1 00:00:05,519 --> 00:00:06,240 Speaker 1: Well, CNA trillions. 2 00:00:06,280 --> 00:00:11,480 Speaker 2: I'm Joel Webber and I'm Eric Alchunas. 3 00:00:11,640 --> 00:00:14,360 Speaker 1: He sounds like you've maybe even a little sick. Something's 4 00:00:14,520 --> 00:00:15,200 Speaker 1: off in your voice. 5 00:00:15,440 --> 00:00:18,040 Speaker 2: Yeah, I got a I caught something probably from my youngest. 6 00:00:18,200 --> 00:00:19,840 Speaker 2: Who knows what these kids bring home. But I was 7 00:00:20,320 --> 00:00:22,280 Speaker 2: kind of down for the count for about forty eight hours. 8 00:00:22,760 --> 00:00:25,280 Speaker 2: And then I love that feeling when your immune system 9 00:00:25,360 --> 00:00:28,240 Speaker 2: starts to take the lead and you're like, oh, yeah, here, right, 10 00:00:28,240 --> 00:00:33,040 Speaker 2: here we come. And then I also had some antibiotics 11 00:00:33,120 --> 00:00:35,600 Speaker 2: left over from the dentist. It's like dropping bombs on 12 00:00:35,640 --> 00:00:35,960 Speaker 2: that thing. 13 00:00:36,080 --> 00:00:40,519 Speaker 1: Okay, well, welcome back in Happy twenty twenty five because 14 00:00:40,520 --> 00:00:43,800 Speaker 1: it's still new in the year and I know predictions 15 00:00:43,800 --> 00:00:46,720 Speaker 1: are a thing and the market has not been off 16 00:00:46,760 --> 00:00:48,599 Speaker 1: to a great start, but it felt like a good 17 00:00:48,680 --> 00:00:52,720 Speaker 1: moment to actually still talk about what might happen with 18 00:00:52,760 --> 00:00:53,600 Speaker 1: the little crystal ball. 19 00:00:54,120 --> 00:00:58,120 Speaker 2: Yeah, everybody has predictions in the cell sid It's like, oh, 20 00:00:58,160 --> 00:00:59,840 Speaker 2: the market has a forty per chance of going up, 21 00:00:59,880 --> 00:01:03,080 Speaker 2: and it's also opaque, and I don't know, it's like safe. 22 00:01:03,480 --> 00:01:05,200 Speaker 2: There's a couple of people out there that make very 23 00:01:05,200 --> 00:01:08,200 Speaker 2: specific predictions and they end up going back and like 24 00:01:08,280 --> 00:01:10,960 Speaker 2: saying was I right or wrong? I love that because 25 00:01:11,000 --> 00:01:12,200 Speaker 2: you don't get that a lot from a lot of 26 00:01:12,200 --> 00:01:16,120 Speaker 2: the prognosticators out there. This guy, Nate jerrasi from the 27 00:01:16,120 --> 00:01:19,800 Speaker 2: ETF Store, fellow ETF nerd veteran of the industry, has 28 00:01:19,840 --> 00:01:24,560 Speaker 2: five predictions every year, and he these are really interesting predictions. 29 00:01:24,600 --> 00:01:26,840 Speaker 2: I agree with three of the five, only Joel, but 30 00:01:27,240 --> 00:01:29,199 Speaker 2: I think it's gonna be fun to unpack these because 31 00:01:29,240 --> 00:01:31,640 Speaker 2: they all really tap into some huge themes that we're 32 00:01:31,640 --> 00:01:33,080 Speaker 2: probably gonna cover us of the year as well. 33 00:01:33,400 --> 00:01:36,840 Speaker 1: So joining us on this episode Nate Jersey, president of 34 00:01:37,520 --> 00:01:41,360 Speaker 1: the ETF Store. He's also the host of ETF Prime, 35 00:01:41,520 --> 00:01:46,480 Speaker 1: another ETF podcast, as well as Vildonna Hirich of Bloomberg News. 36 00:01:46,800 --> 00:01:51,919 Speaker 1: She's a crossasser reporter. This time on Trillions. Nate Jerrasey's 37 00:01:52,040 --> 00:01:58,360 Speaker 1: predictions for twenty twenty five. Nate, Vildona, Welcome to Trillions. 38 00:01:58,720 --> 00:02:01,440 Speaker 3: Thanks for having us, a pleasure to be here. 39 00:02:01,640 --> 00:02:05,560 Speaker 1: Okay, so, Nat, you've been doing predictions since twenty eighteen. 40 00:02:06,120 --> 00:02:10,440 Speaker 1: According to this little helpful memo, you started really strong, 41 00:02:10,560 --> 00:02:13,280 Speaker 1: you were like five for five, but then last year, 42 00:02:14,120 --> 00:02:16,120 Speaker 1: well ever since then, things have been kind of trending. 43 00:02:16,160 --> 00:02:20,920 Speaker 1: Downward and last year one for five. Why should we 44 00:02:20,960 --> 00:02:22,799 Speaker 1: listen to you in your predictions. 45 00:02:23,440 --> 00:02:25,880 Speaker 4: Well, first of all, I will say, from twenty eighteen 46 00:02:25,919 --> 00:02:28,840 Speaker 4: to twenty twenty two, I went nineteen for twenty four 47 00:02:28,919 --> 00:02:31,480 Speaker 4: or twenty five, which is pretty darn good. You're right. 48 00:02:31,560 --> 00:02:35,240 Speaker 4: The past two years have been brutal overall. Actually I've 49 00:02:35,240 --> 00:02:38,440 Speaker 4: gone two for ten though, I will say, and Eric 50 00:02:38,520 --> 00:02:40,720 Speaker 4: knows this, I did predict last year that spot Bitcoin 51 00:02:40,720 --> 00:02:44,080 Speaker 4: ETFs would obliterate every single ATF launch record, which I 52 00:02:44,120 --> 00:02:46,320 Speaker 4: clearly nailed out one that should be worth at least 53 00:02:46,320 --> 00:02:48,880 Speaker 4: an extra point or two. But Joel, I feel good 54 00:02:48,919 --> 00:02:50,440 Speaker 4: this year. I'm ready to get back on track. 55 00:02:50,480 --> 00:02:54,560 Speaker 1: Okay, Well, past performance not indicative of future performances. As 56 00:02:54,600 --> 00:02:57,160 Speaker 1: we know. Eric tell us about Nate because you go 57 00:02:57,240 --> 00:03:00,240 Speaker 1: on his podcast a lot, right, Like, what statue does 58 00:03:00,240 --> 00:03:01,079 Speaker 1: he have in the industry? 59 00:03:01,560 --> 00:03:03,400 Speaker 2: Well, I met him because I heard there was this 60 00:03:03,480 --> 00:03:06,799 Speaker 2: like radio show about ETFs that was delivered through ESPN 61 00:03:06,919 --> 00:03:09,280 Speaker 2: Radio or something, and this was back in like two 62 00:03:09,320 --> 00:03:12,560 Speaker 2: thousand and nine when it was very nascent industry, and 63 00:03:12,639 --> 00:03:14,760 Speaker 2: I listened to it and it opens with the who's 64 00:03:14,960 --> 00:03:17,400 Speaker 2: won't get fooled again? You know that it's a great intro, 65 00:03:18,080 --> 00:03:19,880 Speaker 2: and I was like, who are these guys? And they 66 00:03:20,080 --> 00:03:22,960 Speaker 2: they would they came in from like the Midwest, and 67 00:03:23,000 --> 00:03:25,560 Speaker 2: they would they would go back and forth about ETFs, 68 00:03:25,600 --> 00:03:27,640 Speaker 2: and I was like, Oh, this is great. But what 69 00:03:27,800 --> 00:03:30,240 Speaker 2: made them extra level was they are managing money. 70 00:03:30,280 --> 00:03:32,120 Speaker 5: They are advisors, so. 71 00:03:32,080 --> 00:03:37,840 Speaker 2: They have that interaction with the actual investor, which to 72 00:03:37,920 --> 00:03:41,880 Speaker 2: me helps their opinion of ETF's actually resonate more. And 73 00:03:41,920 --> 00:03:45,240 Speaker 2: so I think both of us, in separate places, me 74 00:03:45,280 --> 00:03:48,320 Speaker 2: and Philadelphia, him and Kansas City sort of like saw 75 00:03:48,360 --> 00:03:50,560 Speaker 2: the ETF as being a big deal, you know, early, 76 00:03:51,000 --> 00:03:54,040 Speaker 2: and so we had that sort of kindred spirit. And 77 00:03:54,040 --> 00:03:56,200 Speaker 2: then when I met him, it was obviously like you know, 78 00:03:56,880 --> 00:03:58,400 Speaker 2: mutual appreciation society. 79 00:03:58,880 --> 00:04:02,440 Speaker 1: All Right, Nate, you're gonna wan to drop your predictions 80 00:04:02,480 --> 00:04:05,000 Speaker 1: on us, and then we're gonna comment on them, and 81 00:04:05,040 --> 00:04:07,880 Speaker 1: we'll try and be friendly about it, but maybe critical too. 82 00:04:08,600 --> 00:04:08,720 Speaker 3: Uh. 83 00:04:08,960 --> 00:04:12,200 Speaker 1: Okay, let's hear your first prediction. Okay. 84 00:04:12,240 --> 00:04:15,400 Speaker 4: Prediction number one is that either the I Shares s 85 00:04:15,480 --> 00:04:18,279 Speaker 4: and P five hundred ETF TICK or IVV or the 86 00:04:18,400 --> 00:04:21,760 Speaker 4: Vanguard S and P five hundred ETF TICK or VO, 87 00:04:22,400 --> 00:04:25,960 Speaker 4: either one or both will chot fees this year in 88 00:04:26,000 --> 00:04:28,240 Speaker 4: an attempt to capture the ETF crown. 89 00:04:28,920 --> 00:04:32,279 Speaker 1: That ETF chrowme belongs to Spy. 90 00:04:32,240 --> 00:04:34,400 Speaker 4: The spider S and P five hundred ETF. 91 00:04:34,760 --> 00:04:37,799 Speaker 1: Okay, so within the S and P five hundred ETFs 92 00:04:37,839 --> 00:04:41,040 Speaker 1: you're predicting this is this is a year that it's 93 00:04:41,080 --> 00:04:43,760 Speaker 1: gonna get fierce, even fiercer. 94 00:04:45,520 --> 00:04:49,120 Speaker 4: Yeah. And look, people have predicted for several years, including myself, 95 00:04:49,120 --> 00:04:53,080 Speaker 4: that either IVV or VU would overtake SPY in assets. 96 00:04:53,120 --> 00:04:56,279 Speaker 4: But that's not my prediction here. I think that having 97 00:04:56,320 --> 00:05:00,800 Speaker 4: the largest ETF buy assets actually means something to these issuers. 98 00:05:01,080 --> 00:05:02,719 Speaker 4: And the way that I alloy out this prediction to 99 00:05:02,760 --> 00:05:05,960 Speaker 4: you is I spoke with Black Rocks Rachel Laguire back 100 00:05:05,960 --> 00:05:08,560 Speaker 4: in December and she told me that the I shares 101 00:05:08,560 --> 00:05:11,560 Speaker 4: Bitcoin ETF, which we can talk about crypto in a minute, 102 00:05:11,680 --> 00:05:13,640 Speaker 4: but she said that was attracting a lot of new 103 00:05:13,680 --> 00:05:17,839 Speaker 4: investors who were then actually looking at other I shares ETFs. 104 00:05:18,120 --> 00:05:21,120 Speaker 4: So in other words, the bitcoin ETF was serving as 105 00:05:21,160 --> 00:05:24,599 Speaker 4: like a magnet to bring in investors who then bought 106 00:05:24,680 --> 00:05:28,000 Speaker 4: other I shares ETFs. I think it's a similar situation 107 00:05:28,360 --> 00:05:30,920 Speaker 4: with these S and P five hundred ETFs. Right if 108 00:05:30,960 --> 00:05:34,839 Speaker 4: an investor chooses, say IVV, I think they're much more 109 00:05:34,920 --> 00:05:37,760 Speaker 4: likely to look at other I shares ETFs, and the 110 00:05:37,800 --> 00:05:40,960 Speaker 4: issuers know this, And since these ETFs all do the 111 00:05:40,960 --> 00:05:43,080 Speaker 4: same thing, they invest in the S and P five hundred. 112 00:05:43,360 --> 00:05:45,599 Speaker 4: I think it really comes down to fees, And so 113 00:05:45,680 --> 00:05:47,640 Speaker 4: I think one of these issuers is going to chop 114 00:05:47,680 --> 00:05:50,480 Speaker 4: fees because they want that ETF crowd but want. 115 00:05:50,440 --> 00:05:54,120 Speaker 1: These back already, like just like barely existent, like they're 116 00:05:54,160 --> 00:05:55,240 Speaker 1: so cheap to begin with. 117 00:05:55,320 --> 00:05:58,440 Speaker 2: Yeah, they're three basis points. I don't think investors really 118 00:05:58,480 --> 00:06:01,400 Speaker 2: trust zero or want zero, but two or one maybe. 119 00:06:01,640 --> 00:06:04,640 Speaker 2: I think it has to be Blackrock. Vanguard probably doesn't 120 00:06:04,680 --> 00:06:07,760 Speaker 2: need to do it, and I've actually advised them, instead 121 00:06:07,760 --> 00:06:10,159 Speaker 2: of cutting fees anymore, put that money towards customer service 122 00:06:10,200 --> 00:06:11,920 Speaker 2: next time you have that extra profit that you need 123 00:06:11,960 --> 00:06:15,840 Speaker 2: to spend. But I could see Blackrock doing it in 124 00:06:15,880 --> 00:06:19,720 Speaker 2: your I think, so I agree with this probably, I 125 00:06:19,720 --> 00:06:20,640 Speaker 2: definitely agree. 126 00:06:20,360 --> 00:06:22,680 Speaker 5: That VU will take over a spy this year. 127 00:06:23,000 --> 00:06:25,760 Speaker 2: Right now, WU is ninety five percent of the way 128 00:06:25,800 --> 00:06:27,960 Speaker 2: to spy at the beginning of the year. Last year 129 00:06:27,960 --> 00:06:30,279 Speaker 2: it was ninety percent. It makes up five percent every year, 130 00:06:30,320 --> 00:06:32,599 Speaker 2: So do the math. It's probably going to pass it 131 00:06:32,600 --> 00:06:37,800 Speaker 2: this year. IVV probably can't catch VU in this because 132 00:06:37,839 --> 00:06:40,200 Speaker 2: they don't take in as much flows. So they to 133 00:06:40,279 --> 00:06:42,720 Speaker 2: me if they cut the fee, and you know Blackrock 134 00:06:42,839 --> 00:06:47,080 Speaker 2: is very motivated by beating Vanguard. I could see IVV 135 00:06:47,160 --> 00:06:50,679 Speaker 2: cutting the fee, then then he may see Vanguard tie. 136 00:06:51,040 --> 00:06:53,880 Speaker 2: I could see it. So I'm eighty percent I agree 137 00:06:53,880 --> 00:06:56,560 Speaker 2: with the fee cut. I'm one hundred percent that I 138 00:06:56,600 --> 00:06:58,279 Speaker 2: think VU will pass Spy this year. 139 00:06:59,000 --> 00:07:02,000 Speaker 4: A wildcard that's out there is SPLG, which is a 140 00:07:02,040 --> 00:07:04,720 Speaker 4: spider portfolios and P five hundred ETF, so we call 141 00:07:04,800 --> 00:07:08,440 Speaker 4: this mini Spy and its expense ratio is only two 142 00:07:08,480 --> 00:07:12,640 Speaker 4: basis points, so it's actually cheaper than both IVV and VU, 143 00:07:12,840 --> 00:07:15,160 Speaker 4: and it finished in the top ten of ETF inflows 144 00:07:15,240 --> 00:07:17,360 Speaker 4: last year. I just don't think that I shares in 145 00:07:17,440 --> 00:07:21,560 Speaker 4: Vanguard like a competitor being out there who is lower cost. 146 00:07:22,040 --> 00:07:24,320 Speaker 4: The other thing I'll mention, I agree with you Eric 147 00:07:24,320 --> 00:07:28,200 Speaker 4: in terms of Vanguard allocating money towards technology and customer service. 148 00:07:28,240 --> 00:07:31,640 Speaker 4: But that Vanguard flywheel, it's like they can't help themselves. 149 00:07:31,720 --> 00:07:31,840 Speaker 1: Right. 150 00:07:31,880 --> 00:07:34,640 Speaker 4: We know that as their funds grow that allows them 151 00:07:34,640 --> 00:07:37,520 Speaker 4: to further leverage their back office economies of scale. That 152 00:07:37,560 --> 00:07:39,360 Speaker 4: allows them to run the fund even cheaper, and then 153 00:07:39,360 --> 00:07:42,760 Speaker 4: they pass those savings on to investors. With Vanguard's mutual 154 00:07:42,800 --> 00:07:45,480 Speaker 4: ownership structure. I just think you have to assume that 155 00:07:45,600 --> 00:07:48,800 Speaker 4: as VU grows, they're going to reach a point where 156 00:07:48,840 --> 00:07:50,400 Speaker 4: investors will get a fee cut. I think it's a 157 00:07:50,440 --> 00:07:52,840 Speaker 4: matter of time. So maybe I'm cheating a little bit 158 00:07:52,880 --> 00:07:55,160 Speaker 4: with this prediction because I just think that's going to happen. 159 00:07:55,480 --> 00:07:58,120 Speaker 2: My only counter to that is they're really pushing their 160 00:07:58,160 --> 00:08:00,840 Speaker 2: active move because they were late, and they may choose 161 00:08:00,880 --> 00:08:03,000 Speaker 2: to use that to cut the fees on those funds 162 00:08:03,560 --> 00:08:07,440 Speaker 2: to be the cheapest vandguard Vanguard. Yeah, but again we'll 163 00:08:07,440 --> 00:08:09,960 Speaker 2: see if black Rock cuts. I just I could see 164 00:08:10,080 --> 00:08:14,600 Speaker 2: Vanguard responding. But again, we're at three already, maybe two. 165 00:08:15,280 --> 00:08:16,880 Speaker 2: I think once you get to one or zero, it 166 00:08:16,920 --> 00:08:19,280 Speaker 2: starts to look like gimmicky, Like the customer's almost like, 167 00:08:19,320 --> 00:08:23,040 Speaker 2: you know, I don't want to have be like I 168 00:08:23,040 --> 00:08:24,480 Speaker 2: don't want to pay nothing, because then I got to 169 00:08:24,480 --> 00:08:26,240 Speaker 2: worry about how you're going to like screw me somewhere else. 170 00:08:26,320 --> 00:08:27,720 Speaker 1: Phil Donna, what do you think? 171 00:08:27,920 --> 00:08:31,000 Speaker 3: I have a couple thoughts. One is just conversationally based, 172 00:08:31,040 --> 00:08:35,160 Speaker 3: Like if I'm talking to non market civilians. Maybe we 173 00:08:35,160 --> 00:08:37,400 Speaker 3: can call it like my high school friends. If they're 174 00:08:37,440 --> 00:08:40,240 Speaker 3: talking about the market, they say I'm buying vou like 175 00:08:40,280 --> 00:08:45,120 Speaker 3: they don't. I never hear IVV in conversations. But the 176 00:08:45,160 --> 00:08:48,600 Speaker 3: other point that Nate makes and his predictions is that 177 00:08:48,880 --> 00:08:51,880 Speaker 3: even if they do cut, one way for them to 178 00:08:51,920 --> 00:08:54,920 Speaker 3: offset is through securities lending, which a bunch of these 179 00:08:55,400 --> 00:08:59,760 Speaker 3: issuers do, maybe almost all of the issuers do, so 180 00:08:59,800 --> 00:09:02,880 Speaker 3: that it's one way for them to make up for 181 00:09:03,040 --> 00:09:05,840 Speaker 3: cutting the fees, which is really interesting. It's an interesting trend. 182 00:09:06,320 --> 00:09:10,680 Speaker 3: But if SBOG already is at point two, you know, 183 00:09:11,080 --> 00:09:13,400 Speaker 3: it's been like that for a while, why if change 184 00:09:13,559 --> 00:09:16,720 Speaker 3: or if for IVV wanted to cut, why haven't they yet. 185 00:09:16,800 --> 00:09:20,400 Speaker 1: Yeah? Yeah, so take that, Nate, Take that, Nate, Okay, 186 00:09:20,440 --> 00:09:32,360 Speaker 1: we'll see what happens. Okay. Prediction number two, Nate, Okay. 187 00:09:32,400 --> 00:09:34,720 Speaker 4: Prediction number two is that this will be the year 188 00:09:34,840 --> 00:09:38,440 Speaker 4: of crypto ETFs. Notice I'm not saying spot bitcoin ETFs. 189 00:09:38,440 --> 00:09:40,920 Speaker 4: That was twenty twenty four. I think twenty twenty five 190 00:09:40,920 --> 00:09:43,839 Speaker 4: will be the year of crypto ETFs. And I have 191 00:09:44,000 --> 00:09:46,720 Speaker 4: ten predictions. I won't go through all of these, but 192 00:09:46,760 --> 00:09:51,800 Speaker 4: they range everything from spots Salona ETFs will be approved 193 00:09:52,120 --> 00:09:56,320 Speaker 4: to Vanguard, will allow clients Brokeragje access to Spot Bitcoin 194 00:09:56,360 --> 00:10:00,480 Speaker 4: and ethere ETFs. Spot ethere ETF staking is a proved 195 00:10:00,920 --> 00:10:05,000 Speaker 4: It's really a cornucopia of predictions here that I think 196 00:10:05,040 --> 00:10:09,320 Speaker 4: all tie into a huge tailwind behind crypto ETFs. 197 00:10:10,200 --> 00:10:14,520 Speaker 1: So do you think to kind of summarize, are these 198 00:10:14,559 --> 00:10:17,320 Speaker 1: going to be coin specific ETFs or are we going 199 00:10:17,360 --> 00:10:21,160 Speaker 1: to start to see the indexing of crypto into a product. 200 00:10:22,040 --> 00:10:24,040 Speaker 4: I think it will be both. So I think we 201 00:10:24,080 --> 00:10:28,640 Speaker 4: will see spot Salona ETF's Spot XRP ETFs, their filings 202 00:10:28,679 --> 00:10:32,480 Speaker 4: from both Grayscale and Bitcoin for index based ETFs. I 203 00:10:32,480 --> 00:10:34,839 Speaker 4: think we're going to see everything, and I'll just tell 204 00:10:34,840 --> 00:10:38,160 Speaker 4: you in a nutshell, really, this is all one huge 205 00:10:38,240 --> 00:10:41,400 Speaker 4: bet on the Trump administration that they're actually going to 206 00:10:41,480 --> 00:10:45,480 Speaker 4: deliver on their campaign promise or the innuendo that we 207 00:10:45,559 --> 00:10:47,760 Speaker 4: heard that they're going to be pro crypto, and if 208 00:10:47,800 --> 00:10:50,839 Speaker 4: you look right now, the early indications are that they will. 209 00:10:51,120 --> 00:10:54,000 Speaker 4: Right we have Paul Atkins set to succeed Gary Gensler's 210 00:10:54,080 --> 00:10:59,240 Speaker 4: SEC chair. He's clearly viewed as being pro crypto. David Sachs, 211 00:10:59,640 --> 00:11:02,720 Speaker 4: who he runs a VC fund he's sought to be 212 00:11:02,840 --> 00:11:06,480 Speaker 4: very tech savvy. He's filling this new crypto's our role. 213 00:11:06,800 --> 00:11:10,839 Speaker 4: There's also a Crypto Advisory Council being formed. The point 214 00:11:10,840 --> 00:11:12,960 Speaker 4: here is that it does look like the Trump administration 215 00:11:13,040 --> 00:11:16,000 Speaker 4: will be much more supportive of crypto. And if that's 216 00:11:16,040 --> 00:11:19,520 Speaker 4: the case, then I'm highly optimistic on all ten of 217 00:11:19,559 --> 00:11:22,719 Speaker 4: these crypto predictions, or I should say nine to ten. 218 00:11:22,760 --> 00:11:24,959 Speaker 4: The vanguard one we can talk about. Not quite as 219 00:11:24,960 --> 00:11:25,640 Speaker 4: confident there. 220 00:11:26,120 --> 00:11:28,720 Speaker 2: Yeah, I agree with that, he says, fifty launches. Yeah, 221 00:11:28,720 --> 00:11:31,880 Speaker 2: it's going to be like instead of the coin Tucky 222 00:11:31,920 --> 00:11:34,960 Speaker 2: Derby was just Bitcoin, it's gonna be like this all 223 00:11:35,000 --> 00:11:39,200 Speaker 2: out like Derby Derby. Yeah, universal alt coin Derby. It's 224 00:11:39,240 --> 00:11:40,040 Speaker 2: gonna get crazy. 225 00:11:40,120 --> 00:11:40,280 Speaker 3: Now. 226 00:11:40,280 --> 00:11:41,880 Speaker 2: A lot of this stuff is just going to get ignored. 227 00:11:41,920 --> 00:11:44,040 Speaker 2: I mean, you still think bitcoin ETFs take the lion's 228 00:11:44,040 --> 00:11:46,640 Speaker 2: share of this category. But you know, one of these 229 00:11:46,640 --> 00:11:48,400 Speaker 2: coins is going to have a nice run and gonna 230 00:11:48,400 --> 00:11:51,280 Speaker 2: be like the playful thing for a minute. But it's 231 00:11:51,280 --> 00:11:53,319 Speaker 2: still going to be prominently Bitcoin bringing in the big 232 00:11:53,360 --> 00:11:53,920 Speaker 2: boy flows. 233 00:11:54,080 --> 00:11:56,360 Speaker 1: So are you two for two with are you like 234 00:11:56,440 --> 00:11:57,440 Speaker 1: is it one and a half or no? 235 00:11:57,360 --> 00:11:59,520 Speaker 2: No, No, I'm gonna agree with this one. Too, except 236 00:11:59,600 --> 00:12:02,800 Speaker 2: number ten, So I guess I'm one tenth. This isd 237 00:12:02,880 --> 00:12:06,600 Speaker 2: Vanguard capitulation allows clients broker j access to spot bitcoin 238 00:12:06,640 --> 00:12:09,760 Speaker 2: and E three ETFs. I think it happens. I just 239 00:12:09,760 --> 00:12:11,960 Speaker 2: think you're early. I think it takes. It's gonna take 240 00:12:11,960 --> 00:12:14,360 Speaker 2: a littlehile because remember Vanguard's pretty proud and they came 241 00:12:14,360 --> 00:12:17,000 Speaker 2: out and said, we don't like this. It doesn't have 242 00:12:17,080 --> 00:12:19,600 Speaker 2: it can wreak havoc in portfolios, it has no real 243 00:12:19,640 --> 00:12:23,120 Speaker 2: world usage, and they let GLD trade. That's a total 244 00:12:23,160 --> 00:12:25,319 Speaker 2: slap in the face the bitcoin. The crypto people are 245 00:12:25,320 --> 00:12:27,560 Speaker 2: so pissed off by this, and I tell them, listen, 246 00:12:28,320 --> 00:12:30,559 Speaker 2: she's just not that into you, you know what I mean, 247 00:12:30,640 --> 00:12:33,480 Speaker 2: Like you got to get over it. Because they they're like, no, 248 00:12:33,720 --> 00:12:36,000 Speaker 2: Vanguard will bend the knee, and I'm like, Ben, what 249 00:12:36,000 --> 00:12:39,559 Speaker 2: are you talking about. Vanguard is doesn't need you. 250 00:12:39,960 --> 00:12:41,480 Speaker 3: So they guards not thinking about you. 251 00:12:41,520 --> 00:12:42,800 Speaker 5: They're not thinking about you yet. 252 00:12:42,800 --> 00:12:45,959 Speaker 2: It's like that meme, so Joel, I think in time, 253 00:12:46,720 --> 00:12:51,000 Speaker 2: Vanguard may relent simply because if bitcoin becomes a strategic 254 00:12:51,120 --> 00:12:55,480 Speaker 2: preserve for the US, if there's more advisory assets in 255 00:12:55,559 --> 00:12:58,520 Speaker 2: Vanguard that demand crypto is part of the portfolio. If 256 00:12:58,520 --> 00:13:02,160 Speaker 2: Selim Ramsey has more time to like grow his influence there. 257 00:13:02,200 --> 00:13:04,160 Speaker 2: I know he launched I a bit at black Rock, 258 00:13:04,240 --> 00:13:06,920 Speaker 2: so the new CEO there is clearly a fan. There's 259 00:13:06,960 --> 00:13:10,000 Speaker 2: a couple of things that will germinate. I just think 260 00:13:10,000 --> 00:13:11,240 Speaker 2: they take longer than the year, Nate. 261 00:13:11,679 --> 00:13:13,360 Speaker 1: Okay, Joe, Well, you should know. 262 00:13:14,000 --> 00:13:16,600 Speaker 4: Any time that I'm wrong on a prediction, I always 263 00:13:16,640 --> 00:13:19,439 Speaker 4: say I'm just too early. Eric knows that, and Eric 264 00:13:19,440 --> 00:13:21,320 Speaker 4: and I tend to be very early on a lot 265 00:13:21,360 --> 00:13:21,880 Speaker 4: of predictions. 266 00:13:22,600 --> 00:13:24,600 Speaker 2: Right on say I don't do these, but I do 267 00:13:24,720 --> 00:13:27,400 Speaker 2: bets with Todd Rosenblue. That's my version of the predictions. 268 00:13:27,440 --> 00:13:30,120 Speaker 2: And I'm early. I've never been wrong. I've just been early. 269 00:13:30,400 --> 00:13:34,240 Speaker 3: But Nate himself in his prediction sites Howard Mark saying 270 00:13:34,280 --> 00:13:37,079 Speaker 3: being too far ahead of your time is indistinguishable from 271 00:13:37,120 --> 00:13:41,240 Speaker 3: being wrong, So being too early could mean you're wrong. 272 00:13:41,320 --> 00:13:44,000 Speaker 1: Okay, yeah, so no rebuttal date that's what you get. 273 00:13:44,720 --> 00:13:46,600 Speaker 1: What do you think of more crypto ETFs? 274 00:13:46,760 --> 00:13:50,320 Speaker 3: I think I agree with Eric and Nate in that 275 00:13:50,400 --> 00:13:52,800 Speaker 3: we'll see, you know, like throw all the jargon words 276 00:13:52,840 --> 00:13:58,240 Speaker 3: in covered call zero DT, inverse leverage two x X, 277 00:13:59,440 --> 00:14:01,640 Speaker 3: all kinds of weird stuff. I don't know about the 278 00:14:01,720 --> 00:14:05,560 Speaker 3: Vanguard part. I mean, I'm gonna trust what Eric says here, 279 00:14:05,600 --> 00:14:07,680 Speaker 3: because he's like the Vanguard whisperer. 280 00:14:08,320 --> 00:14:10,960 Speaker 1: Okay, Nate, now go ahead, proceed with here Rebut. 281 00:14:10,679 --> 00:14:14,640 Speaker 4: Okay, so Eric said the magic words, which is Selim Ramji, 282 00:14:14,960 --> 00:14:18,000 Speaker 4: the new Vanguard CEO. So before he came over to Vanguard, 283 00:14:18,280 --> 00:14:21,480 Speaker 4: he was instrumental in moving the eyes Shares BITCOINYTF forward 284 00:14:21,520 --> 00:14:25,200 Speaker 4: while he was at Black Rock. And look, it's one 285 00:14:25,200 --> 00:14:28,960 Speaker 4: thing for Vanguard to not offer their own spot crypto ETFs. 286 00:14:29,080 --> 00:14:32,200 Speaker 4: That's perfectly fine, but it's another thing to treat clients 287 00:14:32,240 --> 00:14:35,960 Speaker 4: like their kids, like they can't have ice cream or whatever. 288 00:14:36,280 --> 00:14:40,400 Speaker 4: And I think Selim knows that he can't just withhold 289 00:14:40,480 --> 00:14:43,480 Speaker 4: access to these products. I think Vanguard will capitulate on 290 00:14:43,520 --> 00:14:46,480 Speaker 4: this decision to gate access to crypto ETFs. And the 291 00:14:46,520 --> 00:14:49,000 Speaker 4: other thing that I would say is, like myself, I 292 00:14:49,040 --> 00:14:52,640 Speaker 4: love Vanguard's investment approach. I personally invest in low cost 293 00:14:52,880 --> 00:14:56,080 Speaker 4: stock and bond funds, as do our clients, but I 294 00:14:56,080 --> 00:14:59,880 Speaker 4: also like a little crypto, a little hot sauces Eric call. 295 00:15:00,680 --> 00:15:03,720 Speaker 4: I don't think I'm alone. Yeah, well, I just think 296 00:15:03,800 --> 00:15:08,840 Speaker 4: Vanguard is actually alienating younger investors who view crypto as 297 00:15:08,880 --> 00:15:11,760 Speaker 4: a normal part of a portfolio, and at some point 298 00:15:11,760 --> 00:15:13,600 Speaker 4: I think that's going to impact their business. And I 299 00:15:13,640 --> 00:15:15,880 Speaker 4: think somebody like Salim's going to see the bigger picture. 300 00:15:16,040 --> 00:15:19,560 Speaker 1: Okay, all right, all right, speaking of bigger picture private markets, 301 00:15:19,760 --> 00:15:21,880 Speaker 1: what's your prediction? Your third prediction? 302 00:15:22,840 --> 00:15:27,080 Speaker 4: Yeah, So, private credit ETFs received a tremendous amount of 303 00:15:27,080 --> 00:15:30,080 Speaker 4: attention last year. There was this filing from State Street 304 00:15:30,120 --> 00:15:34,840 Speaker 4: for the Spider Apollo Public and Private Credit ETF, and 305 00:15:35,240 --> 00:15:37,920 Speaker 4: a lot of people in the industry are saying this 306 00:15:38,000 --> 00:15:40,680 Speaker 4: is going to be the next big thing. I just 307 00:15:40,720 --> 00:15:43,320 Speaker 4: can't get my head around this and how this will work. 308 00:15:43,840 --> 00:15:46,880 Speaker 4: And you know, very simply, what State Street is trying 309 00:15:46,880 --> 00:15:50,080 Speaker 4: to do is partner with Apolo, where Paula would be 310 00:15:50,120 --> 00:15:52,880 Speaker 4: the sole liquidity provider. In other words, they're going to 311 00:15:52,920 --> 00:15:56,000 Speaker 4: be both the buyer and the seller of the private 312 00:15:56,080 --> 00:15:59,440 Speaker 4: credit for this private credit ETF. They'd obviously determine the 313 00:15:59,480 --> 00:16:02,360 Speaker 4: value of this stuff as well. That seems like a 314 00:16:03,040 --> 00:16:06,040 Speaker 4: clear conflict of interest to me. Right, if they own 315 00:16:06,640 --> 00:16:09,520 Speaker 4: private credit that they believe, say is overvalued, how do 316 00:16:09,520 --> 00:16:11,400 Speaker 4: we know that's not what they're selling to State Street 317 00:16:11,760 --> 00:16:14,360 Speaker 4: or vice versa. If State Street needs to redeem shares. 318 00:16:14,640 --> 00:16:16,800 Speaker 4: How do we know Apollo isn't buying the most attractive 319 00:16:16,800 --> 00:16:19,160 Speaker 4: private credit out of the ETF, especially if you were 320 00:16:19,160 --> 00:16:22,560 Speaker 4: in a market where it's under duress. So I just 321 00:16:22,600 --> 00:16:25,520 Speaker 4: think this whole thing is simply a conflict. And I'm 322 00:16:25,520 --> 00:16:28,680 Speaker 4: telling you that the SEC hates conflicts of interest like this. 323 00:16:29,080 --> 00:16:31,800 Speaker 4: So even if we have a more lenient SEC under 324 00:16:31,840 --> 00:16:35,200 Speaker 4: the Trump administration, I just don't see them getting comfortable 325 00:16:35,760 --> 00:16:37,720 Speaker 4: with this. And then the other piece that I'll add 326 00:16:37,760 --> 00:16:41,880 Speaker 4: here is private credit is by definition private right because 327 00:16:41,880 --> 00:16:45,000 Speaker 4: it doesn't trade on a public exchange. It's essentially a 328 00:16:45,040 --> 00:16:49,400 Speaker 4: liquid whereas ETFs or daily liquidity vehicles, and so you 329 00:16:49,440 --> 00:16:52,120 Speaker 4: have a true mismatch here. I just don't see how 330 00:16:52,160 --> 00:16:57,160 Speaker 4: that can work where you put investor's best interest first. 331 00:16:57,360 --> 00:16:59,960 Speaker 3: We have to add. So Bloomberg reported a month ago 332 00:17:00,120 --> 00:17:03,880 Speaker 3: that Apollo is already the desk that they have set 333 00:17:03,960 --> 00:17:07,360 Speaker 3: up to try to facilitate the creation of the CTF. 334 00:17:07,359 --> 00:17:10,320 Speaker 3: It's already up and running. They're already trading this stuff. 335 00:17:10,680 --> 00:17:14,000 Speaker 2: I mean, I think Nate's point about being conflict of interests, 336 00:17:14,440 --> 00:17:16,439 Speaker 2: it's a good point. And there's been some people saying that, 337 00:17:16,480 --> 00:17:18,520 Speaker 2: like Apollo will be able to dump all the stuff 338 00:17:18,560 --> 00:17:21,080 Speaker 2: they don't want to actually own into the ETF. But 339 00:17:22,000 --> 00:17:24,600 Speaker 2: I would think that State Street, to me, is the 340 00:17:24,600 --> 00:17:27,520 Speaker 2: offset of that conflict of interest. That's who's on the label, 341 00:17:28,040 --> 00:17:30,400 Speaker 2: and State Street is going to make sure that their 342 00:17:30,400 --> 00:17:31,520 Speaker 2: investors don't get screwed. 343 00:17:32,119 --> 00:17:33,440 Speaker 5: So I trust State. 344 00:17:33,280 --> 00:17:36,800 Speaker 2: Street enough, and they're thirty two year history of running 345 00:17:36,840 --> 00:17:43,040 Speaker 2: ETFs well, and I just don't want my crap any 346 00:17:43,080 --> 00:17:43,600 Speaker 2: other way. 347 00:17:43,720 --> 00:17:44,880 Speaker 5: I want it in an ETF. 348 00:17:45,359 --> 00:17:47,479 Speaker 2: You may say that privates are better in an interval 349 00:17:47,520 --> 00:17:50,480 Speaker 2: fund or even a mutual fund or a hedge fund, 350 00:17:50,560 --> 00:17:52,560 Speaker 2: but I don't trust any of those. I'm not I 351 00:17:52,640 --> 00:17:55,080 Speaker 2: don't want to pay that money, and I'm right now 352 00:17:55,080 --> 00:17:56,960 Speaker 2: I'm in a character of all the investors. 353 00:17:57,000 --> 00:17:58,000 Speaker 5: I'm not actually me. 354 00:17:58,720 --> 00:18:01,520 Speaker 2: That's how investors have decided to like That's what they've 355 00:18:01,560 --> 00:18:04,240 Speaker 2: been showing with their feet. They just wanted an ETF 356 00:18:04,480 --> 00:18:07,240 Speaker 2: and Nate. There's plenty of ill liquid stuff in ETFs. 357 00:18:07,280 --> 00:18:07,680 Speaker 5: Currently. 358 00:18:08,119 --> 00:18:11,520 Speaker 2: There's times where stock markets close. In the ETF trades 359 00:18:12,080 --> 00:18:14,679 Speaker 2: HYD which is high yield muni's during COVID trade at 360 00:18:14,720 --> 00:18:18,240 Speaker 2: twenty nine percent discount. I think ETF investors would rather 361 00:18:18,359 --> 00:18:22,480 Speaker 2: have this in an imperfect way with discounts or stretched 362 00:18:22,560 --> 00:18:26,479 Speaker 2: arbitrage bands and even a potential for conflict of interest. 363 00:18:27,080 --> 00:18:30,040 Speaker 2: Then go to some interval fund and I will show 364 00:18:30,080 --> 00:18:34,560 Speaker 2: you proof. The XOVR, which is the private equity public 365 00:18:34,560 --> 00:18:38,119 Speaker 2: equity crossover fund that owns SpaceX, has ten percent SpaceX. 366 00:18:38,400 --> 00:18:39,920 Speaker 5: That has two hundred million already. 367 00:18:40,240 --> 00:18:43,720 Speaker 2: That's double Kathy Wood's Arc Venture Fund, which was launched 368 00:18:43,720 --> 00:18:46,600 Speaker 2: at the height of arcmania, and that has one hundred million. 369 00:18:46,800 --> 00:18:48,000 Speaker 5: But it's an interval fund. 370 00:18:48,440 --> 00:18:51,440 Speaker 2: That's like making a great album, but you're only putting 371 00:18:51,480 --> 00:18:53,000 Speaker 2: it on eight track cassette tapes. 372 00:18:53,080 --> 00:18:53,919 Speaker 5: Who's going to buy it? 373 00:18:54,640 --> 00:18:58,480 Speaker 3: So, but Nate isn't saying that this ETF will never come, right, 374 00:18:58,720 --> 00:19:00,600 Speaker 3: He's just saying it won't come in twenty twenty five. 375 00:19:01,480 --> 00:19:04,159 Speaker 2: Well, he's saying that this filing as it is. I 376 00:19:04,240 --> 00:19:06,720 Speaker 2: will okay, I mean, I'll bet you. I will bet 377 00:19:06,760 --> 00:19:10,800 Speaker 2: that the Apollo State Street ETF will launch this year. 378 00:19:11,400 --> 00:19:13,520 Speaker 5: You're betting, Nate, Yeah, steak dinner. 379 00:19:14,840 --> 00:19:17,640 Speaker 4: I will take that, okay, because I stand behind my 380 00:19:17,640 --> 00:19:20,399 Speaker 4: my predictions. Hey, here's here's my question, though, where do 381 00:19:20,440 --> 00:19:23,000 Speaker 4: we draw the line? Right? I think we would agree 382 00:19:23,040 --> 00:19:26,440 Speaker 4: private credit is a liquid So what else can we 383 00:19:26,440 --> 00:19:30,200 Speaker 4: put in an ETF wrapper? Is it art baseball cards? 384 00:19:30,640 --> 00:19:33,200 Speaker 5: Yes, wine, Yes, where do you draw the line? 385 00:19:33,240 --> 00:19:38,000 Speaker 2: So I just think ETF's sometimes trade like clothes unfunds 386 00:19:38,040 --> 00:19:41,600 Speaker 2: in crisis. I just think you're gonna see a situation 387 00:19:41,680 --> 00:19:45,320 Speaker 2: where ets become hybrid clothes und funds and they just 388 00:19:45,440 --> 00:19:48,400 Speaker 2: trade away from the NAV. But people are like, I'll 389 00:19:48,400 --> 00:19:51,960 Speaker 2: take that over getting screwed on these other kinds of vehicles. 390 00:19:53,040 --> 00:19:54,960 Speaker 1: Do we still think this is the next big thing, Nate? 391 00:19:56,240 --> 00:19:58,399 Speaker 4: I don't. And part of that is I'm not so 392 00:19:58,520 --> 00:20:02,639 Speaker 4: sure that the average invest really needs access to private credit. 393 00:20:03,119 --> 00:20:06,280 Speaker 4: I would make that argument right now that that's a 394 00:20:06,320 --> 00:20:08,919 Speaker 4: frothy area of the market in general. But even if 395 00:20:09,000 --> 00:20:11,879 Speaker 4: it wasn't, I don't know that the average sixty to 396 00:20:11,920 --> 00:20:16,200 Speaker 4: forty investor needs the ability to access private credit. I 397 00:20:16,240 --> 00:20:18,760 Speaker 4: don't know what this really adds to a portfolio other 398 00:20:18,800 --> 00:20:19,640 Speaker 4: than complexity. 399 00:20:20,400 --> 00:20:23,879 Speaker 3: That doesn't adding bitcoin to your portfolio also add complexity 400 00:20:24,040 --> 00:20:25,040 Speaker 3: or a ton of crypto. 401 00:20:26,040 --> 00:20:29,399 Speaker 4: That's a fair point, But I would say bitcoin is 402 00:20:29,440 --> 00:20:34,400 Speaker 4: a much more transparent market, okay, all right, a lot 403 00:20:34,400 --> 00:20:36,679 Speaker 4: more liquidity there paying. 404 00:20:36,400 --> 00:20:39,520 Speaker 1: It forward in some sort of prediction. Let's hear number 405 00:20:39,520 --> 00:20:40,080 Speaker 1: four Nate. 406 00:20:41,240 --> 00:20:43,840 Speaker 4: Okay, Prediction number four is that three point fifty one 407 00:20:43,880 --> 00:20:46,760 Speaker 4: exchanges go mainstream and this definitely gets on the weed. 408 00:20:46,840 --> 00:20:48,640 Speaker 1: So what that means. 409 00:20:49,160 --> 00:20:52,960 Speaker 4: Okay, So in December, an issuer by the name of 410 00:20:53,040 --> 00:20:58,159 Speaker 4: Cambria launched this Cambria Attacks Aware ETF and basically the 411 00:20:58,200 --> 00:21:02,480 Speaker 4: way that it takes it's a great ticker. The way 412 00:21:02,480 --> 00:21:04,840 Speaker 4: this worked was that investors of a certain size, so 413 00:21:04,840 --> 00:21:07,920 Speaker 4: they had to be a bit larger, they could contribute 414 00:21:07,920 --> 00:21:12,000 Speaker 4: their individual stock portfolio into the ETF. Okay, so they 415 00:21:12,000 --> 00:21:16,240 Speaker 4: provide their individual stocks to Cambria and in return, they 416 00:21:16,320 --> 00:21:19,240 Speaker 4: receive shares of the Cambria ETF. At a high level, 417 00:21:19,240 --> 00:21:22,159 Speaker 4: this is called a three p fifty one exchange. And 418 00:21:22,240 --> 00:21:24,160 Speaker 4: there are a lot of nuances to this because you're 419 00:21:24,200 --> 00:21:27,240 Speaker 4: dealing with a tax code. But as long as these 420 00:21:27,240 --> 00:21:31,960 Speaker 4: investors met certain criteria, this was not a taxable event. 421 00:21:32,200 --> 00:21:33,960 Speaker 4: And so let me just give you a real quick example. 422 00:21:34,000 --> 00:21:38,600 Speaker 4: So let's say an investor owned a portfolio of Tesla 423 00:21:38,640 --> 00:21:41,919 Speaker 4: and Nvidia and micro Strategy and some other stocks that 424 00:21:41,960 --> 00:21:45,480 Speaker 4: have gone up a lot and where maybe the valuations 425 00:21:45,480 --> 00:21:48,560 Speaker 4: are elevated. Well, that investor may want to reduce their 426 00:21:48,640 --> 00:21:51,040 Speaker 4: risk now, but the problem is if they own those 427 00:21:51,080 --> 00:21:53,960 Speaker 4: stocks in a taxable account, they obviously have to pay 428 00:21:54,000 --> 00:21:56,480 Speaker 4: taxes if they sell. So what this three to fifty 429 00:21:56,520 --> 00:21:59,719 Speaker 4: one exchange allows them to do is diversify into an 430 00:21:59,720 --> 00:22:02,919 Speaker 4: ETA and then they can defer taxes until when they 431 00:22:02,960 --> 00:22:05,280 Speaker 4: sell the ETF shares. Plus they get all the benefits 432 00:22:05,560 --> 00:22:08,840 Speaker 4: of the ETF rapper right that tax efficiency and low 433 00:22:08,880 --> 00:22:11,439 Speaker 4: cost and all of those things. So my prediction is 434 00:22:11,440 --> 00:22:15,480 Speaker 4: that we are going to see more issuers pursue this. 435 00:22:15,600 --> 00:22:17,280 Speaker 4: I think this is going to become pretty popular. 436 00:22:17,960 --> 00:22:21,720 Speaker 1: Huh So, and do you think it's more relevant for 437 00:22:21,840 --> 00:22:26,679 Speaker 1: people who have been acquiring shares of late or do 438 00:22:26,720 --> 00:22:29,520 Speaker 1: you think it could be more impactful for people who, say, 439 00:22:29,600 --> 00:22:32,639 Speaker 1: like have owned Microsoft since the nineties or Apple. 440 00:22:32,760 --> 00:22:35,240 Speaker 4: I think more impactful for people who have owned shares 441 00:22:35,280 --> 00:22:36,960 Speaker 4: for a while. But I think it just depends on 442 00:22:37,000 --> 00:22:39,600 Speaker 4: the composition of the portfolio. I also think this is 443 00:22:39,640 --> 00:22:43,680 Speaker 4: going to be more applicable to higher net worth investors. Right, 444 00:22:43,760 --> 00:22:46,720 Speaker 4: investors who have a higher net worth, they're probably in 445 00:22:46,760 --> 00:22:49,720 Speaker 4: a higher tax bracket, they have a larger portfolio. This 446 00:22:49,760 --> 00:22:51,879 Speaker 4: is going to make more sense. I also think this 447 00:22:51,920 --> 00:22:54,880 Speaker 4: could make sense for some advisors who are running separately 448 00:22:54,920 --> 00:22:55,720 Speaker 4: managed accounts. 449 00:22:56,760 --> 00:22:59,000 Speaker 5: Advisors will tell you. 450 00:22:59,280 --> 00:23:01,120 Speaker 2: I'm not sure if will agree, but I've heard that 451 00:23:02,000 --> 00:23:05,800 Speaker 2: real rich people hate paying taxes more than they actually 452 00:23:05,840 --> 00:23:09,200 Speaker 2: like getting like good returns, and so I think avoiding 453 00:23:09,240 --> 00:23:10,119 Speaker 2: taxes is going to is. 454 00:23:10,119 --> 00:23:12,840 Speaker 5: There's the demand there. And there's an ETF mouth. 455 00:23:12,720 --> 00:23:14,960 Speaker 2: Architect called Box, which does I won't go into it, 456 00:23:15,000 --> 00:23:18,360 Speaker 2: but it does a tax maneuver and I think it's 457 00:23:18,359 --> 00:23:21,160 Speaker 2: got four point seven billion, and that's from a small 458 00:23:21,160 --> 00:23:26,240 Speaker 2: indie issuer. There's going to be tax innovation in the ETFs, 459 00:23:26,280 --> 00:23:28,760 Speaker 2: and I agree with Nate on this one. I think 460 00:23:28,800 --> 00:23:29,560 Speaker 2: we'll see more of this. 461 00:23:30,200 --> 00:23:34,040 Speaker 3: Godana, I love this, I love tax I think this 462 00:23:34,119 --> 00:23:38,000 Speaker 3: is the big theme, the big story, the ways that 463 00:23:38,480 --> 00:23:43,000 Speaker 3: ETFs are being utilized to help offset your big tax bills. 464 00:23:43,920 --> 00:23:47,040 Speaker 3: The one caveat is that tax the ETF that Nate 465 00:23:47,119 --> 00:23:49,720 Speaker 3: was talking about it it has already launched, but it 466 00:23:49,760 --> 00:23:53,640 Speaker 3: only got thirty one million dollars, which isn't huge. It's 467 00:23:53,400 --> 00:23:55,480 Speaker 3: a it's a nice sum, but it's not huge. So 468 00:23:55,520 --> 00:23:59,320 Speaker 3: we'll see how that grows, if it grows. But the 469 00:23:59,440 --> 00:24:02,600 Speaker 3: guy behind mind all of these, including Box, the one 470 00:24:02,720 --> 00:24:06,159 Speaker 3: Eric just mentioned is Wes Gray, and he's really his 471 00:24:07,560 --> 00:24:13,320 Speaker 3: white label company ETF architect is really like coming up 472 00:24:13,320 --> 00:24:15,840 Speaker 3: with these ways or coming or innovating the way that 473 00:24:15,920 --> 00:24:20,680 Speaker 3: people are doing tax aware conversions. If we can call 474 00:24:20,720 --> 00:24:24,639 Speaker 3: them from SMAs or you know, family office stuff hedge 475 00:24:24,640 --> 00:24:30,359 Speaker 3: funds into ETFs. So I think it's very interesting. I 476 00:24:30,400 --> 00:24:30,760 Speaker 3: love it. 477 00:24:31,440 --> 00:24:34,520 Speaker 1: Are they going to bock at anything, Nate like if say, 478 00:24:34,560 --> 00:24:37,080 Speaker 1: like I bring them something from you know, somewhere in 479 00:24:37,080 --> 00:24:39,760 Speaker 1: my portfolio, like they don't have to take anything, right. 480 00:24:40,600 --> 00:24:43,840 Speaker 4: Yeah, there are some very specific rules and requirements in 481 00:24:43,920 --> 00:24:47,000 Speaker 4: terms of how you conduct these three fifty one exchanges, 482 00:24:47,080 --> 00:24:50,360 Speaker 4: So you can't just take any portfolio and do this 483 00:24:50,440 --> 00:24:54,280 Speaker 4: with and to what Viil Donna was saying with the 484 00:24:54,480 --> 00:24:57,880 Speaker 4: thirty million or so into the Cambria TAXIWARYTF, I think 485 00:24:58,080 --> 00:25:00,119 Speaker 4: a reason for that is and that's not bad, but 486 00:25:00,119 --> 00:25:02,240 Speaker 4: I think a reason it's not more is there is 487 00:25:02,240 --> 00:25:05,960 Speaker 4: a huge educational hurdle surrounding all of this. There's a 488 00:25:06,000 --> 00:25:08,359 Speaker 4: lot that investors and advisors have to get their head around. 489 00:25:08,480 --> 00:25:10,959 Speaker 1: So let's just try and make your prediction be a 490 00:25:11,000 --> 00:25:16,760 Speaker 1: little bit more specific, which is okay, you say the 491 00:25:16,840 --> 00:25:20,800 Speaker 1: three fifty one exchanges go mainstream, can you actually put 492 00:25:20,840 --> 00:25:22,440 Speaker 1: something quantifiable there for. 493 00:25:22,440 --> 00:25:28,800 Speaker 4: Us, I will say five ETF issuers who we all 494 00:25:28,960 --> 00:25:32,760 Speaker 4: know will pursue this approach. And as a matter of fact, 495 00:25:33,480 --> 00:25:36,600 Speaker 4: I saw last week Alpha Architects, so that's the ETF 496 00:25:36,720 --> 00:25:40,639 Speaker 4: side of ETF Architects white label. They're actually launching one 497 00:25:40,680 --> 00:25:43,160 Speaker 4: of these. So I'm cheating a little bit, So we'll 498 00:25:43,200 --> 00:25:46,360 Speaker 4: say four others. All right, four other issuers? 499 00:25:46,680 --> 00:25:49,400 Speaker 1: Eric, are you four for four right now? No? 500 00:25:49,480 --> 00:25:51,720 Speaker 2: I didn't agree with the him saying that Apollo we 501 00:25:51,760 --> 00:25:52,840 Speaker 2: already better staked dinner on it. 502 00:25:53,480 --> 00:26:05,800 Speaker 1: So three for four, three for four though, okay number five, Nick, 503 00:26:05,880 --> 00:26:07,600 Speaker 1: go ahead, Okay. 504 00:26:07,720 --> 00:26:12,560 Speaker 4: Last prediction is that a leverage single stock ETF implodes. 505 00:26:13,280 --> 00:26:16,800 Speaker 4: And what this comes down to is that issuers are 506 00:26:16,880 --> 00:26:20,159 Speaker 4: launching a boatload of leverage single stock ETFs on the 507 00:26:20,160 --> 00:26:22,879 Speaker 4: most popular companies, which, if you think about this, that 508 00:26:22,920 --> 00:26:26,000 Speaker 4: makes sense from the issuer's perspective, right, because they want 509 00:26:26,200 --> 00:26:29,119 Speaker 4: people to buy their ETF, they need interest, and so 510 00:26:29,240 --> 00:26:31,320 Speaker 4: of course they're going to pick the most popular stocks. 511 00:26:31,840 --> 00:26:34,119 Speaker 4: The problem is that a lot of these stocks are 512 00:26:34,160 --> 00:26:36,600 Speaker 4: also many of the high flyers. So again it's the 513 00:26:36,800 --> 00:26:41,919 Speaker 4: micro strategies and NVIDIAs Tesla's right, Paletaire and I'm not 514 00:26:41,960 --> 00:26:44,320 Speaker 4: here to make any investment calls. I'm trying to make 515 00:26:45,040 --> 00:26:48,359 Speaker 4: ETF predictions. But there is absolutely a case to be 516 00:26:48,400 --> 00:26:52,359 Speaker 4: made that some of these companies are significantly overvalued. And 517 00:26:52,520 --> 00:26:54,480 Speaker 4: even if we put that aside, So let's put the 518 00:26:54,560 --> 00:26:58,439 Speaker 4: valuations aside. These stocks are very volatile. If you look 519 00:26:58,480 --> 00:27:01,239 Speaker 4: at something like micro Strategy, this thing moves around a 520 00:27:01,280 --> 00:27:03,760 Speaker 4: tremendous amount, and so I just think it's a matter 521 00:27:03,800 --> 00:27:06,880 Speaker 4: of time before one or even more of these stocks 522 00:27:07,040 --> 00:27:10,960 Speaker 4: drops fifty sixty seventy percent over a few days or 523 00:27:10,960 --> 00:27:13,560 Speaker 4: a week. And if you just do the math on that, 524 00:27:13,560 --> 00:27:15,840 Speaker 4: that would be enough for one of these leveraged ETFs 525 00:27:15,880 --> 00:27:16,560 Speaker 4: to implode. 526 00:27:16,960 --> 00:27:19,200 Speaker 1: And your point is that there's going to be one, 527 00:27:20,000 --> 00:27:21,480 Speaker 1: at least one or one. 528 00:27:22,440 --> 00:27:25,159 Speaker 4: I'm saying one, but I wouldn't be surprised if we 529 00:27:25,240 --> 00:27:26,840 Speaker 4: see more than that. 530 00:27:28,320 --> 00:27:30,760 Speaker 2: So I disagree with this one, but not enough. I 531 00:27:30,760 --> 00:27:32,600 Speaker 2: don't feel strong enough to better steak dinner, but I 532 00:27:33,040 --> 00:27:37,399 Speaker 2: lightly disagree. I just think in this Trump era, especially 533 00:27:37,440 --> 00:27:39,080 Speaker 2: with limit up, limit down, a stock can go down 534 00:27:39,160 --> 00:27:41,359 Speaker 2: seven percent right then they halt it. 535 00:27:41,920 --> 00:27:43,240 Speaker 5: And I just see the. 536 00:27:43,160 --> 00:27:46,560 Speaker 2: Trump administration leaning on the FED and basically like coddling 537 00:27:46,640 --> 00:27:49,240 Speaker 2: the market. So I don't see a stock having fifty 538 00:27:49,280 --> 00:27:52,680 Speaker 2: percent draw down in like three days. If I'm wrong, 539 00:27:52,760 --> 00:27:55,160 Speaker 2: you're right, and that would be like a COVID type 540 00:27:55,200 --> 00:27:56,840 Speaker 2: sell off. It would take a black Swan event, in 541 00:27:56,880 --> 00:28:01,000 Speaker 2: my opinion, not a routine pullback. But I also think 542 00:28:01,080 --> 00:28:03,880 Speaker 2: that you know, if you look at MSTU and MSTZ, 543 00:28:04,119 --> 00:28:05,800 Speaker 2: these would be the canaries in the coal mine. I 544 00:28:05,840 --> 00:28:09,520 Speaker 2: think these are the most volatile ETFs on planet or 545 00:28:09,560 --> 00:28:13,480 Speaker 2: in the US, and they have twenty percent up twenty 546 00:28:13,520 --> 00:28:15,800 Speaker 2: percent down days, but not too much more than that. 547 00:28:16,400 --> 00:28:20,040 Speaker 2: So they can handle again, a couple serious pullbacks with 548 00:28:20,160 --> 00:28:24,440 Speaker 2: being fined. They couldn't handle COVID right, and we saw 549 00:28:24,440 --> 00:28:26,240 Speaker 2: a bunch of leverge gtfs blow up in COVID. So 550 00:28:26,560 --> 00:28:29,440 Speaker 2: I just don't think we get another COVID with Trump. 551 00:28:29,960 --> 00:28:31,639 Speaker 2: Is he's just too into the stock market. 552 00:28:32,240 --> 00:28:33,840 Speaker 1: Final word, I don't want. 553 00:28:33,680 --> 00:28:36,920 Speaker 3: To call out any one of these, but you so, Eric, 554 00:28:37,240 --> 00:28:41,160 Speaker 3: you don't think one of them can drop forty without 555 00:28:41,200 --> 00:28:43,960 Speaker 3: an exogenous event. I could see it happening. 556 00:28:44,320 --> 00:28:45,680 Speaker 2: It would have to be it would have to be 557 00:28:45,720 --> 00:28:50,200 Speaker 2: something specific to like micro Strategy or Navidia, But Navidia 558 00:28:50,200 --> 00:28:52,000 Speaker 2: has got so much going on even if it sells off, 559 00:28:52,000 --> 00:28:53,400 Speaker 2: it might solve twenty per I mean, it's not going 560 00:28:53,440 --> 00:28:55,920 Speaker 2: to self eighty percent unless the whole thing's a fraud. 561 00:28:56,760 --> 00:28:59,520 Speaker 2: Micro strategy Okay, I mean what we know everything about 562 00:28:59,520 --> 00:29:01,120 Speaker 2: Michael sit he's clearly into bitcoin. 563 00:29:01,480 --> 00:29:04,160 Speaker 5: What if he got a new interest maybe I don't know. 564 00:29:05,480 --> 00:29:08,440 Speaker 2: Micro Strategy is high beta to the stock market, and 565 00:29:08,480 --> 00:29:10,600 Speaker 2: these are high bata to micro strategy. So the key 566 00:29:10,640 --> 00:29:12,960 Speaker 2: is the stock market. If the stock market goes into 567 00:29:12,960 --> 00:29:16,080 Speaker 2: a COVID freefall, then micro strategy is really in trouble 568 00:29:16,120 --> 00:29:18,960 Speaker 2: because bitcoin is high beta to the stocks. So that's 569 00:29:19,000 --> 00:29:21,280 Speaker 2: my point on you got to really have a negative 570 00:29:21,360 --> 00:29:23,640 Speaker 2: view of the stock market having a COVID like month 571 00:29:24,120 --> 00:29:25,480 Speaker 2: to think this is going to blow up. 572 00:29:26,400 --> 00:29:28,600 Speaker 4: I will just add if you look in December the 573 00:29:28,720 --> 00:29:31,680 Speaker 4: leverage micro strategy ETFs, those are down like forty percent 574 00:29:31,720 --> 00:29:34,600 Speaker 4: plus and that was just a run of the mill pullback. 575 00:29:34,960 --> 00:29:36,000 Speaker 4: In the broader market. 576 00:29:36,680 --> 00:29:41,840 Speaker 2: Negative went up forty percent and that these people already 577 00:29:41,840 --> 00:29:44,320 Speaker 2: love that. That's like a good day for these traders. 578 00:29:44,320 --> 00:29:46,960 Speaker 2: But again it would take us sustain like a couple 579 00:29:47,000 --> 00:29:49,320 Speaker 2: of days, a couple of weeks I think, before this 580 00:29:49,400 --> 00:29:51,959 Speaker 2: thing's But that's why I'm not betting steak dinner, Nate. 581 00:29:52,000 --> 00:29:53,240 Speaker 2: I would just say I would take the under. 582 00:29:53,520 --> 00:29:55,720 Speaker 4: Okay, So how about we bet we bet a nice 583 00:29:55,720 --> 00:29:57,760 Speaker 4: glass of wine along with the steak dinner. 584 00:29:57,520 --> 00:29:57,960 Speaker 5: On this one? 585 00:29:58,040 --> 00:30:02,440 Speaker 2: Okay, dessert there any I'll get you. I'll get you 586 00:30:02,480 --> 00:30:06,720 Speaker 2: a Chief's cake. No, not a whole cake, just the 587 00:30:06,760 --> 00:30:11,000 Speaker 2: slice with the Chiefs colors. He's cake, He's look. The 588 00:30:11,080 --> 00:30:13,520 Speaker 2: Chiefs are the new Yankees and Duke the most annoying 589 00:30:13,520 --> 00:30:16,080 Speaker 2: sports fan on earth are aren't you sick of Patrick 590 00:30:16,120 --> 00:30:19,760 Speaker 2: mahomes stupid snake farm commercials? And then Andy Reed completely 591 00:30:19,840 --> 00:30:22,920 Speaker 2: embarrassing himself coming in, Oh, where's the chicken nuggets? It's like, 592 00:30:23,000 --> 00:30:24,240 Speaker 2: get these people off TV? 593 00:30:24,560 --> 00:30:26,400 Speaker 5: Yes, all right, hey, Jola. 594 00:30:26,480 --> 00:30:29,320 Speaker 4: Fun fact is that Eric has lost another bet to 595 00:30:29,400 --> 00:30:31,360 Speaker 4: me in the past, and I am the proud owner 596 00:30:31,400 --> 00:30:32,400 Speaker 4: of a Patrick Mahomes. 597 00:30:34,160 --> 00:30:37,480 Speaker 5: That's why I'm like, I am bloodthirsty. 598 00:30:37,760 --> 00:30:38,120 Speaker 2: All right? 599 00:30:38,160 --> 00:30:40,960 Speaker 1: On that note, Nate Jracy, thanks so much for joining 600 00:30:41,000 --> 00:30:43,120 Speaker 1: us on Trillions, Phil Donna, welcome back. 601 00:30:43,240 --> 00:30:44,360 Speaker 3: Thank you go Bills. 602 00:30:50,960 --> 00:30:53,959 Speaker 1: Thanks for listening to Trillions. Until next time. You can 603 00:30:53,960 --> 00:30:58,840 Speaker 1: find us on the Bloomberg terminal, Bloomberg dot com, Apple Podcasts, Spotify, 604 00:30:59,440 --> 00:31:02,040 Speaker 1: or wherever you'd like to listen. We'd love to hear 605 00:31:02,080 --> 00:31:05,280 Speaker 1: from you. We're on Twitter. I'm at Joel Webber Show. 606 00:31:05,680 --> 00:31:10,320 Speaker 1: He's at Eric Balchunas. This episode of Trillions was produced 607 00:31:10,320 --> 00:31:13,200 Speaker 1: by Magnus Hendrickson. Bye.