WEBVTT - Freedom Has Paid Off For this Indie ETF 0:00:05.880 --> 0:00:06.560 Welcome and Trallians. 0:00:06.600 --> 0:00:08.879 I'm Joe Webber and I'm Eric Valcunas. 0:00:11.720 --> 0:00:11.880 Eric. 0:00:11.920 --> 0:00:16.400 For the third time, we're having Perth Toll on the podcast. 0:00:17.000 --> 0:00:20.280 She's the founder of the Life and Liberty Indexes and 0:00:20.320 --> 0:00:24.040 specifically the Freedom one hundred Emerging Markets ETF. She was 0:00:24.040 --> 0:00:27.120 on the first time in twenty nineteen when the ETF 0:00:27.200 --> 0:00:29.760 was new, and she came back in twenty twenty two 0:00:29.880 --> 0:00:32.600 to do a debate with Jeremy Schwartz Wisdom Try about 0:00:32.600 --> 0:00:36.800 emerging markets. And since either of those appearances she has 0:00:36.880 --> 0:00:42.080 been crushing it. Her ticker FRDM has been absolutely crushing it. 0:00:42.400 --> 0:00:45.920 What do you want to know about this ETF now 0:00:46.360 --> 0:00:47.320 that you didn't know before? 0:00:47.760 --> 0:00:50.040 Perth has been interesting to me because a it's indy. 0:00:50.360 --> 0:00:53.280 I like indie stories. She lived it. You know, a 0:00:53.280 --> 0:00:55.920 lot of this is about, you know, eliminating countries that 0:00:55.960 --> 0:00:58.960 are not free and buying the ones that are more free. 0:00:59.520 --> 0:01:03.360 And her experience as a young person in China affected 0:01:03.400 --> 0:01:06.360 all this. So the story is really great and the 0:01:06.400 --> 0:01:08.640 indie it's hard to get assets as an indie. You 0:01:08.720 --> 0:01:11.160 kind of need a shiny object moment, as we say 0:01:11.200 --> 0:01:15.200 all the time. Well, FRDM has got that moment right now. 0:01:15.240 --> 0:01:17.640 I mean I was on a podcast with Dave Nady 0:01:17.680 --> 0:01:19.720 called etf Zoo, which is pretty good. It's a bunch 0:01:19.760 --> 0:01:23.680 of analysts to arguing over stuff, and so FRDM came 0:01:23.760 --> 0:01:25.319 up and I didn't realize how good. 0:01:25.200 --> 0:01:25.560 It was doing. 0:01:25.640 --> 0:01:28.520 Joel, here's the numbers. It's up one hundred and three 0:01:28.560 --> 0:01:33.160 percent in the past five years. Emerging markets, we'll say, 0:01:33.520 --> 0:01:35.679 measured by EEM. 0:01:35.000 --> 0:01:37.080 Is up twenty percent. So think about it. 0:01:37.120 --> 0:01:40.720 You're five xing the thing that you're also investing within. 0:01:41.440 --> 0:01:43.680 It's not like I don't know some random crypto five 0:01:43.840 --> 0:01:47.600 xing the S and P or something. Her stocks and 0:01:47.640 --> 0:01:50.320 her countries are within EEM. So in other words, she 0:01:50.360 --> 0:01:53.840 picked the right ones or the freedom story has just 0:01:53.960 --> 0:01:56.680 really played out in an intense way right now. And 0:01:56.720 --> 0:01:58.480 that one hundred percent, by the way, is even better 0:01:58.520 --> 0:02:01.000 than the queues, which is a ninety two percent, And 0:02:01.040 --> 0:02:05.080 it's a double EMC, which is I shares this emerging 0:02:05.120 --> 0:02:07.160 markets x China, which actually had a nice run a 0:02:07.200 --> 0:02:09.959 couple of years ago. So you're even because sometimes people 0:02:10.000 --> 0:02:12.560 are like, well, FRDM is just x China, but not really. 0:02:12.600 --> 0:02:17.240 It's actually done much greater than even EMXC. So I 0:02:17.280 --> 0:02:20.639 was like, damn this, this is time to basically let 0:02:20.680 --> 0:02:23.400 her maybe do a little victory lap and ask some 0:02:23.520 --> 0:02:24.240 questions like. 0:02:24.200 --> 0:02:27.320 The football, and you know what what happened? You know, 0:02:27.320 --> 0:02:30.240 how how did this work out so perfectly. 0:02:32.880 --> 0:02:37.919 This time on Trillions The Future of Freedom Perth, Welcome 0:02:37.919 --> 0:02:38.639 back to Trillions. 0:02:39.680 --> 0:02:40.600 Thanks so much for having me. 0:02:40.760 --> 0:02:42.520 So we gave you kind of a long setup in 0:02:42.560 --> 0:02:48.760 our intro there. Why why has this thesis worked so well? 0:02:49.000 --> 0:02:51.079 Yeah? You know, I am so pleased with the way 0:02:51.160 --> 0:02:54.600 that thesis has played out in this time period. I mean, 0:02:54.720 --> 0:02:58.080 five years is not super short. It's not super long. 0:02:58.840 --> 0:03:01.760 We've been around for all seven years. So the first 0:03:02.120 --> 0:03:03.440 you know, first year and a half or so, it 0:03:03.480 --> 0:03:06.680 was like COVID times coming out of COVID, and then 0:03:06.800 --> 0:03:10.360 this five year run. So it has been an amazing run. 0:03:10.440 --> 0:03:14.080 And you know, as as the you know, creator of 0:03:14.120 --> 0:03:16.760 the of the strategy, I couldn't be happier for our 0:03:16.800 --> 0:03:20.320 clients and just for the way that it's played out. So, 0:03:20.600 --> 0:03:23.440 I mean, I think it's a confluence of many factors. 0:03:23.480 --> 0:03:26.760 I cannot take credit for the market, but the strategy 0:03:26.840 --> 0:03:32.079 did deliver the you know, the exposures to the freest 0:03:32.120 --> 0:03:36.080 countries in the emerging market space, and that freedom story 0:03:36.280 --> 0:03:40.600 has truly played out very well. You know, it's not 0:03:40.720 --> 0:03:44.240 just one country. This past year twenty twenty five, South 0:03:44.280 --> 0:03:47.360 Korea was the top performer. The year before that, Taiwan 0:03:47.520 --> 0:03:50.480 was the top performer, the year before that it was Poland, 0:03:50.600 --> 0:03:53.200 the year before that it was Chile. So it's been 0:03:53.240 --> 0:04:00.640 a diversified kind of kind of outperformance in the country. 0:04:00.680 --> 0:04:02.320 So those four that I just named are always in 0:04:02.360 --> 0:04:04.640 the top four, have always been in the last of. 0:04:05.640 --> 0:04:10.160 Those were the top four. So I'm curious, what, if anything, 0:04:10.520 --> 0:04:14.080 have you changed along the way during those five years 0:04:14.120 --> 0:04:16.520 of the ETF or the seven years of the index. 0:04:16.560 --> 0:04:18.480 What what do you feel like have been the most 0:04:18.680 --> 0:04:20.880 substantial tweaks you've made as you've gone. 0:04:23.200 --> 0:04:26.400 So this is something I'm actually quite proud of. We've 0:04:26.400 --> 0:04:31.839 made substantially no changes to the index methodology since the beginning, 0:04:31.839 --> 0:04:34.120 and that is the idea of the index. Right. So 0:04:34.520 --> 0:04:37.120 when I started this, as Eric mentioned, I am a 0:04:37.240 --> 0:04:41.800 complete indie and total unknown, and I you know, did 0:04:41.839 --> 0:04:44.800 not have the pedigree of a PM or fund manager 0:04:45.520 --> 0:04:47.800 in the in the traditional sense, right. So I came 0:04:47.839 --> 0:04:51.200 from Fidelity, where you know, we have the likes of 0:04:51.240 --> 0:04:54.599 Will Danoff, you know, Peter Lynch. These guys are who 0:04:54.640 --> 0:04:56.919 I imagine if they wanted to start something like this, 0:04:56.960 --> 0:04:58.960 would do it actively, and it would be fine because 0:04:59.000 --> 0:05:01.960 they have the name. I didn't have that. So the 0:05:01.960 --> 0:05:05.839 only thing I could do is a systematic, rules based strategy. 0:05:05.880 --> 0:05:08.240 And also that's what I wanted for this, because I 0:05:08.240 --> 0:05:11.440 didn't want to be responsible for what countries were in, 0:05:11.480 --> 0:05:14.520 what countries were out, what countries were you know, weighted higher. 0:05:14.560 --> 0:05:18.159 We actually use only third party quantitative metrics from the 0:05:18.160 --> 0:05:20.920 Cato Institute and the Fraser Institute. They you know, measure 0:05:21.000 --> 0:05:24.240 freedom on eighty seven different variables, and we use the 0:05:24.279 --> 0:05:27.160 composite free, you know, the composite equal weight of all 0:05:27.200 --> 0:05:30.679 those variables. We don't even know weight any particular variable higher. 0:05:30.720 --> 0:05:34.680 So we take no subjective stance and it's as objective 0:05:34.720 --> 0:05:38.640 as possible. And so I think one thing that I'm 0:05:38.680 --> 0:05:41.039 very proud of is we always rebalance on time. We 0:05:41.160 --> 0:05:45.279 always stick to the methodology, and you know, our partners 0:05:45.320 --> 0:05:48.200 at ETF architect also want to make sure that we 0:05:48.279 --> 0:05:50.560 do that. So there's a layer of kind of compliance 0:05:50.600 --> 0:05:53.080 there that says, okay, it's a passive strategy, it's going 0:05:53.120 --> 0:05:55.760 to stay that way. And then our index committee also 0:05:56.000 --> 0:05:59.080 access to checks and balances on you know, myself and 0:05:59.120 --> 0:05:59.920 the indexes. 0:06:00.640 --> 0:06:02.440 When I look at this fund and I compared to 0:06:02.480 --> 0:06:05.560 EEM or the Emerging Markets benchmark, which is what a 0:06:05.560 --> 0:06:07.360 lot of people own, So this is what a lot 0:06:07.360 --> 0:06:10.320 of people own, it looks like there's about forty forty 0:06:10.360 --> 0:06:13.880 five percent difference. It looks like, for example, if you 0:06:13.920 --> 0:06:17.040 screen out China already, you just take twenty five percent 0:06:17.120 --> 0:06:20.479 out of your portfolio. Then you've got Russia you screen out, 0:06:20.880 --> 0:06:22.560 Then you've got a couple of Middle East countries like 0:06:22.560 --> 0:06:25.440 Saudi Arabia and a handful of others. So I get 0:06:25.440 --> 0:06:27.719 to around forty percent, So that gives you forty percent 0:06:27.800 --> 0:06:31.359 budget to spend on these other countries which you overweight, 0:06:31.800 --> 0:06:35.960 as you said earlier, Taiwan, South Korea, Chile, Poland. What 0:06:36.800 --> 0:06:40.520 is driving the performance here is that those countries they're 0:06:41.080 --> 0:06:45.479 more free and that has actually caught the investors' attention 0:06:45.920 --> 0:06:48.760 and the outperformance of those countries. Or is it that 0:06:48.800 --> 0:06:52.480 investors look at these less free countries and are turned off. 0:06:53.800 --> 0:06:56.919 So yeah, it's both, And you know, a country attribution 0:06:57.200 --> 0:07:01.680 would account for countries what account for about eighty three 0:07:01.760 --> 0:07:06.080 to eighty four percent of the outperformance attribution in the 0:07:06.120 --> 0:07:10.480 strategy in the past several years. Not having exposure to 0:07:10.600 --> 0:07:13.400 Russia when Russia went into a war, not having exposure 0:07:13.440 --> 0:07:17.240 to China when it all melted down, that really helped. 0:07:17.280 --> 0:07:21.040 But it's really these out you know, out performing smaller 0:07:21.080 --> 0:07:24.320 countries that are not very high weights in the other 0:07:24.360 --> 0:07:26.960 indices that have really helped as well. And you know, 0:07:27.000 --> 0:07:29.800 we do do that kind of country screening before the 0:07:29.840 --> 0:07:33.520 freedom screening, where we look at a country market cap 0:07:34.360 --> 0:07:36.960 as in relation to world market caps. So these are 0:07:36.960 --> 0:07:39.760 countries that we have deemed to be large enough and 0:07:39.800 --> 0:07:43.600 liquid enough to be included in a you know, exchange 0:07:43.600 --> 0:07:46.880 traded product, but they are you know, less than one 0:07:46.880 --> 0:07:50.200 percent in the cap weighted induses like the MESI in 0:07:50.240 --> 0:07:52.760 footzy industy. So for example Chile and Poland, they're both 0:07:52.840 --> 0:07:56.400 less than one percent in the other induses. So you know, 0:07:56.480 --> 0:07:59.720 investors have in those in the cap weighted strategies have 0:07:59.760 --> 0:08:04.440 really missed out on some of these higher growth, smaller 0:08:04.480 --> 0:08:07.240 countries that are actually big enough to trade, it's just 0:08:07.240 --> 0:08:10.440 not big enough for maybe their product, but or in 0:08:10.480 --> 0:08:13.240 the cap waight at strategies are some much bigger countries. 0:08:13.360 --> 0:08:16.720 So I'd say there's just been so much opportunity to 0:08:16.720 --> 0:08:19.880 be captured in the freer emerging markets, and so happy 0:08:19.880 --> 0:08:22.440 that we were able to capture some of that. 0:08:22.600 --> 0:08:24.720 So do you think it's more because of what you 0:08:24.760 --> 0:08:27.480 own or what you don't own? 0:08:27.920 --> 0:08:30.480 It's more what we own, but what we don't own 0:08:30.720 --> 0:08:34.280 definitely helped as well. Eighty three to eighty four percent 0:08:34.320 --> 0:08:38.880 of the attributable outperformance is country selection. 0:08:46.960 --> 0:08:49.360 So when you were starting off, I remember, I think 0:08:49.400 --> 0:08:51.319 you were literally knocking on doors, like I think you 0:08:51.360 --> 0:08:54.720 said you were going around the neighborhoods in Houston knocking 0:08:54.760 --> 0:08:57.520 on doors and talking about your fund, and you probably 0:08:57.600 --> 0:09:01.000 knew the investors in the fund at first. Then you 0:09:01.040 --> 0:09:02.959 get this shiny object moment, and now this thing is 0:09:03.000 --> 0:09:04.360 taken in money, hand over fist. 0:09:04.760 --> 0:09:06.800 I think it's up to almost three billion dollars. 0:09:07.240 --> 0:09:09.560 It's taken in like weekly flows for the past six 0:09:09.600 --> 0:09:12.000 weeks something like that, and the flows are getting thicker. 0:09:12.000 --> 0:09:14.319 We're talking like one hundred and fifty two million, three 0:09:14.400 --> 0:09:17.240 hundred million a week. So the fish are jumping in 0:09:17.240 --> 0:09:21.480 the boat, so to speak. Are you interacting with these 0:09:21.520 --> 0:09:24.000 people or are you just sitting there going like wow, like, 0:09:24.040 --> 0:09:26.400 where's all this money coming from? How does that work? 0:09:26.440 --> 0:09:29.800 From knowing the investors in an intimate way to sort 0:09:29.840 --> 0:09:32.240 of I guess blowing up is the right word here. 0:09:32.600 --> 0:09:35.520 And then all of a sudden, you've got way more investors. 0:09:36.400 --> 0:09:38.600 Do you know who they are? Do they talk to you? 0:09:39.120 --> 0:09:40.240 Has your life changed? 0:09:40.320 --> 0:09:44.280 Have you, you know, splurged on any nice cars or anything? 0:09:47.200 --> 0:09:49.640 Yeah? I mean you gave me this, this super lay 0:09:49.720 --> 0:09:51.400 up question chrying to get me to be happy and 0:09:51.440 --> 0:09:54.520 in the moment when we were on ETFIQ the other day, 0:09:54.559 --> 0:09:57.760 and I totally blew it by instead highlighting all our 0:09:57.760 --> 0:10:00.920 periods of underperformance because I just refused to be in 0:10:00.960 --> 0:10:04.360 the moment, And so I will I will re answer 0:10:04.440 --> 0:10:08.760 that question now. Yes, my life is is different, but 0:10:08.800 --> 0:10:10.800 it's not that different, you know. We I do have 0:10:11.040 --> 0:10:13.840 a slightly nicer card. I literally traded it, you know, 0:10:15.000 --> 0:10:16.920 X one for an xtram is literally like not a 0:10:17.000 --> 0:10:19.800 huge difference, just because I drive around a bunch of teenagers. 0:10:21.120 --> 0:10:23.560 I don't you know. My house is the same. I 0:10:23.600 --> 0:10:26.480 haven't changed things that much. This is something that happened 0:10:26.600 --> 0:10:31.520 very quickly over the last year. We like tripled our assets. 0:10:32.760 --> 0:10:35.120 And yes, I do remember those early days. And I 0:10:35.120 --> 0:10:37.640 actually missed those early days. And I was knocking on doors, 0:10:37.640 --> 0:10:40.400 not you know, in Houston, because you know I was, 0:10:40.440 --> 0:10:43.040 I was. I didn't know a lot of finance people 0:10:43.080 --> 0:10:45.880 here except the Fidelity guys, which you know, they couldn't 0:10:46.040 --> 0:10:49.600 do something like this at the time. I was knocking 0:10:49.600 --> 0:10:51.959 on doors at ETF conferences. I don't know if you remember, 0:10:52.400 --> 0:10:55.520 you know, meeting you at like ETF dot com inside 0:10:55.559 --> 0:10:58.000 ECF twenty eighteen, getting you to you know, sign your 0:10:58.040 --> 0:10:59.880 book or maybe that was twenty fifteen, I don't know, 0:11:00.960 --> 0:11:03.120 and just you know, saying hello to all the like 0:11:03.360 --> 0:11:06.480 networking with all the issuers, trying to get somebody to 0:11:06.559 --> 0:11:09.400 launch the thing, and then nobody would do it, and 0:11:09.400 --> 0:11:11.160 then finally somebody said they would do it, and then 0:11:11.240 --> 0:11:15.800 after a conference at inside ETS they backed out. It 0:11:15.880 --> 0:11:19.040 was the most you know, the worst into a conference ever, 0:11:19.200 --> 0:11:21.600 you know, So it was a lot of that and 0:11:21.640 --> 0:11:24.160 I remember those days, and I actually missed the time 0:11:24.200 --> 0:11:26.360 when I had to struggle to get assets, when I 0:11:26.400 --> 0:11:29.880 had to you know, convince people that it's not crazy 0:11:29.960 --> 0:11:32.520 to not have China, not crazy to have a bunch 0:11:32.559 --> 0:11:36.360 of Chilian, Poland in a fund for emerging markets. I 0:11:36.520 --> 0:11:39.280 like being the contrarian and like the only voice in 0:11:39.280 --> 0:11:41.920 the room saying something. So now it feels a little 0:11:42.000 --> 0:11:45.320 less original and I feel like I'm saying the same 0:11:45.360 --> 0:11:48.200 thing over and over. But I'm but I have no 0:11:48.240 --> 0:11:51.280 complaints that absolutely, I'm thrilled with how this has turned out. 0:11:51.720 --> 0:11:52.679 She's like Warren Buffett. 0:11:52.679 --> 0:11:54.280 She could have the same house in ten years and 0:11:54.400 --> 0:11:56.720 just just to make a point and drink cherry Coke 0:11:56.840 --> 0:12:00.920 like all right anyway, By the way, in my opinion, 0:12:01.120 --> 0:12:05.439 is the most punk rock person in the wholegf industry. 0:12:05.720 --> 0:12:07.600 I always said when she comes on stage, it should 0:12:07.640 --> 0:12:10.400 be too straight out of Compton from NWA. It just 0:12:10.480 --> 0:12:13.680 suit or public enemy, something like that. There's something very 0:12:13.720 --> 0:12:16.560 rebellious about what she's saying. Most of these other issuers 0:12:16.600 --> 0:12:19.920 won't touch China. She will criticize it, and as we 0:12:20.000 --> 0:12:23.560 know from following other news events, no one does. And 0:12:23.760 --> 0:12:27.760 it's risky to be out there like that, and I 0:12:27.800 --> 0:12:30.720 give her credit for that. It's there's something that always 0:12:30.720 --> 0:12:33.079 interested me for somebody who was willing to sort of 0:12:33.120 --> 0:12:35.280 go a little further out in the branch on any 0:12:35.320 --> 0:12:38.520 issue in this particular case, it was criticizing some of 0:12:38.559 --> 0:12:44.720 these dictators and authoritarian countries in a way other people 0:12:44.760 --> 0:12:48.280 would not. And you know, other people even have products 0:12:48.760 --> 0:12:51.160 that exclude certain countries, but they won't say a word. 0:12:51.520 --> 0:12:53.560 It's just very interesting. Do you have any comment on that. 0:12:54.080 --> 0:12:56.800 Yeah, so it's hard to speak out against autocracies, right. 0:12:56.840 --> 0:12:59.719 I think I have an easier position for that, just 0:12:59.760 --> 0:13:02.720 because because I have actual experience in the country. You know, 0:13:02.800 --> 0:13:05.240 I'm actually I've born there. I came here at the 0:13:05.240 --> 0:13:07.960 age of nine, I went back after college, lived in 0:13:07.960 --> 0:13:11.680 Hong Kong and traveled throughout mainland China. Had you know, 0:13:12.080 --> 0:13:14.880 personal experience with friends under the one child policy who 0:13:14.920 --> 0:13:18.120 had no name, no birth certificate, no school records, just 0:13:18.120 --> 0:13:20.160 because they were born a girl, and know that they're 0:13:20.160 --> 0:13:22.439 the lucky ones. You know, there's sixty million missing women 0:13:22.440 --> 0:13:25.680 missing in China in my generation. That's not something that 0:13:25.720 --> 0:13:29.640 you can easily replace. So I think I have a 0:13:29.640 --> 0:13:32.800 lot of more front roads experience, and so that gives 0:13:32.840 --> 0:13:37.440 me a little more I guess credibility on the subject 0:13:37.679 --> 0:13:42.240 that if you know, let's say, head of some big 0:13:42.280 --> 0:13:44.880 firm in the US said something, it might not go 0:13:45.080 --> 0:13:49.000 over as well. But yeah, I think freedom of speech 0:13:49.040 --> 0:13:51.880 is important, freedom of medium is important, and so I'm 0:13:51.920 --> 0:13:55.400 happy to most of the times say what I think 0:13:55.440 --> 0:13:57.160 is true. 0:13:56.760 --> 0:14:02.520 So we've actually seen off a fair amount of democratic 0:14:03.320 --> 0:14:05.920 backsliding throughout the rest of the world and the rise 0:14:05.960 --> 0:14:09.280 of populism and developed markets. And this is since we 0:14:09.360 --> 0:14:12.439 talked to you last even I'm curious how you're looking 0:14:12.440 --> 0:14:16.480 at at that and is there another opportunity for I'll 0:14:16.520 --> 0:14:19.800 call it a sophomore album from Perthle that's not about 0:14:19.840 --> 0:14:22.320 emerging markets but might be more about the developed world. 0:14:23.760 --> 0:14:25.840 So you know, you know what's interesting. So right now 0:14:26.920 --> 0:14:31.120 we are getting we are getting demand from global global 0:14:31.120 --> 0:14:35.160 investors from all over the world for the emerging markets product, 0:14:35.320 --> 0:14:37.280 and so there are people that are now trying to 0:14:37.280 --> 0:14:41.240 package the product for their own you know, currencies and 0:14:41.800 --> 0:14:44.400 in a way that their clients can invest in a 0:14:44.440 --> 0:14:48.640 tax efficient manner. And then in the US we're getting 0:14:48.640 --> 0:14:53.080 more requests for developed market products. So developed markets, you know, 0:14:53.360 --> 0:14:57.640 there's not as much divergence and freedom levels. It's more 0:14:57.640 --> 0:15:02.520 homogeneous and they're all relative high in freedom levels. So 0:15:02.520 --> 0:15:05.560 the thing that I've noticed with the with the rise 0:15:05.560 --> 0:15:08.840 of populism around the world is that in some of 0:15:08.880 --> 0:15:11.880 these emerging markets, which is what I've been watching. When 0:15:11.880 --> 0:15:14.880 we see that happening, the checks and balances and the 0:15:14.880 --> 0:15:18.440 institutions in the freer ones do prove to be strong. 0:15:18.560 --> 0:15:20.680 You know, voters come out and drove to vote in 0:15:21.040 --> 0:15:23.880 you know, more balanced government in countries like Chile and 0:15:23.920 --> 0:15:28.560 poland recently South Korea just jailed their you know, ex 0:15:28.600 --> 0:15:32.440 president for life for unilaterally declaring martial law one day. 0:15:33.560 --> 0:15:36.560 You know, these types of checks and balances and stronger 0:15:36.560 --> 0:15:40.040 institutions in civil society is what I'm what I'm seeing 0:15:40.160 --> 0:15:44.280 happening in the freer EMS and then d MS, Yes 0:15:44.360 --> 0:15:46.840 there is. I do see that there's a little more 0:15:46.840 --> 0:15:49.480 opportunity than the before, as there is a little more 0:15:49.520 --> 0:15:52.840 divergence than before with the rise of populism, But a 0:15:52.840 --> 0:15:54.760 lot of that rise of populism is also happening in 0:15:54.800 --> 0:15:58.960 the smaller d ms or in the in the larger EMS. 0:15:59.480 --> 0:16:02.320 Let me this real quick, because I think people in 0:16:02.400 --> 0:16:05.280 the US were so spoiled with all our freedom that 0:16:05.440 --> 0:16:08.920 like the tiniest little thing which is like no big deal. 0:16:08.960 --> 0:16:13.240 People like freedom of speech is dead and it's like okay, relax, 0:16:14.000 --> 0:16:17.560 can you help I guess give context or perspective to 0:16:17.640 --> 0:16:21.480 people who might think, oh my god, the US probably 0:16:21.640 --> 0:16:26.520 it would wouldn't make her screening process. Now that's absurd, right. 0:16:27.960 --> 0:16:30.880 It is. I'm gonna I'm gonna push back on that, 0:16:30.920 --> 0:16:34.720 little Eric, So, yes, that is absolutely absurd. US is, 0:16:34.920 --> 0:16:36.720 you know, number fifteen out of one hundred and sixty 0:16:36.720 --> 0:16:39.960 five countries on the you know, Human Freedom Index by 0:16:40.000 --> 0:16:44.240 Cato and Fraser, So you know, are that's on par 0:16:44.360 --> 0:16:46.840 with our top ems that are included in the fund. 0:16:47.200 --> 0:16:50.160 So yeah, it's it definitely would not be an exclusion 0:16:50.560 --> 0:16:53.880 if we did something right. So that's not even a possibility. 0:16:53.920 --> 0:16:56.440 And it's just so far from you know, the lower 0:16:56.520 --> 0:16:59.080 scoring countries like like you know, China, Saudi Arabia and 0:16:59.080 --> 0:17:01.960 so forth, where you say something and you can literally 0:17:02.080 --> 0:17:05.360 be disappeared for it, or your famili's disappeared, you know overnight, 0:17:05.480 --> 0:17:08.080 or your IPO is scrapped or you know, you're now 0:17:08.119 --> 0:17:12.439 a nonprofit you know. So that's that's completely like a 0:17:12.440 --> 0:17:18.120 different universe. But the latest report from Cato and Fraser 0:17:18.240 --> 0:17:21.119 did come out and say that the US's score is 0:17:21.160 --> 0:17:25.480 expected to decline because of things like government interference in 0:17:25.680 --> 0:17:28.399 private market activity, so like government taking stakes in private 0:17:28.400 --> 0:17:31.280 companies and things like the tariffs. Now I don't know 0:17:31.320 --> 0:17:33.400 if that's going to be different now that the terrors 0:17:33.400 --> 0:17:37.000 have been shot down, which does show some checks and balances, 0:17:37.680 --> 0:17:41.560 and whether that will last. So that that is, you know, 0:17:41.600 --> 0:17:45.879 some of the more protectionists policies on trade and the 0:17:45.960 --> 0:17:52.000 interference the size of government in private markets. The score 0:17:52.040 --> 0:17:54.040 for the US is expected to decrease, but you know, 0:17:54.080 --> 0:17:57.000 the the decrease in score doesn't mean it's not it's 0:17:57.000 --> 0:18:00.359 not like a drastic situation. It's just, hey, work's affecting 0:18:00.480 --> 0:18:03.240 something here. And those are two variables that I mentioned 0:18:03.280 --> 0:18:08.080 out of eighty seven. So yeah, there are some concerns, 0:18:08.119 --> 0:18:10.960 and I think it's good for people in a freer 0:18:11.000 --> 0:18:17.040 market to be very vigilant, maybe hypervigilant, because you know, yeah, 0:18:17.080 --> 0:18:21.080 freedom is it's a very uh, it's a fragile thing. 0:18:29.240 --> 0:18:33.080 Because you're watching the Cato and the Fraser indexes so closely. 0:18:33.680 --> 0:18:38.240 I'm wondering if you think there's another emerging market that 0:18:38.400 --> 0:18:41.560 might be approaching something of a breakout moment. Since we've 0:18:41.560 --> 0:18:45.840 talked about South Korea and Taiwan and Chile and Poland, 0:18:45.880 --> 0:18:49.120 like those are some somewhat expected, I guess, are there anybody? 0:18:49.359 --> 0:18:52.480 Is there anybody who's unexpected that you're you know, got 0:18:52.480 --> 0:18:53.159 your eye trained on. 0:18:55.760 --> 0:18:59.320 So a lot of these countries that are geographically close 0:18:59.400 --> 0:19:02.840 to very on free markets are getting an influx of 0:19:03.240 --> 0:19:07.880 human capital. So countries like Colombia getting a lot of 0:19:08.880 --> 0:19:13.359 immigrants from Venezuela for example, a lot of migration there. 0:19:13.560 --> 0:19:17.160 Countries like Poland getting a lot of migration from Ukraine. 0:19:18.080 --> 0:19:20.920 So these are countries that are benefiting from this kind 0:19:20.960 --> 0:19:24.160 of freedom of movement that is coming into their country 0:19:24.200 --> 0:19:27.399 from very unfree markets that will show up in the 0:19:27.480 --> 0:19:32.480 long run. In the short run, actually, India, their population 0:19:32.720 --> 0:19:36.000 just surpassed China's. India is a country that in our 0:19:36.040 --> 0:19:38.440 index goes in and out from year to year quite 0:19:38.440 --> 0:19:41.119 often just because they're right at the average of the 0:19:41.160 --> 0:19:46.640 emerging market eligible Universe peers. And so they are out 0:19:46.640 --> 0:19:49.600 this year, they were in last year. And they've historically, 0:19:49.720 --> 0:19:53.399 as we mentioned, had very high trade protections tariffs and 0:19:53.400 --> 0:19:56.800 non tariff trade barriers that has weighed on their economic 0:19:56.800 --> 0:20:00.280 freedom score and had some other issues on the personal 0:20:00.320 --> 0:20:02.520 freedom side as well, like freedom of media, like they 0:20:02.600 --> 0:20:05.600 you know rated Modi's when they did VBC did the 0:20:06.240 --> 0:20:08.880 story on MODI, they rated their offices, you know, things 0:20:08.920 --> 0:20:11.960 like that. So there's issues and they come in and out. 0:20:12.040 --> 0:20:15.679 But the population growth is undeniable, and you know, demographics 0:20:16.000 --> 0:20:18.760 our destiny, so especially in emerging markets. So I'm very 0:20:18.760 --> 0:20:23.359 bullish on them. Now, my opinion does not factor into 0:20:23.440 --> 0:20:26.440 the methodology whatsoever. So that's just my opinion. 0:20:26.119 --> 0:20:28.720 On that, Okay. And what about the Middle East, because 0:20:28.760 --> 0:20:31.840 there's been so much kind of deal making over there, 0:20:32.160 --> 0:20:37.200 and we're talking like, you know, big, big, big numbers. 0:20:37.720 --> 0:20:40.840 Is there anything there that feels like it's something to 0:20:40.920 --> 0:20:44.560 watch or or do? The rules just simply mean there's 0:20:44.640 --> 0:20:47.639 few and far between as opportunities to go. 0:20:48.440 --> 0:20:50.639 Yeah. So the Middle East is interesting because if I 0:20:50.720 --> 0:20:55.159 did only economic freedom, they would score actually quite high. 0:20:55.280 --> 0:20:58.840 Countries like Saudi Arabia, cutter UAE. These are countries that 0:20:58.880 --> 0:21:01.760 score very high on eco nomic freedom. But because our 0:21:02.160 --> 0:21:05.399 data set uses both personal and economic freedoms, so civil, 0:21:05.400 --> 0:21:08.600 political and economic, and the personal freedom is half of 0:21:08.720 --> 0:21:13.200 the overall you know score, they are actually scoring quite 0:21:13.240 --> 0:21:18.160 low just because the majority of that being there very 0:21:18.160 --> 0:21:23.680 bad women's rights in these countries and freedom of women's speech, expression, etc. 0:21:24.040 --> 0:21:26.960 So in these these countries are also very oil rich, 0:21:27.000 --> 0:21:34.040 They're very resource rich, but without the diversification of industries 0:21:34.040 --> 0:21:36.000 that you see in some of the freer markets. 0:21:36.480 --> 0:21:40.680 Eric brought up your the tremendous inflows that you've you've 0:21:40.720 --> 0:21:43.480 seen over the last You've made it sound like it's 0:21:43.480 --> 0:21:46.720 really been within the last year or so. I'm curious 0:21:47.080 --> 0:21:49.840 what what do you feel like you can attribute that to. 0:21:50.000 --> 0:21:55.560 Has it really been about American investors looking for international opportunities? 0:21:56.119 --> 0:21:59.719 Is it the sell America idea? Is it is it 0:22:00.119 --> 0:22:02.720 just a reaction to Trump or or is it is 0:22:02.760 --> 0:22:05.200 it performance chasing or something else. 0:22:06.200 --> 0:22:09.159 Yeah, I think it's a confluence of factors. I agree 0:22:09.200 --> 0:22:13.080 with Eric that I don't think sell America is like sustainable, 0:22:13.960 --> 0:22:16.800 but I think that there is a higher you know, 0:22:16.880 --> 0:22:20.320 there has been a performance rotation between the US and 0:22:20.800 --> 0:22:24.320 developed markets and emerging markets, so you know, both developed 0:22:24.359 --> 0:22:26.960 and emerging markets outperformed the US last year for the 0:22:26.960 --> 0:22:29.879 first time in forever. So I think there's been some 0:22:29.960 --> 0:22:36.040 attention to diversification. And if emerging markets, for example, were 0:22:36.040 --> 0:22:38.439