Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: You're listening to Bloomberg Business Week with Carol Masser and
Speaker 2: Tim Stenoveek on Bloomberg Radio.
Speaker 1: Muckle, now about you let me drive?
Speaker 2: Oh no, no, no no, this is not a toy, honey.
Speaker 3: Please, I'll do the gravels.
Speaker 1: Excuse mate, I want to try it.
Speaker 2: It's a good question.
Speaker 1: This is the drive to the Clothes Punks music on
Speaker 1: Bloomberg Radio.
Speaker 3: All right, everybody, we are just about eighteen minutes away
Speaker 3: from the closing bell on this Tuesday. We've mentioned how
Speaker 3: during the two o'clock hour Wall Street time we did
Speaker 3: see a leg down in terms of equities, going near
Speaker 3: our lows of the session. We've bounced back, not completely,
Speaker 3: but definitely off our lows. But as you have heard
Speaker 3: from Bill and both Charlie so down about half a
Speaker 3: percent in the S and P five hundred, NASDEK one hundred.
Speaker 3: Tim still down to also about half a percent.
Speaker 2: I want to bring in Jennifer Grantcio. She's head of
Speaker 2: ETFs and Global head of ETFs ATTCW. She was also
Speaker 2: former a CEO of the impact investment firm Engine Number one.
Speaker 2: Remember they took on Exelon back in twenty twenty one
Speaker 2: and scored a major victory by winning three seats on
Speaker 2: the board. She's back in our Bloomberg Interactive Brokers studio
Speaker 2: usually in LA spends a lot of time on the road.
Speaker 2: We are happy to see you here in New York.
Speaker 2: How are you.
Speaker 4: I'm great.
Speaker 2: Well, it's good to have you with us. Carol and
Speaker 2: I were talking a little earlier about sort of the
Speaker 2: strangeness of the market since quote unquote, I guess the
Speaker 2: April eighth liberate post so called Liberation Day low. What
Speaker 2: do you make of what's happened over the last six
Speaker 2: weeks or so, because we are pretty close to all
Speaker 2: time highs on the S and P five hundred.
Speaker 4: Yeah, I mean it's an interesting question. I think everybody
Speaker 4: wrestles with the same question from an equity perspective. You know,
Speaker 4: we actually at TCW are doing concentrated fundamental portfolios, so
Speaker 4: we're looking for opportunities high quality management teams, quality revenue
Speaker 4: growth through trends like how we use energy and electricity
Speaker 4: and supply chain. We're shoring. So they're like, we like
Speaker 4: the names we have in the portfolios. We think it's
Speaker 4: a good time for people to be investing at the
Speaker 4: same time. You know, we're a big bond investor, and
Speaker 4: so when we are managing the core bond products, one
Speaker 4: of the ETFs there it's done very well, is flexor
Speaker 4: and when we're managing that, we're a value investor. So
Speaker 4: we took advantage of the volatility in credit spreads in particular,
Speaker 4: drove a lot of alpha for clients looking back a
Speaker 4: couple of weeks. But in the bond fund, we're still
Speaker 4: being cautionary. We want to be positioned so if the
Speaker 4: economy does slow, we're doing the right thing for investors.
Speaker 3: What kind of visibility do you feel right now that
Speaker 3: you have on the outlook?
Speaker 4: I think it's uncertain, yeah, and we just don't know,
Speaker 4: and we have data. We have this debate internally within
Speaker 4: TCW all the time on to what extent is it's slowing.
Speaker 4: How many rate cuts will there be this year? We
Speaker 4: do not have the answer. But in the bond part
Speaker 4: of the portfolio, we think people should be positioned with
Speaker 4: an active manager so that we're managing that for them
Speaker 4: as things unlined.
Speaker 2: I think one thing that we've been thinking a lot
Speaker 2: about is really the and we'll talk about some of
Speaker 2: these ETFs in just a second, but from a big
Speaker 2: picture perspective, and Eric Weener from our equities team was
Speaker 2: just in here talking about how professionals that we've reported
Speaker 2: on are still kind of thinking about this other shoe
Speaker 2: that's going to drop. There's like just around the corner,
Speaker 2: there could be some sort of big risk, whether it's
Speaker 2: trade related, whether it's related to the economy. What do
Speaker 2: you see as the risks out there right now?
Speaker 4: I think from a tariff perspective, it's come back a lot,
Speaker 4: but tariffs that are in the low single digits, low
Speaker 4: double digits rather, I mean, that's still a big tax
Speaker 4: on the consumer. So we're watching that. It's better, they're lower,
Speaker 4: they're a little bit more reasonable, but we don't know
Speaker 4: how much of an impact that will have on the consumer.
Speaker 4: So that's probably the main thing we're watching, and we're
Speaker 4: looking at everything. We look at employment data, we look
Speaker 4: at the earnings calls to see what consumer companies thinking.
Speaker 2: That's funny because I thought, I mean when we were
Speaker 2: talking to Eric earlier, it was like, yeah, we were
Speaker 2: waiting for the companies reporting earnings for the most recent
Speaker 2: quarter to talk about the impact and certainly a lot
Speaker 2: of them did, but we didn't necessarily see the equity
Speaker 2: market reaction that I think people thought they would. Like
Speaker 2: the concern is, Okay, maybe it's happening now rather than
Speaker 2: in the last quarter.
Speaker 3: Well, it does feel like if we're going to see
Speaker 3: things like the tariff impact, it's not necessarily showing up
Speaker 3: in the statistics, right, And as you said, Tim, like
Speaker 3: in the earnings reports, that's maybe a second half thing
Speaker 3: and we've got to kind of wait and see for that.
Speaker 4: Yeah, that's right, and that's why we think we have
Speaker 4: we have to be careful from a portfolio positioning perspective.
Speaker 3: Jennifer, I want to ask you. I know I probably
Speaker 3: do this before, but I'm always curious about flows where
Speaker 3: you see investors moving in and out of at this point,
Speaker 3: because obviously it's been an interesting what four weeks, six weeks,
Speaker 3: and I'm just curious how much movement was going on.
Speaker 4: Yeah, I mean, I think at the at a wealth
Speaker 4: and retail level, what we've seen is a lot of
Speaker 4: money rebalancing back towards equities. So people certainly moved right
Speaker 4: back into equity, they really did, so we've seen that completely.
Speaker 3: The money that came out.
Speaker 4: They've taken they've taken money out of cash and other
Speaker 4: things and put it back in equity and then in
Speaker 4: our shop, a lot of what we do is are
Speaker 4: these thematic or complementary equity strategies, and so some of
Speaker 4: them have done very well. I mean they've done great
Speaker 4: from a performance perspective in terms of beating the S
Speaker 4: and P. But from a flows perspective, we've seen money
Speaker 4: come into high quality company defensive growth grow is the
Speaker 4: ETF there, as well as into powered, which is the
Speaker 4: energy system transition product.
Speaker 3: I mean that has been such a dominant theme. I
Speaker 3: was asking before we got going Tom if you were
Speaker 3: at Milkin, and I mean that was one of despital
Speaker 3: the uncertainty and teriff conversations. One of the things that
Speaker 3: seemed to be again beating the drum was that of
Speaker 3: the AI play and the energy that's going to be
Speaker 3: needed that build out was still happening. And is that
Speaker 3: what you're talking about?
Speaker 4: First? For sure? And so from an from an investment perspective,
Speaker 4: the way that we're managing products that people can come into.
Speaker 4: We have an AI product we have for a very
Speaker 4: long time, as well as the powered ETF strategy, which
Speaker 4: are a way to get access to that theme, but
Speaker 4: we think don't do it in a way that is
Speaker 4: too narrow. Both trends how companies use AI, how companies
Speaker 4: get power and use electricity. We're very early innings on
Speaker 4: these mega trends.
Speaker 3: Can I just say powered is app almost twenty percent
Speaker 3: over the past month, up about eleven percent year to date.
Speaker 2: Jennifer, how would you characterize the flows that you've seen
Speaker 2: in the last six weeks or so? Would they be
Speaker 2: more defensive or more oriented toward growth in your view?
Speaker 4: It's somewhere. It's somewhere in between. Just the real answer.
Speaker 4: We're seeing both. And then on the fixed income side
Speaker 4: of the business. So with Flexer, which is total return
Speaker 4: bond fund but also as a very strong income target,
Speaker 4: it's yielding around six percent. We've seen very strong flows there.
Speaker 4: So from a portfolio perspective, it certainly doesn't feel like
Speaker 4: people are doing one thing or the other. They're just
Speaker 4: topping up positions.
Speaker 2: How's it yielding six percent?
Speaker 4: From an SEC yield perspective, we have a target and
Speaker 4: we're managing for income while we're doing till return at
Speaker 4: the same time. Okay, So I think that's what sort
Speaker 4: of rocketed that particular fund up to the top of
Speaker 4: the category.
Speaker 2: Yeah, this is nearly tripled since it was converted back in, showing.
Speaker 3: Exactly you know, we introduced you and we said, you know,
Speaker 3: former CEO of Engine number one, you did take on
Speaker 3: Xon major victory three seats.
Speaker 2: On the board.
Speaker 3: We're now looking at an administration that seems to be
Speaker 3: rolling back perhaps on energy things. Although there was a
Speaker 3: positive for wind farms today based on Trump administration initiatives.
Speaker 3: How do you think about that? I don't knowether I
Speaker 3: should say ESG, but the alternative energy space, that kind
Speaker 3: of transitioning that we were seeing pretty aggressively, how do
Speaker 3: you think about that? Does that continue in terms of
Speaker 3: the move away maybe from fossil fuel companies or do
Speaker 3: you think maybe this is another pivotal change that we
Speaker 3: kind of roll back a little bit.
Speaker 4: Yeah, I mean, I think we have such a demand
Speaker 4: for energy. I think that we're going to continue to
Speaker 4: continue both so prudent, more efficient fossil fuel. But some
Speaker 4: of the companies we hold in the powered portfolio, for example,
Speaker 4: are its natural gas and other sources of non intermittent power.
Speaker 4: Data centers need those, and then the more effective we
Speaker 4: can get with wind and solar. People are still investing there.
Speaker 4: So I think it's again it's a massive trend and
Speaker 4: we need so much energy. We'll see balanced growth across
Speaker 4: the brown and the green parts of the industry.
Speaker 3: Where does the environment come into all of this? Just
Speaker 3: thirty seconds? Like, is there like a concern among companies? Like,
Speaker 3: I don't know if you guys are talking with investors,
Speaker 3: do they care about it? Do CEO's leaders and forgive
Speaker 3: me just got about twenty twenty five seconds.
Speaker 4: Yeah, I think from an environmental perspective, I think both
Speaker 4: asset owners like public pension funds and sovereign wealth funds,
Speaker 4: as well as CEOs of companies care about these issues.
Speaker 4: But we're having a conversation that's based on financial metrics, yeah,
Speaker 4: and long term outcomes.
Speaker 3: Okay, so that plays into it in a big way.
Speaker 3: So good to have you in studio, So good to
Speaker 3: see you.
Speaker 4: Be well.
Speaker 3: Be well, Jennifer Grencio, head of ETFs and Global head
Speaker 3: of ETFs over at TCW. Right here any