04:55,560 --> 00:04:57,240 Speaker 1: of the et F nerds listening are going to be 96 00:04:57,600 --> 00:04:59,360 Speaker 1: blown away. But there's some other ones that I think 97 00:04:59,440 --> 00:05:01,839 Speaker 1: Eric didn't know about. Drop your hammer. So let's start 98 00:05:01,880 --> 00:05:03,800 Speaker 1: with the first one. Um, there are actually way more 99 00:05:03,839 --> 00:05:05,280 Speaker 1: e t F s in Europe than there are in 100 00:05:05,320 --> 00:05:07,800 Speaker 1: the U. S is about almost three thousand in Europe. 101 00:05:07,800 --> 00:05:11,680 Speaker 1: There's only about in the US. But asset wise, we're 102 00:05:11,680 --> 00:05:14,279 Speaker 1: at three point six trillion here less than a trillion 103 00:05:14,360 --> 00:05:17,240 Speaker 1: in Europe, right, so way more products, much fewer assets. 104 00:05:17,279 --> 00:05:18,680 Speaker 1: And that goes back to the the thing I was talking 105 00:05:18,680 --> 00:05:22,279 Speaker 1: about fragmentation, right, So if you are so, what you 106 00:05:22,360 --> 00:05:25,279 Speaker 1: end up finding here is we have three smpts, but 107 00:05:25,320 --> 00:05:28,880 Speaker 1: in Europe you have like fifty stock six et s, right, 108 00:05:29,040 --> 00:05:31,640 Speaker 1: because of all that fragmentation. So if you are an 109 00:05:31,720 --> 00:05:33,880 Speaker 1: issue er launching a product in the UK, you're going 110 00:05:33,960 --> 00:05:36,520 Speaker 1: to launch a similar product in France and Germany xcess. 111 00:05:36,560 --> 00:05:38,440 Speaker 1: You end up having a lot of these copycat products, 112 00:05:38,640 --> 00:05:40,320 Speaker 1: and because of that, you end up having a lot 113 00:05:40,400 --> 00:05:43,400 Speaker 1: more products out there, but the assets so when you 114 00:05:43,440 --> 00:05:46,200 Speaker 1: sort of look at assets per product, it's much less 115 00:05:46,240 --> 00:05:49,360 Speaker 1: in Europe. So literally it will be the same et 116 00:05:49,520 --> 00:05:53,480 Speaker 1: F but listed on different exchanges yep, and like different exchanges. 117 00:05:53,520 --> 00:05:56,120 Speaker 1: And also the thing that we are not used to 118 00:05:56,160 --> 00:05:58,280 Speaker 1: here in the US their share classes there, right, So 119 00:05:58,640 --> 00:06:00,160 Speaker 1: if you buy an e t F to paysitive, then 120 00:06:00,480 --> 00:06:03,000 Speaker 1: you're getting that dividend and Europe you get to pick 121 00:06:03,080 --> 00:06:04,719 Speaker 1: that I want the dividend do I want the dividend 122 00:06:04,760 --> 00:06:07,640 Speaker 1: being reinvested. So there's all these nuances that you don't 123 00:06:08,080 --> 00:06:10,880 Speaker 1: um sort of appreciate being a US invest So that's 124 00:06:10,920 --> 00:06:14,040 Speaker 1: interesting because I think there's a little behavioral economics in there, 125 00:06:14,040 --> 00:06:16,200 Speaker 1: which is when you have too much choice. Maybe it's 126 00:06:16,200 --> 00:06:18,839 Speaker 1: a bad thing. And when you talk about all those 127 00:06:18,839 --> 00:06:22,000 Speaker 1: different products, are we talking about if you are are 128 00:06:22,000 --> 00:06:24,479 Speaker 1: you are they cross list thing on all these different 129 00:06:24,480 --> 00:06:27,120 Speaker 1: exchanges or do they actually go to that country domicile 130 00:06:27,200 --> 00:06:29,160 Speaker 1: and come out with a fresh new product in that country. No, 131 00:06:29,400 --> 00:06:31,640 Speaker 1: So what it will be is um. There's also issuers 132 00:06:31,640 --> 00:06:34,279 Speaker 1: in all different countries. Right, So there's DWS right, which 133 00:06:34,279 --> 00:06:37,640 Speaker 1: is German, There's I Shares, there's the French issues, so 134 00:06:37,640 --> 00:06:38,960 Speaker 1: a lot of them. What they do is okay, So 135 00:06:39,000 --> 00:06:41,239 Speaker 1: like French clients are gonna buy from the French issues, 136 00:06:41,360 --> 00:06:43,320 Speaker 1: So the French companies are going to launch the you know, 137 00:06:43,400 --> 00:06:46,240 Speaker 1: the the broad bench mark e TS DWUS is gonna 138 00:06:46,279 --> 00:06:49,200 Speaker 1: launch this broad market et F, I Shares, Vanguard, etcetera. 139 00:06:49,240 --> 00:06:50,760 Speaker 1: So you end up having a lot of the same 140 00:06:50,760 --> 00:06:54,760 Speaker 1: products just launched them the different respective markets. Um. And 141 00:06:54,800 --> 00:06:56,880 Speaker 1: then on the cross listings. That's one thing too. But 142 00:06:56,880 --> 00:06:59,720 Speaker 1: there's also different share classes which we don't have here 143 00:06:59,760 --> 00:07:01,360 Speaker 1: in the U. S. That's a that's a very new 144 00:07:01,400 --> 00:07:03,480 Speaker 1: thing for anyone who's sort of been trained in the 145 00:07:03,600 --> 00:07:05,640 Speaker 1: US and going over to Europe. Uh. And they also 146 00:07:05,680 --> 00:07:07,440 Speaker 1: have different currencies. Again, I think we don't really have 147 00:07:07,480 --> 00:07:09,840 Speaker 1: to deal with here. So there's a lot more decisions 148 00:07:09,840 --> 00:07:11,840 Speaker 1: that go into buying an et F there do I 149 00:07:11,880 --> 00:07:14,080 Speaker 1: want this? Do I want the dividends? And what currency 150 00:07:14,280 --> 00:07:16,440 Speaker 1: I want? A currency hedge? And then what currency the frank, 151 00:07:16,560 --> 00:07:19,200 Speaker 1: the Euro, the pound. Right, So there's all these decisions 152 00:07:19,240 --> 00:07:21,880 Speaker 1: that go into buying an ETF that we don't that 153 00:07:21,960 --> 00:07:25,200 Speaker 1: we're not necessarily used to here. Okay, so related what 154 00:07:25,240 --> 00:07:28,000 Speaker 1: are people investing in if they're not investing in ETFs 155 00:07:28,440 --> 00:07:30,880 Speaker 1: active mutual funds? So like here again, the whole the 156 00:07:31,000 --> 00:07:34,160 Speaker 1: big battle there is sort of active active mutual funds 157 00:07:34,240 --> 00:07:37,680 Speaker 1: versus et s UM And then a new piece of 158 00:07:37,040 --> 00:07:39,840 Speaker 1: of of regulation went into effect last year which is 159 00:07:39,840 --> 00:07:41,800 Speaker 1: MYFED two, and that was really trying to shine the 160 00:07:41,920 --> 00:07:44,760 Speaker 1: light on the cost of active. Right, active funds are 161 00:07:44,840 --> 00:07:47,040 Speaker 1: much more expensive. Research plays a big part in that 162 00:07:47,160 --> 00:07:49,280 Speaker 1: it does, and the unbeldoding of research and ETFs just 163 00:07:49,560 --> 00:07:51,640 Speaker 1: naturally are going to be the beneficiary of that. Right 164 00:07:51,680 --> 00:07:55,080 Speaker 1: as there's more scrutiny on costs and that comes the light, uh, 165 00:07:55,160 --> 00:07:56,760 Speaker 1: and there's sort of trying to get away from the 166 00:07:56,760 --> 00:07:59,040 Speaker 1: commission based models which have been really big in Europe. 167 00:07:59,320 --> 00:08:02,040 Speaker 1: Et f are just naturally gonna do we just pause there? 168 00:08:02,120 --> 00:08:04,400 Speaker 1: This is major to me. This is the biggest catalyst 169 00:08:04,440 --> 00:08:06,000 Speaker 1: for et F growth in the U S, which is 170 00:08:06,320 --> 00:08:08,880 Speaker 1: the shift away from the commission model. So all these 171 00:08:08,920 --> 00:08:11,640 Speaker 1: wealth managers and advisors were getting paid by the mutual fund. 172 00:08:12,160 --> 00:08:14,840 Speaker 1: It's kind of like a kickback, and that's what determined 173 00:08:15,080 --> 00:08:18,000 Speaker 1: whether you were in this fund or that fund. That 174 00:08:18,560 --> 00:08:21,640 Speaker 1: it's dying and the new form is fee based, which 175 00:08:21,760 --> 00:08:24,720 Speaker 1: essentially just means the advisor gets a percent of the 176 00:08:24,800 --> 00:08:28,440 Speaker 1: client's assets. And once they're getting a percentage of that pie, 177 00:08:29,080 --> 00:08:31,840 Speaker 1: of course they're motivated to pick cheap stuff because now 178 00:08:31,880 --> 00:08:34,880 Speaker 1: it's coming out of their money too. If if in 179 00:08:34,920 --> 00:08:36,760 Speaker 1: the US we are saying, I don't know in the 180 00:08:36,880 --> 00:08:39,640 Speaker 1: sixth inning of that move, some people may debate that, 181 00:08:39,679 --> 00:08:41,640 Speaker 1: but let's just say we're in the sixth inning. Where 182 00:08:41,679 --> 00:08:44,760 Speaker 1: are we in Europe from the broker the commission broker 183 00:08:44,840 --> 00:08:46,840 Speaker 1: model to the fee based model. Sure, I would say 184 00:08:46,880 --> 00:08:49,760 Speaker 1: we're probably late first inning because if it just went 185 00:08:49,800 --> 00:08:52,360 Speaker 1: into effect last year, right, so it's just all of 186 00:08:52,520 --> 00:08:55,400 Speaker 1: now bringing on that, shedding that light on it. And 187 00:08:55,480 --> 00:08:57,920 Speaker 1: when these things passed, it's never perfect right from the 188 00:08:57,960 --> 00:08:59,960 Speaker 1: get go. It's like Okay, we're gonna pass this regulation 189 00:09:00,000 --> 00:09:01,959 Speaker 1: and it's going to be perfect. They're still sort of 190 00:09:02,000 --> 00:09:04,480 Speaker 1: the industry still started, still trying to figure it out. 191 00:09:04,760 --> 00:09:07,839 Speaker 1: So it's still very early innings in Europe on sort 192 00:09:07,880 --> 00:09:11,599 Speaker 1: of that transition over there. And culturally are people a 193 00:09:11,679 --> 00:09:16,360 Speaker 1: little less okay, paying more in Europe? Because in the 194 00:09:16,640 --> 00:09:19,839 Speaker 1: in the US, whether it's Amazon or E t F 195 00:09:20,000 --> 00:09:23,720 Speaker 1: or Vanguard, whatever, people are pretty We're like professional consumers. 196 00:09:24,120 --> 00:09:27,520 Speaker 1: We are a consumer culture and we're very sensitive to cost. 197 00:09:27,880 --> 00:09:31,559 Speaker 1: We will go to the to me. Yeah, So are 198 00:09:31,640 --> 00:09:34,400 Speaker 1: they that intense over there when it comes to that culturally, 199 00:09:34,559 --> 00:09:37,040 Speaker 1: I would say no. And it's even this goes back 200 00:09:37,120 --> 00:09:39,160 Speaker 1: to the distribution. The way it's handled in Europe is 201 00:09:39,240 --> 00:09:41,720 Speaker 1: you go to your bank, right in your bank handles everything. 202 00:09:41,840 --> 00:09:43,640 Speaker 1: So I have my mortgage in my savings account on 203 00:09:43,640 --> 00:09:45,719 Speaker 1: my investment account at my bank, and I had that 204 00:09:45,800 --> 00:09:48,400 Speaker 1: because my dad had that. So when my dad passed 205 00:09:48,400 --> 00:09:49,920 Speaker 1: to the account to me, I'm not moving it because 206 00:09:49,920 --> 00:09:52,959 Speaker 1: it's convenient. It's there already, know the advisor. They're charging 207 00:09:53,000 --> 00:09:55,199 Speaker 1: me whatever they're charging me, and they're putting me in 208 00:09:55,320 --> 00:09:59,200 Speaker 1: their active funds. So yeah, there is this huge uh, 209 00:10:00,040 --> 00:10:02,079 Speaker 1: the cost obsession isn't as big in Europe, and we 210 00:10:02,120 --> 00:10:04,839 Speaker 1: actually see it in the flows. And I've studied this 211 00:10:05,440 --> 00:10:08,440 Speaker 1: um here. Right. If et F cuts its feed by 212 00:10:08,440 --> 00:10:11,319 Speaker 1: basis point, everyone sort of shifts over in Europe. It's 213 00:10:11,400 --> 00:10:14,120 Speaker 1: just not that obsessive on costs. Yeah. I think as 214 00:10:14,240 --> 00:10:17,720 Speaker 1: more education comes and there's more more the regulation gets 215 00:10:17,840 --> 00:10:20,280 Speaker 1: put to the to the forefront, it'll the obsession I 216 00:10:20,320 --> 00:10:22,400 Speaker 1: think will start to because like the land before time, 217 00:10:23,000 --> 00:10:26,760 Speaker 1: you know, it's like twenty years ago, we'll get there. 218 00:10:33,120 --> 00:10:35,520 Speaker 1: All right, My mind is not blown, but you know 219 00:10:35,600 --> 00:10:40,360 Speaker 1: I've got you've impressed me. There you go, uh fact 220 00:10:40,360 --> 00:10:42,559 Speaker 1: to a number two Okay, I think this one is 221 00:10:42,600 --> 00:10:45,760 Speaker 1: an interesting one, and it's on Vanguard, right, So they 222 00:10:46,000 --> 00:10:48,839 Speaker 1: you cannot talk about the the industry here and not 223 00:10:48,920 --> 00:10:51,160 Speaker 1: bring a vanguard. They are such a big powerhouse here, 224 00:10:51,200 --> 00:10:53,959 Speaker 1: they're sucking up all the floats, they're changing the advisor 225 00:10:54,040 --> 00:10:57,280 Speaker 1: model everything. Here in Europe they don't have that same 226 00:10:57,480 --> 00:11:00,280 Speaker 1: sort of No one really knows who Vanguard is, right, 227 00:11:00,320 --> 00:11:02,839 Speaker 1: So the number two issue where here they're like number 228 00:11:02,920 --> 00:11:06,559 Speaker 1: six in Europe. They have markets here only four percent 229 00:11:06,600 --> 00:11:09,160 Speaker 1: in Europe. So what I think is really interesting is 230 00:11:09,200 --> 00:11:11,319 Speaker 1: that here Vangard doesn't really have to do anything, like 231 00:11:11,440 --> 00:11:13,800 Speaker 1: everyone knows their Vanger. They're cheap and all the money's 232 00:11:13,800 --> 00:11:16,000 Speaker 1: flowing to them. In Europe, they sort of have to 233 00:11:16,240 --> 00:11:18,719 Speaker 1: go out and promote themselves like, hey, we're Vanguard, this 234 00:11:18,840 --> 00:11:20,640 Speaker 1: is what we're doing. Uh, you know, we do each 235 00:11:21,160 --> 00:11:26,120 Speaker 1: We're kind of a big deal. We're from Pennsylvania. So 236 00:11:26,280 --> 00:11:28,160 Speaker 1: I think it's really interesting that you sort of see 237 00:11:28,200 --> 00:11:30,559 Speaker 1: them not in the top tier firm. They're sort of 238 00:11:30,600 --> 00:11:32,160 Speaker 1: like in the second tier and they actually have to 239 00:11:32,240 --> 00:11:34,520 Speaker 1: like hustle and work and like sort of do all 240 00:11:34,559 --> 00:11:37,040 Speaker 1: the work that the other firms have to compete with 241 00:11:37,120 --> 00:11:38,840 Speaker 1: them here in the US. So they've that role sort 242 00:11:38,840 --> 00:11:41,679 Speaker 1: of reversed in Europe for them if they're six, right, 243 00:11:41,920 --> 00:11:45,480 Speaker 1: Uh black Rock is where what are they? Black Rock 244 00:11:45,600 --> 00:11:48,200 Speaker 1: is one? So so it's not like a U S thing. 245 00:11:48,280 --> 00:11:50,679 Speaker 1: It's just they were late going there. Maybe they were late, 246 00:11:50,760 --> 00:11:53,240 Speaker 1: and but they are sort of what we've seen here 247 00:11:53,280 --> 00:11:55,599 Speaker 1: with like JP Morgan being really aggressive. I see that 248 00:11:55,640 --> 00:11:57,760 Speaker 1: with Vanguard over there, like they're opening the opening up 249 00:11:57,800 --> 00:12:00,599 Speaker 1: new offices, they're really building out their sales teams, so 250 00:12:00,600 --> 00:12:02,520 Speaker 1: they're really sort of in ramp up mode. When I 251 00:12:02,559 --> 00:12:04,280 Speaker 1: feel like here the sort of just sitting back and 252 00:12:04,640 --> 00:12:07,000 Speaker 1: sort of just collecting all the money. The fisher jumping 253 00:12:07,000 --> 00:12:08,920 Speaker 1: in the boat here. Yeah, exactly. Yeah, they've taken like 254 00:12:09,000 --> 00:12:13,640 Speaker 1: a little over a billion a day here. How quickly 255 00:12:14,000 --> 00:12:17,240 Speaker 1: have they risen in the ranks? Though, they're rising very quickly. 256 00:12:17,400 --> 00:12:20,280 Speaker 1: I think every issuer has their eye on them because 257 00:12:20,320 --> 00:12:23,920 Speaker 1: they've seen the success they've had here. Um, And it's interesting. 258 00:12:23,920 --> 00:12:26,160 Speaker 1: They're not the cheapest ones out there in Europe. There 259 00:12:26,160 --> 00:12:28,240 Speaker 1: are other firms that are cheaper than they are, but 260 00:12:28,400 --> 00:12:29,760 Speaker 1: all the E t f s are there. You can 261 00:12:29,840 --> 00:12:31,559 Speaker 1: quind of see them like starting to warm up, like 262 00:12:31,640 --> 00:12:33,480 Speaker 1: they sort of like the picture of the bullpen, like 263 00:12:33,520 --> 00:12:35,520 Speaker 1: they're starting to warm up and everyone's starting to watch 264 00:12:35,600 --> 00:12:38,440 Speaker 1: them because they have seen what they've done here. Um, 265 00:12:38,559 --> 00:12:40,840 Speaker 1: and they're you know, they're they've been really aggressive with hirings. 266 00:12:40,920 --> 00:12:43,439 Speaker 1: So what's the football? Mon the four? It's like he's 267 00:12:43,480 --> 00:12:47,760 Speaker 1: got the the like the kicker starts like exactly into 268 00:12:47,800 --> 00:12:49,520 Speaker 1: the net thing. By the way, have you picked a 269 00:12:49,559 --> 00:12:52,480 Speaker 1: team yet? A club? Sorry? So I've always liked the 270 00:12:52,800 --> 00:12:54,840 Speaker 1: Hot Spurs from a long time ago. Now they're good 271 00:12:54,880 --> 00:12:56,839 Speaker 1: and everyone accusing me that I like them now, But 272 00:12:58,160 --> 00:13:03,000 Speaker 1: we're talking is the soccer because not the San Antonio Alright, 273 00:13:03,200 --> 00:13:08,480 Speaker 1: So I'm actually startled that Vanguard is that sort of 274 00:13:08,840 --> 00:13:11,679 Speaker 1: you know, up and coming over in Europe? Blow my 275 00:13:11,720 --> 00:13:15,840 Speaker 1: mind with another fact, okay, um, retail investors, right, they 276 00:13:15,920 --> 00:13:18,079 Speaker 1: have been really the ones that have been behind a 277 00:13:18,120 --> 00:13:19,720 Speaker 1: lot of the growth here in the US. So if 278 00:13:19,760 --> 00:13:22,560 Speaker 1: you sort of look between retail and institutional, it's about 279 00:13:22,559 --> 00:13:25,480 Speaker 1: a fifty fifty split here, it's very small in Europe. 280 00:13:25,480 --> 00:13:29,120 Speaker 1: It's only about in Europe it's really small. Um. And 281 00:13:29,200 --> 00:13:32,680 Speaker 1: again that comes back to the the commission model, right, 282 00:13:32,720 --> 00:13:35,160 Speaker 1: because everything is at your bank. Your bank's handling everything. 283 00:13:35,520 --> 00:13:37,360 Speaker 1: They're on the commission model, so they're putting you in 284 00:13:37,480 --> 00:13:40,199 Speaker 1: mutual funds. I'm gonna put out a theory. Is this 285 00:13:40,360 --> 00:13:45,199 Speaker 1: because everyone's taxed at a higher rate in Europe and 286 00:13:45,280 --> 00:13:47,640 Speaker 1: therefore they don't have as much disposable income to just 287 00:13:47,760 --> 00:13:50,360 Speaker 1: do their own investing. On the side, I think it 288 00:13:50,440 --> 00:13:52,080 Speaker 1: goes back to the that could be it, but also 289 00:13:52,120 --> 00:13:54,720 Speaker 1: the convenience factor, Like it's just the mentality is very 290 00:13:54,800 --> 00:13:57,000 Speaker 1: different there. So here, you start a job, what's the 291 00:13:57,000 --> 00:13:58,320 Speaker 1: first thing you do? You felt your four O one 292 00:13:58,360 --> 00:14:00,199 Speaker 1: K form, right, and you're sort of like have you 293 00:14:00,280 --> 00:14:02,520 Speaker 1: on I RA. In Europe it's different. They don't sort 294 00:14:02,559 --> 00:14:05,040 Speaker 1: of have this do it yourself like investing culture as 295 00:14:05,120 --> 00:14:08,160 Speaker 1: much as we do here. So retail just hasn't really adopted. 296 00:14:08,200 --> 00:14:12,880 Speaker 1: It is fast, but you know they don't. And by 297 00:14:12,920 --> 00:14:15,920 Speaker 1: the way, by retail, we mean advisors and do it 298 00:14:16,000 --> 00:14:19,400 Speaker 1: yourself retail correct That is stunning. In the US, I 299 00:14:19,480 --> 00:14:22,960 Speaker 1: think that number is probably more like and it's eleven 300 00:14:23,040 --> 00:14:25,840 Speaker 1: percent there. I mean retails were the majority of the 301 00:14:25,840 --> 00:14:28,960 Speaker 1: flows come and advisors institutions use them, but more to 302 00:14:29,000 --> 00:14:31,560 Speaker 1: trade and adjust their portfolio. It's more like for liquidity. 303 00:14:32,320 --> 00:14:35,080 Speaker 1: That is stunning, And I think it does speak to 304 00:14:35,200 --> 00:14:40,280 Speaker 1: that incentive. If the middleman is incentivized to get the 305 00:14:40,400 --> 00:14:42,480 Speaker 1: kick back from the mutual fund and they get paid 306 00:14:42,560 --> 00:14:45,160 Speaker 1: more that way, why on earth would they move to 307 00:14:45,200 --> 00:14:47,000 Speaker 1: an e t F for something that doesn't pay them. 308 00:14:47,880 --> 00:14:51,400 Speaker 1: And this is part of what happened here. But now 309 00:14:51,800 --> 00:14:54,560 Speaker 1: I think people actually look for the fee base model, 310 00:14:54,600 --> 00:14:58,160 Speaker 1: which some people are will use fiduciary. That's the big 311 00:14:58,240 --> 00:15:00,840 Speaker 1: word that's used here for that mode, which is acting 312 00:15:00,880 --> 00:15:03,960 Speaker 1: in your client's best interests. So it sounds like fiduciary 313 00:15:04,520 --> 00:15:07,000 Speaker 1: is not a big deal over there, so I don't 314 00:15:07,040 --> 00:15:08,320 Speaker 1: want to be clear. And this goes back when we 315 00:15:08,360 --> 00:15:11,160 Speaker 1: say Europe, right, so some countries have moved away from 316 00:15:11,160 --> 00:15:13,480 Speaker 1: that commission model, so like the UK, like the Netherlands 317 00:15:13,520 --> 00:15:15,680 Speaker 1: have sort of banned that, but other countries haven't. Right 318 00:15:15,840 --> 00:15:18,040 Speaker 1: this this goes back to the nuance and the fragmentation 319 00:15:18,120 --> 00:15:20,720 Speaker 1: in Europe. So yeah, you might see UK might have 320 00:15:20,800 --> 00:15:23,080 Speaker 1: a bigger chunk of retail and advisors than they do 321 00:15:23,560 --> 00:15:26,360 Speaker 1: in other in other countries too. So I think as 322 00:15:26,400 --> 00:15:29,600 Speaker 1: it gets more centralized and more that models adapted across 323 00:15:29,680 --> 00:15:32,400 Speaker 1: Europe will eventually see it. But for now it's really 324 00:15:32,480 --> 00:15:35,760 Speaker 1: mostly institutional, like it's for for tactical moves or or 325 00:15:35,960 --> 00:15:39,600 Speaker 1: like positions a big portfolio. I was over there and 326 00:15:39,680 --> 00:15:41,440 Speaker 1: I met with initial I won't say who, but I was. 327 00:15:42,040 --> 00:15:45,400 Speaker 1: I was, you know, naive, I guess, and they pointed 328 00:15:45,400 --> 00:15:48,480 Speaker 1: out they said, they said, here's what people are paying 329 00:15:48,960 --> 00:15:52,360 Speaker 1: for for everything, their advisor fee. I'll add it up. 330 00:15:52,920 --> 00:15:56,120 Speaker 1: It came to like six to eight percent. You know, 331 00:15:56,200 --> 00:15:58,040 Speaker 1: that's the fund fee, which is like two percent, then 332 00:15:58,080 --> 00:16:01,200 Speaker 1: the advisor fee and then the the loads. You start 333 00:16:01,200 --> 00:16:05,000 Speaker 1: adding it up, it was like six um here, you know, 334 00:16:05,080 --> 00:16:07,560 Speaker 1: you might pay one percent for your advisor and then 335 00:16:07,680 --> 00:16:11,560 Speaker 1: twenty basis points for your funds. So this is dead's 336 00:16:11,600 --> 00:16:14,840 Speaker 1: a large difference, and I think this is probably what 337 00:16:14,960 --> 00:16:17,440 Speaker 1: a lot of the U S issuers. As this market 338 00:16:17,520 --> 00:16:21,640 Speaker 1: here gets so competitive on price, they're seeing opportunity there 339 00:16:22,160 --> 00:16:24,160 Speaker 1: and that's why you see not just Vanguard, but other 340 00:16:24,320 --> 00:16:27,280 Speaker 1: US companies go over there to try to sort of 341 00:16:27,400 --> 00:16:32,080 Speaker 1: be first. As that model moves, they'll be there with 342 00:16:32,200 --> 00:16:34,960 Speaker 1: the products totally. Can probably squeeze a little bit more 343 00:16:35,080 --> 00:16:37,040 Speaker 1: in Europe yet before all that, because we're starting to 344 00:16:37,080 --> 00:16:39,560 Speaker 1: see really cheap products start to launch now. But they're 345 00:16:39,600 --> 00:16:42,040 Speaker 1: just launching now right, so I think there's still a 346 00:16:42,080 --> 00:16:43,400 Speaker 1: little bit of room for them to be able to 347 00:16:43,520 --> 00:16:45,200 Speaker 1: make make a little bit of money there. And all 348 00:16:45,240 --> 00:16:46,760 Speaker 1: that you actual said, all the U S shuares are 349 00:16:46,800 --> 00:16:49,560 Speaker 1: over there now either they started up their own teams 350 00:16:49,600 --> 00:16:51,360 Speaker 1: there or they bought someone to already have some of 351 00:16:51,360 --> 00:16:54,400 Speaker 1: the infrastructure in place. Okay, I want you to turn 352 00:16:54,440 --> 00:16:58,680 Speaker 1: out the volume. Give me something big. I think this 353 00:16:58,760 --> 00:17:01,120 Speaker 1: one's big, and it's not specifically for et s, but 354 00:17:01,160 --> 00:17:03,040 Speaker 1: I think it's going to bring it full circle. And 355 00:17:03,120 --> 00:17:07,679 Speaker 1: it's sort of like this this policing on closet indexing. Right. 356 00:17:07,800 --> 00:17:10,280 Speaker 1: So what that means is there are funds out there 357 00:17:10,359 --> 00:17:12,480 Speaker 1: that that charge a lot more than say a cheap 358 00:17:12,520 --> 00:17:14,959 Speaker 1: etf but they don't look any different than the benchmark. Right. 359 00:17:15,520 --> 00:17:17,680 Speaker 1: So in the UK they got really strict on this 360 00:17:17,920 --> 00:17:19,720 Speaker 1: and they basically went in and said, Okay, we're gonna 361 00:17:19,720 --> 00:17:21,240 Speaker 1: look at all the funds and if you are just 362 00:17:21,359 --> 00:17:24,680 Speaker 1: a closet indexer, we are going to flag you and 363 00:17:24,840 --> 00:17:27,200 Speaker 1: we're going to make you pay back some of the 364 00:17:27,280 --> 00:17:30,640 Speaker 1: fees to investors. Right. So last year thirty four million 365 00:17:30,680 --> 00:17:33,119 Speaker 1: dollars and fees actually went back to investors. This is 366 00:17:33,160 --> 00:17:35,679 Speaker 1: actually a big deal. This is people are looking at 367 00:17:35,720 --> 00:17:38,320 Speaker 1: portfolios and being like, you're actually not doing what you're 368 00:17:38,320 --> 00:17:40,919 Speaker 1: saying you're doing exactly. So they basically looked at um 369 00:17:41,000 --> 00:17:43,240 Speaker 1: a bunch of things, basically are you giving the value 370 00:17:43,240 --> 00:17:44,920 Speaker 1: that you're saying that you're doing. So it's basically a 371 00:17:45,040 --> 00:17:49,000 Speaker 1: mix of qualitative data that they did balso like quantitative. 372 00:17:49,040 --> 00:17:50,919 Speaker 1: So they went in and said, okay, let's see your 373 00:17:50,920 --> 00:17:53,840 Speaker 1: marketing materials. How are you marketing this fund? Right? Are 374 00:17:53,880 --> 00:17:55,680 Speaker 1: you marketing is sort of like this active fund and 375 00:17:55,760 --> 00:18:00,119 Speaker 1: making all this Yes, exactly. In Europe, they're much more 376 00:18:00,119 --> 00:18:02,679 Speaker 1: aggressive about sort of honing in on these closet indexers here, 377 00:18:02,720 --> 00:18:04,440 Speaker 1: I feel like incess sort of no. They'll look and 378 00:18:04,480 --> 00:18:05,960 Speaker 1: they say, hey, this is the closet nex I'm gonna 379 00:18:06,000 --> 00:18:09,120 Speaker 1: move my my funds there. There's a lot of scrutiny. 380 00:18:09,240 --> 00:18:12,120 Speaker 1: And what's eventually going to happen is you have ETFs 381 00:18:12,160 --> 00:18:14,160 Speaker 1: on one side, you have the closet indexers in the middle. 382 00:18:14,320 --> 00:18:16,160 Speaker 1: Then you're sort of like the high active sture active. 383 00:18:16,480 --> 00:18:18,800 Speaker 1: They're basically coming in the middle and splitting it right there, 384 00:18:18,800 --> 00:18:21,239 Speaker 1: gonna so naturally that split is gonna put a lot 385 00:18:21,280 --> 00:18:24,920 Speaker 1: of money back into ETFs in Europe. So this is fascinating. 386 00:18:25,000 --> 00:18:27,440 Speaker 1: I called the closet indexing police. Whenever I post this 387 00:18:27,480 --> 00:18:30,639 Speaker 1: on Twitter, everybody usually has a negative reaction. They're like, 388 00:18:30,720 --> 00:18:32,960 Speaker 1: don't you know you can't police this stuff? Um, but 389 00:18:33,040 --> 00:18:34,920 Speaker 1: I see what Europe is doing. In the US, I 390 00:18:35,040 --> 00:18:38,480 Speaker 1: think a lot of this happens naturally. People have gone, 391 00:18:38,600 --> 00:18:41,680 Speaker 1: like we call the trend going from closet indexing to 392 00:18:41,840 --> 00:18:44,520 Speaker 1: actual indexing. That's why if you look at the Fidelity 393 00:18:44,560 --> 00:18:47,720 Speaker 1: Magellan where a lot of these big old traditional active 394 00:18:47,760 --> 00:18:50,400 Speaker 1: equity funds, the holdings look a lot like the SMP fire, 395 00:18:51,160 --> 00:18:52,680 Speaker 1: and a lot of people are those are the funds 396 00:18:52,680 --> 00:18:54,520 Speaker 1: they're leaving. Why pay one percent for that when you 397 00:18:54,600 --> 00:18:57,919 Speaker 1: get just about the same thing for five basis points um. 398 00:18:58,040 --> 00:19:00,679 Speaker 1: Again in Europe, maybe people aren't doing it is naturally 399 00:19:00,680 --> 00:19:02,600 Speaker 1: in the in the regular to trying to just push 400 00:19:02,680 --> 00:19:05,440 Speaker 1: this little Here's the issue though, and I've come to 401 00:19:05,520 --> 00:19:09,560 Speaker 1: feel a little sorry for the closet indexers because if 402 00:19:09,680 --> 00:19:12,000 Speaker 1: you if you take a lot of active bets and 403 00:19:12,040 --> 00:19:15,159 Speaker 1: a lot of active share, you will not sell as 404 00:19:15,240 --> 00:19:18,879 Speaker 1: much as the fund because it's the middlemen who don't 405 00:19:18,960 --> 00:19:22,520 Speaker 1: want anything to look that crazy on the statement. So 406 00:19:22,880 --> 00:19:27,359 Speaker 1: they actually it's because of advisors having career risk that 407 00:19:27,560 --> 00:19:31,520 Speaker 1: they don't want actual true active They may say they do, 408 00:19:31,680 --> 00:19:35,040 Speaker 1: but they actually want it close to the SNP. That way, 409 00:19:35,080 --> 00:19:37,240 Speaker 1: it doesn't in a bad year, it doesn't return much 410 00:19:37,280 --> 00:19:40,280 Speaker 1: worse than the SMP, and the client goes, oh my god, 411 00:19:40,280 --> 00:19:44,880 Speaker 1: why am I down? That's what I'm saying. So it's 412 00:19:44,920 --> 00:19:47,480 Speaker 1: the demand from the advisors that has the active mutual 413 00:19:47,560 --> 00:19:50,560 Speaker 1: funds here hugging the benchmark a little because they don't 414 00:19:50,560 --> 00:19:53,359 Speaker 1: want to get lose assets. This is what Peter Krauss 415 00:19:53,440 --> 00:19:55,440 Speaker 1: was saying. In our in our podcast with him a 416 00:19:55,480 --> 00:19:57,880 Speaker 1: couple months ago, he he hates this too. He thinks 417 00:19:57,920 --> 00:20:01,240 Speaker 1: this is just protecting your assets. Again, the advisors demand 418 00:20:01,520 --> 00:20:03,760 Speaker 1: is behind a lot of this, and they don't The 419 00:20:03,920 --> 00:20:06,159 Speaker 1: focus is always on the active mutual fund. But the 420 00:20:06,240 --> 00:20:09,040 Speaker 1: advisors are really the one asking for it because they 421 00:20:09,359 --> 00:20:11,560 Speaker 1: they may not want to buy to Vanguard funds in 422 00:20:11,600 --> 00:20:13,760 Speaker 1: call today because the client may go, why am I 423 00:20:13,840 --> 00:20:16,560 Speaker 1: paying you? So they want something that has like different 424 00:20:16,640 --> 00:20:19,560 Speaker 1: to it, but might have returns that are close to 425 00:20:19,680 --> 00:20:21,840 Speaker 1: the S and P so they don't look bad or 426 00:20:21,920 --> 00:20:26,200 Speaker 1: get fired. So in a way, closet indexing is by 427 00:20:26,480 --> 00:20:28,879 Speaker 1: you know, by design and by demand. It's if you 428 00:20:29,040 --> 00:20:31,679 Speaker 1: went to high active share, you would be more active 429 00:20:31,880 --> 00:20:34,000 Speaker 1: and you be truly active, but the client would have 430 00:20:34,080 --> 00:20:36,520 Speaker 1: to weather a bunch of down years and some real 431 00:20:36,600 --> 00:20:40,160 Speaker 1: steep drawouns because over you know, that's how true active goes. 432 00:20:40,240 --> 00:20:43,360 Speaker 1: You don't win every year doing a real true active strategy. 433 00:20:43,480 --> 00:20:46,280 Speaker 1: So I find this issue to be very complicated and 434 00:20:46,359 --> 00:20:48,720 Speaker 1: not as simple as like, oh, these active mutual funds 435 00:20:48,760 --> 00:20:52,640 Speaker 1: are really not doing their job. Um, it's all about 436 00:20:52,680 --> 00:20:56,200 Speaker 1: incentives and and keeping your job and keeping the assets. 437 00:20:56,520 --> 00:20:58,840 Speaker 1: And I think it's just the system that has created 438 00:20:58,880 --> 00:21:01,879 Speaker 1: all this. It up. Give me number five. Okay, so 439 00:21:02,000 --> 00:21:04,560 Speaker 1: this one is a little bit nerdy, but it's sort 440 00:21:04,600 --> 00:21:07,760 Speaker 1: of sometimes in Europe. I noticed some things that they're 441 00:21:07,840 --> 00:21:10,200 Speaker 1: much more advanced and other things in certain things and 442 00:21:10,720 --> 00:21:13,760 Speaker 1: much behind other things in the US. But here, and 443 00:21:13,840 --> 00:21:15,320 Speaker 1: I think this has come up a lot, especially for 444 00:21:15,359 --> 00:21:18,240 Speaker 1: small issuers. It's about payments to market makers, right, and 445 00:21:18,720 --> 00:21:20,280 Speaker 1: what happens in the U s. If you're a small 446 00:21:20,320 --> 00:21:22,239 Speaker 1: issue or with a new product that doesn't trade a lot, 447 00:21:22,480 --> 00:21:25,000 Speaker 1: you're at a disadvantage, right, no one's really buying your product. 448 00:21:25,320 --> 00:21:27,360 Speaker 1: Someone goes to buy it. They noticed spreads are tight 449 00:21:27,920 --> 00:21:30,760 Speaker 1: in Europe. You can actually incentivize the market maker to 450 00:21:30,880 --> 00:21:34,160 Speaker 1: come in and provide liquidity for that product. It's banned 451 00:21:34,200 --> 00:21:37,200 Speaker 1: in the US, but in Europe allows it, They do it, 452 00:21:37,280 --> 00:21:39,639 Speaker 1: They let you do that. Um I think it's interesting 453 00:21:39,680 --> 00:21:41,280 Speaker 1: that they do that because sort of a lot of 454 00:21:41,359 --> 00:21:44,280 Speaker 1: issuers here have been petitioning to have it done. Europe 455 00:21:44,320 --> 00:21:47,240 Speaker 1: has already been okay with that. Um So, I think 456 00:21:47,240 --> 00:21:50,040 Speaker 1: that's a huge difference in Europe. And what I think 457 00:21:50,080 --> 00:21:51,919 Speaker 1: that ultimately might do is a lot of the smaller 458 00:21:51,960 --> 00:21:54,240 Speaker 1: issuers are going to have sort of a better shot 459 00:21:54,320 --> 00:21:56,320 Speaker 1: at being able to raise some assets than in the US, 460 00:21:56,320 --> 00:21:59,520 Speaker 1: because it's really competitive being a small issuer going up 461 00:21:59,520 --> 00:22:01,959 Speaker 1: against some of the larger firms. Here um and oh, 462 00:22:02,080 --> 00:22:06,560 Speaker 1: here's the most important question. How do you pronounce s 463 00:22:06,800 --> 00:22:11,120 Speaker 1: M A R T hyphen b E T A. Well, 464 00:22:11,560 --> 00:22:13,680 Speaker 1: I'm going to pronounce it smart beta. Over there, you 465 00:22:13,720 --> 00:22:17,119 Speaker 1: have to pronounce it smart beta. Okay, that's when he 466 00:22:17,440 --> 00:22:20,920 Speaker 1: comes back, starts saying smart beta. He's coming right back. 467 00:22:20,960 --> 00:22:25,040 Speaker 1: Let's let's see how you're if he's still American? Ready, 468 00:22:25,680 --> 00:22:30,040 Speaker 1: can you say aluminum? Aluminum? Okay, not aluminium? Right, that's 469 00:22:30,119 --> 00:22:33,800 Speaker 1: next level. I mean that's like it's like then you 470 00:22:33,920 --> 00:22:36,760 Speaker 1: it's too late to ask him back. Yeah, Tom, thanks 471 00:22:36,760 --> 00:22:44,320 Speaker 1: for joining us in trillions, Thanks for having me, Thanks 472 00:22:44,359 --> 00:22:46,560 Speaker 1: for listening to trillions. Until next time. You can find 473 00:22:46,640 --> 00:22:50,760 Speaker 1: us in the Bloomberg terminal, Bloomberg dot com, Apple Podcast, Spotify, 474 00:22:51,119 --> 00:22:53,399 Speaker 1: and whatever else he likes to us. We'd love to 475 00:22:53,440 --> 00:22:56,880 Speaker 1: hear from you. We're on Twitter, I'm at Joel Webber Show, 476 00:22:57,440 --> 00:23:00,640 Speaker 1: He's at Eric Baltunes, and you can find Tom Sara 477 00:23:00,720 --> 00:23:06,280 Speaker 1: fagus at Tee Sarah Fagas. Good Luck's bulling that Trillions 478 00:23:06,359 --> 00:23:09,640 Speaker 1: is produced by Magnus Hendrickson. Francesca Levy is the head 479 00:23:09,720 --> 00:23:11,719 Speaker 1: of Bloomberg podcast Bible