WEBVTT - The Weird Burden of QQQ

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<v Speaker 1>Well, Kinderchion's I'm Joel Webber and I'm Eric Valchunis.

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<v Speaker 2>Eric.

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<v Speaker 1>There's this reporter that we work with in Bloomberg News

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<v Speaker 1>who came over to me at Bloomberg Business Week recently

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<v Speaker 1>and was like, Hey, do you know that QQQ makes

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<v Speaker 1>no money for Invesco? And I go, Katie Greifield, this

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<v Speaker 1>is a story we need to do, so we're doing it.

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<v Speaker 1>Katie Greifield has written that story for Bloomberg business Week. Eric,

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<v Speaker 1>is that a shaker to you, that QQQ makes no

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<v Speaker 1>money for Invesco?

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<v Speaker 2>Well, it isn't because I'm an ETF nerd and this

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<v Speaker 2>is sort of known in the nerd world, But for

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<v Speaker 2>most people it's probably a shocker. And it's really a

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<v Speaker 2>great insight into how different structures exist in the ETF world.

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<v Speaker 2>Not every ETF is an open end fund. The early

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<v Speaker 2>ones were structured a little differently, and the way people

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<v Speaker 2>are is different. But the other thing that I find,

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<v Speaker 2>I just find the cues fascinating for many other reasons.

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<v Speaker 2>So I'm always up the Q discussing.

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<v Speaker 1>Nickname sure, yeah, shorthand for QQQ, which this is a

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<v Speaker 1>tech juggernaut.

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<v Speaker 2>Eric, to say the least, our team and I we

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<v Speaker 2>always sort of like we have an international team and

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<v Speaker 2>we just there's something about the cues that captures like

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<v Speaker 2>the American innovation that you just don't get in the

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<v Speaker 2>rest of the world. And this index just something about

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<v Speaker 2>this index and the NASAQ exchange attracts, you know, the

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<v Speaker 2>tip of the spear of these kind of like juggernaut

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<v Speaker 2>innovators that are you know, largely an American thing, and

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<v Speaker 2>it just kicks ass this index, the CTF, and it's

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<v Speaker 2>a phenomenon.

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<v Speaker 1>But here's the thing. Katie kind of buried the lead

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<v Speaker 1>when she came to me because Invesco has found a

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<v Speaker 1>way to make money on the cues. We're going to

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<v Speaker 1>talk about that. So joining us Athanasio, Sarah Faegas of

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<v Speaker 1>Bloomberg Intelligence where he's an ETF analyst, as well as

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<v Speaker 1>Key Greifeld the Bloomberg News where she's an e ETF reporter,

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<v Speaker 1>and so much more, this time on Trillions the Cues. Atanasios, Katie,

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<v Speaker 1>welcome back to Trillions.

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<v Speaker 3>Yeah, nice to see you guys.

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<v Speaker 4>Thrilled to be here.

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<v Speaker 1>Okay, give me a sense, Katie, how big is QQQ.

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<v Speaker 4>If you want a number, it's two hundred billion dollars

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<v Speaker 4>in assets under management. Give her take. I believe it's

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<v Speaker 4>the fifth largest ETF out there, at least in the US,

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<v Speaker 4>and it's one of the oldest too. And I think

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<v Speaker 4>you and Eric set up really nicely in the intro.

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<v Speaker 4>It's just synonymous with tech investing. At this point, you say,

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<v Speaker 4>the Cues people know what you talked, you were talking about.

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<v Speaker 4>It's one of those household names at this point.

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<v Speaker 1>Okay, So why does Investco not make any money on

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<v Speaker 1>its flagship product.

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<v Speaker 4>It's pretty wild, And like Eric said, if you're in

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<v Speaker 4>the know, you know. But I'd been covering ETFs for

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<v Speaker 4>three and a half years and this was actually born

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<v Speaker 4>out a tweet someone posted, I think it was Nate

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<v Speaker 4>JERSI actually posted that the Cues are earning a ton

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<v Speaker 4>of money this year because their expense ratio is twenty

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<v Speaker 4>basis points, which is relatively high for a passive product.

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<v Speaker 4>And obviously the AUM and the Cues has ballooned this

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<v Speaker 4>year because tech is on fire. And then I think

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<v Speaker 4>it was Ben Johnson from morning Star who pointed out

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<v Speaker 4>in the comments that Invesco earned no money off of that,

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<v Speaker 4>and then from there I fill down a rabbit hole

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<v Speaker 4>Athanasios has covered that that if you look at this

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<v Speaker 4>structure of the CUES, it's set up as a unit

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<v Speaker 4>investment trust. So that's important, you very important. It's like

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<v Speaker 4>the vestigial organ of the ETF industry baked into that

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<v Speaker 4>expense ratio. Part of it goes to the index provider NASDAC,

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<v Speaker 4>part of that goes to the trustee. The rest of

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<v Speaker 4>that goes to marketing. For whatever reason, none of it,

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<v Speaker 4>virtually none of it.

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<v Speaker 1>Goes to Investco worth mentioning. Invesco sponsors this program. We

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<v Speaker 1>would do this episode even if they didn't, because it's fascinating.

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<v Speaker 1>Athanasios U T Unit investment trust. What is it? Why

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<v Speaker 1>did it become a vestisual organ?

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<v Speaker 3>So when you look at when the first ETFs launched,

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<v Speaker 3>like Spy is also a u T, they were just cheaper,

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<v Speaker 3>they were easier, you know, without getting too much into it,

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<v Speaker 3>they don't Spy being the biggest, being the biggest and

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<v Speaker 3>the first, so there's a few of them out there. Uh,

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<v Speaker 3>they were just cheaper. You don't have to have a

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<v Speaker 3>border director, so it's just a lot easier to launch

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<v Speaker 3>these products. I also don't think issuers thought these products

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<v Speaker 3>be this big when they first brought them to market.

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<v Speaker 3>So they're like, yeah, we're just going to offer this

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<v Speaker 3>beta type investment maybe gets some money into it. We

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<v Speaker 3>can't charge on it, and that's the biggest you know,

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<v Speaker 3>Katie alluded to it. You can't make money on a

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<v Speaker 3>u T. So we really think about it, like, I

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<v Speaker 3>think this is like the biggest act of charity ever.

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<v Speaker 3>Buy investo because not only are they not making any

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<v Speaker 3>money on it, it's like one of the best performing

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<v Speaker 3>ETFs like ever. Right, so you're getting all this, you're

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<v Speaker 3>getting these really good returns and this issue is making

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<v Speaker 3>almost no money on it. So it's just like this incredible, Like,

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<v Speaker 3>you know, why.

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<v Speaker 1>Don't they just change it and make it become a

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<v Speaker 1>closed infun.

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<v Speaker 3>Uh you can't. You know, there's ways around it. I

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<v Speaker 3>think we've sort of talked about they're trying to launch

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<v Speaker 3>other products that are tied to the queues that are

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<v Speaker 3>not in the U T structure, but a conversion unlikely,

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<v Speaker 3>you know, maybe it could happen. I think we've talked

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<v Speaker 3>about it on other shows. This Vanguard patent, so maybe

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<v Speaker 3>if that opens up, maybe they can add a share

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<v Speaker 3>class to it. I'm sure lawyers are working on it,

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<v Speaker 3>but you know, in the meantime, Investco is trying to

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<v Speaker 3>you know, launch a different structure with KIQM that isn't

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<v Speaker 3>a u T it's cheaper and all that money goes

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<v Speaker 3>to Investco.

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<v Speaker 4>Well, just on that point, they could do a shareholder vote.

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<v Speaker 4>They could, but talking to Investco about it, I mean,

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<v Speaker 4>it would just there's tens of thousands of Q shareholders

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<v Speaker 4>at this point hard to track down. It would just

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<v Speaker 4>be so outrageously expensive and complicated that it's pretty much impossible.

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<v Speaker 1>I think this is the longest that Eric Bulchernis has

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<v Speaker 1>ever been quiet. Eric. If you were in Vesco and

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<v Speaker 1>you were not making money off of your flagship product

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<v Speaker 1>QQ because of its structure, and that you couldn't do

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<v Speaker 1>anything about that, what would you do?

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<v Speaker 2>Yeah, it would be tough to see all the success

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<v Speaker 2>that you're helping and you don't get that much, you know,

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<v Speaker 2>a real big taste of it. It seems like all

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<v Speaker 2>these other places are getting royalties off of the song

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<v Speaker 2>you wrote in a weird way, even though Invesco did

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<v Speaker 2>buy it.

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<v Speaker 1>I mean it wasn't there, okay, Yeah, And Invesco Worth

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<v Speaker 1>Mentioning did not create the product at an Ossios.

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<v Speaker 3>Actually the NASDAC created. It just has like a beta

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<v Speaker 3>offering like to increase trading.

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<v Speaker 1>In like nineteen ninety nine, like right before everything blew

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<v Speaker 1>up in the dot com world.

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<v Speaker 3>Yeah exactly, and like you know, before anyone really cared

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<v Speaker 3>about ETFs or whatnot. And then eventually they sold it

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<v Speaker 3>to power Shares and then power Share just rebranded to Investco,

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<v Speaker 3>so you know, that's what it been. The the timeline

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<v Speaker 3>of it.

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<v Speaker 4>Wait, Investco bought power.

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<v Speaker 3>Shares, it was zach So the way it worked was

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<v Speaker 3>and the reason they they did this is so that

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<v Speaker 3>money they do make quote unquote it has to be

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<v Speaker 3>spent on marketing. So when you when it was called

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<v Speaker 3>the power Shares QQQ, they had to call it power Shares, right,

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<v Speaker 3>But Invesco wanted to leverage that into all their products,

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<v Speaker 3>so saying, we're going to drop the power Shares name

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<v Speaker 3>only called Investco and now we can stretch those marketing

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<v Speaker 3>dollars to anything Investco related. So it's really like a

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<v Speaker 3>marketing ploy. So we sort of related to like no

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<v Speaker 3>brewsters millions, we like have to spend all this money

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<v Speaker 3>by like the end of the year. So they just

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<v Speaker 3>did it to be able to leverage it, and so like,

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<v Speaker 3>now you're not just thinking power shares, You're thinking Investco

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<v Speaker 3>and this, you know, spills down to a lot of

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<v Speaker 3>different products, not just the.

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<v Speaker 1>Cues Okay, Eric, what would you do?

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<v Speaker 3>Uh?

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<v Speaker 2>I mean what I would do is what they did exactly.

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<v Speaker 2>I think putting Investco in the name, so at least

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<v Speaker 2>you get Invesco in those advertisements, because Mike, you know,

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<v Speaker 2>when there's other unit trust out there, and I feel

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<v Speaker 2>like even though they advertise, they would rather advertise with

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<v Speaker 2>their lower products that need it more or that are

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<v Speaker 2>more timely, but at least they get the name in there.

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<v Speaker 2>And I think what they did was interesting. So I

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<v Speaker 2>want to steal Katie's thunder. But they created go for

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<v Speaker 2>It QQQM, which is again like a total carbon copy.

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<v Speaker 2>It's the same thing. It's five basis points cheaper.

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<v Speaker 1>But when you say same thing, tell me what is it?

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<v Speaker 1>Because is it the same index? And what is the index?

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<v Speaker 1>And what's in it?

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<v Speaker 2>Yeah? It tracks the Nasdaq one hundred, just like the CUESA.

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<v Speaker 2>So it launched an exact competitor to itself, which again

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<v Speaker 2>is unusual, but I get it. I mean I can

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<v Speaker 2>see why, you know, I shares did something not exactly

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<v Speaker 2>the same, but when they launched their core series. We've

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<v Speaker 2>seen people clone things like Spider has a they have

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<v Speaker 2>a Spy, and they also have like a cheaper version

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<v Speaker 2>of Spy that people don't really know about, but it's

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<v Speaker 2>like way cheaper. This isn't the first time it's happened,

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<v Speaker 2>but you have seen these companies sort of get creative

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<v Speaker 2>in a way that they can continue to offer cheap

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<v Speaker 2>products but at the same time maybe make a little

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<v Speaker 2>more money for themselves. And I look at this as

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<v Speaker 2>one of those moves that is again not unprecedented.

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<v Speaker 1>If you're in the know, why would you buy qqq

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<v Speaker 1>instead of QQQM, which is kind of a little bit

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<v Speaker 1>of what you're describing, like, if I can get the

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<v Speaker 1>exact same thing for cheaper, why wouldn't I.

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<v Speaker 2>Well, I mean, I've been looking at gold ets for

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<v Speaker 2>the past few months because of the spot bitcoin race.

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<v Speaker 2>I find those equal parallels, and GLD still is a

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<v Speaker 2>massive monster ETF even though there's many cheaper ones, if

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<v Speaker 2>you get liquidity, you pretty much have like almost like

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<v Speaker 2>an unlimited life in ETFs. Liquidity is very hard to unwind,

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<v Speaker 2>and there's bigger investors out there who prioritize liquidity above

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<v Speaker 2>everything else. They don't really care that it's five basis

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<v Speaker 2>points more expensive. That's why ETFs like eem, EFA, GLD

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<v Speaker 2>and SPY for that matter, are going to roll on

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<v Speaker 2>for decades because of that liquidity. Now, over time, over ten, fifteen,

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<v Speaker 2>twenty years, it's possible as these cheaper ones sort of

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<v Speaker 2>chip away and get liquid themselves, there could be a

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<v Speaker 2>turning point where QQQM gets more liquid in the ques

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<v Speaker 2>and then it's gradually then suddenly, and where our team

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<v Speaker 2>is actually looking at will that ever happen with SPY,

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<v Speaker 2>because it is starting to happen with EEM and IMG.

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<v Speaker 2>But for now, though, liquidity is so much more massive

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<v Speaker 2>with the cues that it's probably only going to appeal

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<v Speaker 2>to the advisor world for the time being.

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<v Speaker 1>Katie, So, QQQM a couple years old. How's it going

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<v Speaker 1>so far?

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<v Speaker 4>It's doing pretty well. I mean, it launched October twenty twenty.

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<v Speaker 4>I believe it's already up to fourteen billion dollars AUM,

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<v Speaker 4>so that's a very successful launch. But you know, we're

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<v Speaker 4>talking about two hundred billion dollars for the queue, so

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<v Speaker 4>not quite comparable yet. But I mean to piggyback off

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<v Speaker 4>what Eric is saying. The queues like spy trades like water,

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<v Speaker 4>So institutional investors that's where they want to go for liquidity.

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<v Speaker 4>But if you talk to Investo about why they chose

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<v Speaker 4>to launch QQQM, I mean, they'll tell you I did.

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<v Speaker 4>They'll tell you then that revenue streams are important to them, surprise.

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<v Speaker 4>But also it is geared towards a different type of investor.

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<v Speaker 4>If you're a buy and hold investor, you care about

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<v Speaker 4>that five basis points, and you're probably going to buy

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<v Speaker 4>QQQM over the traditional cues because you don't necessarily need

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<v Speaker 4>all that liquidity.

0:11:48.559 --> 0:11:51.440
<v Speaker 2>But by the way, Joel, just to add some data

0:11:51.480 --> 0:11:54.720
<v Speaker 2>behind what Katie just said, So that fourteen billion is

0:11:55.040 --> 0:11:57.200
<v Speaker 2>that's a fast fourteen billion. I was shocked that got

0:11:57.240 --> 0:12:02.040
<v Speaker 2>that big. So fourteen billion basically has one fourteenth the

0:12:02.120 --> 0:12:05.840
<v Speaker 2>assets of the queues already. That's not bad, but it

0:12:05.960 --> 0:12:09.199
<v Speaker 2>still has one one hundred and thirteenth of the volume

0:12:09.280 --> 0:12:13.000
<v Speaker 2>of ques. So again that that to speaks to it's

0:12:13.000 --> 0:12:16.160
<v Speaker 2>easier to grab land than c in the ETF world,

0:12:16.160 --> 0:12:16.720
<v Speaker 2>so to speak.

0:12:17.600 --> 0:12:19.800
<v Speaker 1>That's the first time you've ever said that. It's novel

0:12:20.360 --> 0:12:20.600
<v Speaker 1>like that.

0:12:21.200 --> 0:12:24.320
<v Speaker 2>Yeah, land is assets, c is volume.

0:12:25.480 --> 0:12:25.760
<v Speaker 3>About that.

0:12:26.240 --> 0:12:29.760
<v Speaker 2>That's how we say the State Street and spiders. They

0:12:29.800 --> 0:12:32.800
<v Speaker 2>may be getting losing the land war, but they have

0:12:32.840 --> 0:12:36.240
<v Speaker 2>a killer navy. So I'll stop there.

0:12:37.120 --> 0:12:43.000
<v Speaker 1>Uh, Athanasius, Let's talk about what else they have in

0:12:43.000 --> 0:12:46.160
<v Speaker 1>this strategy, because it doesn't end with qqq M, right,

0:12:46.200 --> 0:12:49.439
<v Speaker 1>It's like, how how far can you take the cues? Uh?

0:12:49.520 --> 0:12:51.840
<v Speaker 3>Yeah, They're trying to take it pretty far. And what

0:12:51.960 --> 0:12:54.240
<v Speaker 3>I thought was really interesting about this is when you

0:12:54.240 --> 0:12:56.200
<v Speaker 3>look at like S and P five hundred ETFs, right,

0:12:56.240 --> 0:12:58.560
<v Speaker 3>they're like two basis points, three basis points, You're like, well,

0:12:58.600 --> 0:13:02.240
<v Speaker 3>why the queues still twenty basis points. Invesco actually had

0:13:02.320 --> 0:13:04.840
<v Speaker 3>an exclusive on this, so no one else could launch

0:13:04.960 --> 0:13:09.400
<v Speaker 3>the queues besides them, and so I'm guessing, you know,

0:13:09.559 --> 0:13:11.040
<v Speaker 3>in the last couple of years they came to some

0:13:11.040 --> 0:13:13.640
<v Speaker 3>sort of agreement that they could start to expand this lineup,

0:13:13.880 --> 0:13:16.560
<v Speaker 3>and they did so. They have something like QQQJ, which

0:13:16.600 --> 0:13:19.200
<v Speaker 3>is sort of like the up and comers that could

0:13:19.200 --> 0:13:22.600
<v Speaker 3>get added to the to the Nasdaq one hundred. Eventually

0:13:23.400 --> 0:13:24.280
<v Speaker 3>I forget the other one.

0:13:24.920 --> 0:13:30.320
<v Speaker 4>There's also qqq S that's the Invesco Nasdaq Future Gen

0:13:30.920 --> 0:13:32.240
<v Speaker 4>two hundred ETF.

0:13:32.400 --> 0:13:34.240
<v Speaker 3>Yeah, there's that one too. So now they've like got

0:13:34.320 --> 0:13:38.520
<v Speaker 3>these you know little qqq offsprings that you know, babyques,

0:13:38.679 --> 0:13:39.360
<v Speaker 3>baby cues.

0:13:39.679 --> 0:13:42.120
<v Speaker 1>Okay, so qq I'm doing well. How about these other

0:13:42.840 --> 0:13:45.199
<v Speaker 1>babyqs they're doing okay.

0:13:45.280 --> 0:13:49.400
<v Speaker 4>If you look at QQQJ, that launch also launched in

0:13:49.559 --> 0:13:53.240
<v Speaker 4>October twenty twenty, so the same time as QQQM, it

0:13:53.280 --> 0:13:56.640
<v Speaker 4>doesn't have fourteen billion dollars though, it has about seven

0:13:56.760 --> 0:14:02.440
<v Speaker 4>hundred million, which is still pretty good. Pretty good. Qqq

0:14:02.960 --> 0:14:07.080
<v Speaker 4>S though, that has just under seven million dollars, so uh,

0:14:07.400 --> 0:14:09.880
<v Speaker 4>not quite taken off yet, but that only launched last October.

0:14:10.640 --> 0:14:12.079
<v Speaker 2>Can I can I throw another one in here? You

0:14:12.120 --> 0:14:15.400
<v Speaker 2>know JP Morgan has you know JETP. They have an

0:14:15.360 --> 0:14:18.480
<v Speaker 2>Asdak version of that called jep Q. This thing has

0:14:18.600 --> 0:14:22.960
<v Speaker 2>five billion dollars already. I mean, so it's I guess

0:14:23.000 --> 0:14:25.080
<v Speaker 2>you can use the index in certain ways if you're

0:14:25.080 --> 0:14:31.520
<v Speaker 2>not investco. But JP Morgan is notoriously good, especially this

0:14:31.520 --> 0:14:34.920
<v Speaker 2>this equity premium suite they have of getting assets.

0:14:35.080 --> 0:14:37.600
<v Speaker 3>Yeah yeah, yeah, I was going to add there's this

0:14:37.680 --> 0:14:40.960
<v Speaker 3>other ETF qqq E, which is equal weight NASDAQ one

0:14:41.040 --> 0:14:44.320
<v Speaker 3>hundred by direction. So you know there's some other non

0:14:44.360 --> 0:14:47.240
<v Speaker 3>tech names in there, so that one's like, really it's hardcore.

0:14:48.080 --> 0:14:51.080
<v Speaker 2>I want to bring this point up because on our team,

0:14:51.200 --> 0:14:53.200
<v Speaker 2>and you know, being in data for all these years,

0:14:53.320 --> 0:14:56.520
<v Speaker 2>we have to classify all these ETFs, and we've actually

0:14:56.560 --> 0:14:58.880
<v Speaker 2>gone back and forth with whether the QUES is a

0:14:58.920 --> 0:15:02.120
<v Speaker 2>tech fund or not because it's only half tech about

0:15:02.880 --> 0:15:04.880
<v Speaker 2>but it just feels like a tech fund, right So

0:15:05.520 --> 0:15:07.520
<v Speaker 2>I think right now we do not have it as tech.

0:15:07.680 --> 0:15:09.880
<v Speaker 2>Occasionally we will count it if we're looking. It depends

0:15:09.920 --> 0:15:12.760
<v Speaker 2>on what we're working on. But it is interesting that

0:15:13.360 --> 0:15:16.640
<v Speaker 2>it's not really anything. It's not beta, it's not a

0:15:16.680 --> 0:15:19.440
<v Speaker 2>tech fund. It's just the companies that list on NASDAC

0:15:19.480 --> 0:15:22.520
<v Speaker 2>and so it's its own little anomaly factor. I think

0:15:22.640 --> 0:15:25.800
<v Speaker 2>that again makes it a real unique index.

0:15:26.320 --> 0:15:28.840
<v Speaker 1>Okay, So one thing that stowed out to me was

0:15:29.120 --> 0:15:33.760
<v Speaker 1>as I was looking through the various offerings that Invesco had,

0:15:34.800 --> 0:15:39.200
<v Speaker 1>I saw a ticker that was qqq E and then

0:15:39.240 --> 0:15:42.040
<v Speaker 1>I noticed that's not Invesco, Katie with that about.

0:15:42.240 --> 0:15:45.440
<v Speaker 4>That's direction. That is an equal weight version of the

0:15:45.520 --> 0:15:49.320
<v Speaker 4>NASAQ one hundred. It's a very clever ticker. And I

0:15:49.360 --> 0:15:53.640
<v Speaker 4>did ask Invesco about it, how they felt about it,

0:15:54.080 --> 0:16:00.440
<v Speaker 4>and Annopaglia was pretty clear, who's, you know, the head

0:16:00.440 --> 0:16:04.200
<v Speaker 4>of Invesco's ETF business. I forget her long fancy title,

0:16:04.280 --> 0:16:07.280
<v Speaker 4>but she's the man if you will. She said that

0:16:07.520 --> 0:16:10.200
<v Speaker 4>it was a decision for them not to launch an

0:16:10.240 --> 0:16:12.600
<v Speaker 4>equal weight version of the NASAQ one hundred and I

0:16:12.600 --> 0:16:15.320
<v Speaker 4>know we'll point out that QQQ E launched it in

0:16:15.360 --> 0:16:19.320
<v Speaker 4>twenty twelve, but she said that if you're investing in

0:16:19.360 --> 0:16:22.000
<v Speaker 4>the cues, that's she thinks of it as a thematic

0:16:22.480 --> 0:16:24.800
<v Speaker 4>investment in that if you were investing in the cues,

0:16:24.880 --> 0:16:27.680
<v Speaker 4>you want that megacap exposure, so it doesn't make sense

0:16:27.720 --> 0:16:29.600
<v Speaker 4>to dilute it by going equal weight.

0:16:29.680 --> 0:16:33.960
<v Speaker 1>So they were fine with having one QQQ that wasn't

0:16:34.000 --> 0:16:34.840
<v Speaker 1>part of the family.

0:16:34.880 --> 0:16:36.120
<v Speaker 4>It is a good ticker though it is.

0:16:36.200 --> 0:16:38.440
<v Speaker 1>Yeah, I like that would you have let that one

0:16:38.440 --> 0:16:42.760
<v Speaker 1>get away? Would you have letten that one get getten away?

0:16:42.840 --> 0:16:45.680
<v Speaker 3>As I mean, you've got like the golden goose already

0:16:45.880 --> 0:16:49.480
<v Speaker 3>right with QQQ, like they can have. You know, it's

0:16:49.520 --> 0:16:52.440
<v Speaker 3>a great it's an interesting product, but they've already got

0:16:52.480 --> 0:16:53.600
<v Speaker 3>the main one.

0:16:53.800 --> 0:16:56.960
<v Speaker 2>If you're investing with the cues, I mean you kind

0:16:56.960 --> 0:17:00.800
<v Speaker 2>of want those juggernaut names to drive you, which everybody's

0:17:00.800 --> 0:17:04.800
<v Speaker 2>calling them now the super seven. So we're looking at Apple, Microsoft, Amazon, Navidia,

0:17:05.280 --> 0:17:09.639
<v Speaker 2>Meta Alphabet, Tesla, and those are the stocks at the

0:17:09.680 --> 0:17:11.639
<v Speaker 2>top which make up I'm just going to guess they

0:17:11.640 --> 0:17:14.400
<v Speaker 2>may here about thirty thirty five percent of the portfolio.

0:17:15.320 --> 0:17:19.879
<v Speaker 2>And these are like again, these are special companies formed

0:17:19.920 --> 0:17:23.560
<v Speaker 2>by special founders. And I sometimes think that there's something

0:17:23.600 --> 0:17:29.119
<v Speaker 2>about NASDAC that attracts real you know, workaholic, visionary, control

0:17:29.200 --> 0:17:32.679
<v Speaker 2>freak type founder people, the Elon Musks, the Bill Gates,

0:17:32.720 --> 0:17:35.960
<v Speaker 2>the Jeff Bezos. You don't get that in other countries.

0:17:36.000 --> 0:17:38.960
<v Speaker 2>And I think that's the edge that the CUES has, which,

0:17:39.000 --> 0:17:40.919
<v Speaker 2>by the way, over the past ten years, the CUES

0:17:41.320 --> 0:17:44.040
<v Speaker 2>has doubled the S and P five hundred. I mean,

0:17:44.080 --> 0:17:46.280
<v Speaker 2>the S and P is a juggernaut and the CUES

0:17:46.320 --> 0:17:48.960
<v Speaker 2>doubled it. And if we just did a run of

0:17:49.000 --> 0:17:51.680
<v Speaker 2>all the mutual funds out there, all the active mutual

0:17:51.720 --> 0:17:54.879
<v Speaker 2>funds are like three thousand, only two have beat it

0:17:54.960 --> 0:17:57.960
<v Speaker 2>over the past ten years, so zer point one percent.

0:17:58.520 --> 0:18:00.680
<v Speaker 2>And the one guy did it by just holding forty

0:18:00.720 --> 0:18:03.800
<v Speaker 2>percent of Tesla, which is almost like cheating. And then

0:18:03.800 --> 0:18:05.920
<v Speaker 2>the other one is this weird small cap growth fund

0:18:05.960 --> 0:18:07.920
<v Speaker 2>that we're still trying to figure out how on how

0:18:08.000 --> 0:18:10.680
<v Speaker 2>exactly it pulled that off. But the point being is

0:18:10.720 --> 0:18:13.639
<v Speaker 2>the CUES is basically beat everybody. So even though Athanasio

0:18:13.640 --> 0:18:16.480
<v Speaker 2>has pointed out that twenty basis point expense ratio in

0:18:16.520 --> 0:18:18.840
<v Speaker 2>a normal ETF category, you'd think that'd be priced down

0:18:18.840 --> 0:18:21.439
<v Speaker 2>by now, I would say twenty BIPs is cheap. If

0:18:21.480 --> 0:18:23.760
<v Speaker 2>you look at it as the best performing active fund

0:18:24.240 --> 0:18:26.320
<v Speaker 2>for the past ten years, you know by far that

0:18:26.359 --> 0:18:27.600
<v Speaker 2>twenty BIPs is pretty low.

0:18:28.280 --> 0:18:31.280
<v Speaker 1>Athanasius, Katie, thanks for joining us on Trillions.

0:18:31.680 --> 0:18:32.280
<v Speaker 4>This is great.

0:18:32.560 --> 0:18:33.479
<v Speaker 3>Yeah, thanks for having me.

0:18:39.040 --> 0:18:41.399
<v Speaker 1>Thanks for listening to Trillions. Until next time. You can

0:18:41.400 --> 0:18:45.639
<v Speaker 1>find us on the Bloomberg terminal, Bloomberg dot com, Apple Podcasts, Spotify,

0:18:46.040 --> 0:18:48.720
<v Speaker 1>or wherever else you like to listen. We'd love to

0:18:48.720 --> 0:18:51.880
<v Speaker 1>hear from you. We're on X I'm at Joel Weber Show,

0:18:52.119 --> 0:18:56.359
<v Speaker 1>He's at Eric Balchuna's Trillions is produced by Magnus Hendrickson,

0:18:57.200 --> 0:19:00.399
<v Speaker 1>but credit for this episode goes to Carmen red Riquez.

0:19:01.359 --> 0:19:05.080
<v Speaker 1>Saige Bauman is the head of Bloomberg podcast by