WEBVTT - Five ETF Predictions for 2025 0:00:05.519 --> 0:00:06.240 Well, CNA trillions. 0:00:06.280 --> 0:00:11.480 I'm Joel Webber and I'm Eric Alchunas. 0:00:11.640 --> 0:00:14.360 He sounds like you've maybe even a little sick. Something's 0:00:14.520 --> 0:00:15.200 off in your voice. 0:00:15.440 --> 0:00:18.040 Yeah, I got a I caught something probably from my youngest. 0:00:18.200 --> 0:00:19.840 Who knows what these kids bring home. But I was 0:00:20.320 --> 0:00:22.280 kind of down for the count for about forty eight hours. 0:00:22.760 --> 0:00:25.280 And then I love that feeling when your immune system 0:00:25.360 --> 0:00:28.240 starts to take the lead and you're like, oh, yeah, here, right, 0:00:28.240 --> 0:00:33.040 here we come. And then I also had some antibiotics 0:00:33.120 --> 0:00:35.600 left over from the dentist. It's like dropping bombs on 0:00:35.640 --> 0:00:35.960 that thing. 0:00:36.080 --> 0:00:40.519 Okay, well, welcome back in Happy twenty twenty five because 0:00:40.520 --> 0:00:43.800 it's still new in the year and I know predictions 0:00:43.800 --> 0:00:46.720 are a thing and the market has not been off 0:00:46.760 --> 0:00:48.599 to a great start, but it felt like a good 0:00:48.680 --> 0:00:52.720 moment to actually still talk about what might happen with 0:00:52.760 --> 0:00:53.600 the little crystal ball. 0:00:54.120 --> 0:00:58.120 Yeah, everybody has predictions in the cell sid It's like, oh, 0:00:58.160 --> 0:00:59.840 the market has a forty per chance of going up, 0:00:59.880 --> 0:01:03.080 and it's also opaque, and I don't know, it's like safe. 0:01:03.480 --> 0:01:05.200 There's a couple of people out there that make very 0:01:05.200 --> 0:01:08.200 specific predictions and they end up going back and like 0:01:08.280 --> 0:01:10.960 saying was I right or wrong? I love that because 0:01:11.000 --> 0:01:12.200 you don't get that a lot from a lot of 0:01:12.200 --> 0:01:16.120 the prognosticators out there. This guy, Nate jerrasi from the 0:01:16.120 --> 0:01:19.800 ETF Store, fellow ETF nerd veteran of the industry, has 0:01:19.840 --> 0:01:24.560 five predictions every year, and he these are really interesting predictions. 0:01:24.600 --> 0:01:26.840 I agree with three of the five, only Joel, but 0:01:27.240 --> 0:01:29.199 I think it's gonna be fun to unpack these because 0:01:29.240 --> 0:01:31.640 they all really tap into some huge themes that we're 0:01:31.640 --> 0:01:33.080 probably gonna cover us of the year as well. 0:01:33.400 --> 0:01:36.840 So joining us on this episode Nate Jersey, president of 0:01:37.520 --> 0:01:41.360 the ETF Store. He's also the host of ETF Prime, 0:01:41.520 --> 0:01:46.480 another ETF podcast, as well as Vildonna Hirich of Bloomberg News. 0:01:46.800 --> 0:01:51.919 She's a crossasser reporter. This time on Trillions. Nate Jerrasey's 0:01:52.040 --> 0:01:58.360 predictions for twenty twenty five. Nate, Vildona, Welcome to Trillions. 0:01:58.720 --> 0:02:01.440 Thanks for having us, a pleasure to be here. 0:02:01.640 --> 0:02:05.560 Okay, so, Nat, you've been doing predictions since twenty eighteen. 0:02:06.120 --> 0:02:10.440 According to this little helpful memo, you started really strong, 0:02:10.560 --> 0:02:13.280 you were like five for five, but then last year, 0:02:14.120 --> 0:02:16.120 well ever since then, things have been kind of trending. 0:02:16.160 --> 0:02:20.920 Downward and last year one for five. Why should we 0:02:20.960 --> 0:02:22.799 listen to you in your predictions. 0:02:23.440 --> 0:02:25.880 Well, first of all, I will say, from twenty eighteen 0:02:25.919 --> 0:02:28.840 to twenty twenty two, I went nineteen for twenty four 0:02:28.919 --> 0:02:31.480 or twenty five, which is pretty darn good. You're right. 0:02:31.560 --> 0:02:35.240 The past two years have been brutal overall. Actually I've 0:02:35.240 --> 0:02:38.440 gone two for ten though, I will say, and Eric 0:02:38.520 --> 0:02:40.720 knows this, I did predict last year that spot Bitcoin 0:02:40.720 --> 0:02:44.080 ETFs would obliterate every single ATF launch record, which I 0:02:44.120 --> 0:02:46.320 clearly nailed out one that should be worth at least 0:02:46.320 --> 0:02:48.880 an extra point or two. But Joel, I feel good 0:02:48.919 --> 0:02:50.440 this year. I'm ready to get back on track. 0:02:50.480 --> 0:02:54.560 Okay, Well, past performance not indicative of future performances. As 0:02:54.600 --> 0:02:57.160 we know. Eric tell us about Nate because you go 0:02:57.240 --> 0:03:00.240 on his podcast a lot, right, Like, what statue does 0:03:00.240 --> 0:03:01.079 he have in the industry? 0:03:01.560 --> 0:03:03.400 Well, I met him because I heard there was this 0:03:03.480 --> 0:03:06.799 like radio show about ETFs that was delivered through ESPN 0:03:06.919 --> 0:03:09.280 Radio or something, and this was back in like two 0:03:09.320 --> 0:03:12.560 thousand and nine when it was very nascent industry, and 0:03:12.639 --> 0:03:14.760 I listened to it and it opens with the who's 0:03:14.960 --> 0:03:17.400 won't get fooled again? You know that it's a great intro, 0:03:18.080 --> 0:03:19.880 and I was like, who are these guys? And they 0:03:20.080 --> 0:03:22.960 they would they came in from like the Midwest, and 0:03:23.000 --> 0:03:25.560 they would they would go back and forth about ETFs, 0:03:25.600 --> 0:03:27.640 and I was like, Oh, this is great. But what 0:03:27.800 --> 0:03:30.240 made them extra level was they are managing money. 0:03:30.280 --> 0:03:32.120 They are advisors, so. 0:03:32.080 --> 0:03:37.840 They have that interaction with the actual investor, which to 0:03:37.920 --> 0:03:41.880 me helps their opinion of ETF's actually resonate more. And 0:03:41.920 --> 0:03:45.240 so I think both of us, in separate places, me 0:03:45.280 --> 0:03:48.320 and Philadelphia, him and Kansas City sort of like saw 0:03:48.360 --> 0:03:50.560 the ETF as being a big deal, you know, early, 0:03:51.000 --> 0:03:54.040 and so we had that sort of kindred spirit. And 0:03:54.040 --> 0:03:56.200 then when I met him, it was obviously like you know, 0:03:56.880 --> 0:03:58.400 mutual appreciation society. 0:03:58.880 --> 0:04:02.440 All Right, Nate, you're gonna wan to drop your predictions 0:04:02.480 --> 0:04:05.000 on us, and then we're gonna comment on them, and 0:04:05.040 --> 0:04:07.880 we'll try and be friendly about it, but maybe critical too. 0:04:08.600 --> 0:04:08.720 Uh. 0:04:08.960 --> 0:04:12.200 Okay, let's hear your first prediction. Okay. 0:04:12.240 --> 0:04:15.400 Prediction number one is that either the I Shares s 0:04:15.480 --> 0:04:18.279 and P five hundred ETF TICK or IVV or the 0:04:18.400 --> 0:04:21.760 Vanguard S and P five hundred ETF TICK or VO, 0:04:22.400 --> 0:04:25.960 either one or both will chot fees this year in 0:04:26.000 --> 0:04:28.240 an attempt to capture the ETF crown. 0:04:28.920 --> 0:04:32.279 That ETF chrowme belongs to Spy. 0:04:32.240 --> 0:04:34.400 The spider S and P five hundred ETF. 0:04:34.760 --> 0:04:37.799 Okay, so within the S and P five hundred ETFs 0:04:37.839 --> 0:04:41.040 you're predicting this is this is a year that it's 0:04:41.080 --> 0:04:43.760 gonna get fierce, even fiercer. 0:04:45.520 --> 0:04:49.120 Yeah. And look, people have predicted for several years, including myself, 0:04:49.120 --> 0:04:53.080 that either IVV or VU would overtake SPY in assets. 0:04:53.120 --> 0:04:56.279 But that's not my prediction here. I think that having 0:04:56.320 --> 0:05:00.800 the largest ETF buy assets actually means something to these issuers. 0:05:01.080 --> 0:05:02.719 And the way that I alloy out this prediction to 0:05:02.760 --> 0:05:05.960 you is I spoke with Black Rocks Rachel Laguire back 0:05:05.960 --> 0:05:08.560 in December and she told me that the I shares 0:05:08.560 --> 0:05:11.560 Bitcoin ETF, which we can talk about crypto in a minute, 0:05:11.680 --> 0:05:13.640 but she said that was attracting a lot of new 0:05:13.680 --> 0:05:17.839 investors who were then actually looking at other I shares ETFs. 0:05:18.120 --> 0:05:21.120 So in other words, the bitcoin ETF was serving as 0:05:21.160 --> 0:05:24.599 like a magnet to bring in investors who then bought 0:05:24.680 --> 0:05:28.000 other I shares ETFs. I think it's a similar situation 0:05:28.360 --> 0:05:30.920 with these S and P five hundred ETFs. Right if 0:05:30.960 --> 0:05:34.839 an investor chooses, say IVV, I think they're much more 0:05:34.920 --> 0:05:37.760 likely to look at other I shares ETFs, and the 0:05:37.800 --> 0:05:40.960 issuers know this, And since these ETFs all do the 0:05:40.960 --> 0:05:43.080 same thing, they invest in the S and P five hundred. 0:05:43.360 --> 0:05:45.599 I think it really comes down to fees, And so 0:05:45.680 --> 0:05:47.640 I think one of these issuers is going to chop 0:05:47.680 --> 0:05:50.480 fees because they want that ETF crowd but want. 0:05:50.440 --> 0:05:54.120 These back already, like just like barely existent, like they're 0:05:54.160 --> 0:05:55.240 so cheap to begin with. 0:05:55.320 --> 0:05:58.440 Yeah, they're three basis points. I don't think investors really 0:05:58.480 --> 0:06:01.400 trust zero or want zero, but two or one maybe. 0:06:01.640 --> 0:06:04.640 I think it has to be Blackrock. Vanguard probably doesn't 0:06:04.680 --> 0:06:07.760 need to do it, and I've actually advised them, instead 0:06:07.760 --> 0:06:10.159 of cutting fees anymore, put that money towards customer service 0:06:10.200 --> 0:06:11.920 next time you have that extra profit that you need 0:06:11.960 --> 0:06:15.840 to spend. But I could see Blackrock doing it in 0:06:15.880 --> 0:06:19.720 your I think, so I agree with this probably, I 0:06:19.720 --> 0:06:20.640 definitely agree. 0:06:20.360 --> 0:06:22.680 That VU will take over a spy this year. 0:06:23.000 --> 0:06:25.760 Right now, WU is ninety five percent of the way 0:06:25.800 --> 0:06:27.960 to spy at the beginning of the year. Last year 0:06:27.960 --> 0:06:30.279 it was ninety percent. It makes up five percent every year, 0:06:30.320 --> 0:06:32.599 So do the math. It's probably going to pass it 0:06:32.600 --> 0:06:37.800 this year. IVV probably can't catch VU in this because 0:06:37.839 --> 0:06:40.200 they don't take in as much flows. So they to 0:06:40.279 --> 0:06:42.720 me if they cut the fee, and you know Blackrock 0:06:42.839 --> 0:06:47.080 is very motivated by beating Vanguard. I could see IVV 0:06:47.160 --> 0:06:50.679 cutting the fee, then then he may see Vanguard tie. 0:06:51.040 --> 0:06:53.880 I could see it. So I'm eighty percent I agree 0:06:53.880 --> 0:06:56.560 with the fee cut. I'm one hundred percent that I 0:06:56.600 --> 0:06:58.279 think VU will pass Spy this year. 0:06:59.000 --> 0:07:02.000 A wildcard that's out there is SPLG, which is a 0:07:02.040 --> 0:07:04.720 spider portfolios and P five hundred ETF, so we call 0:07:04.800 --> 0:07:08.440 this mini Spy and its expense ratio is only two 0:07:08.480 --> 0:07:12.640 basis points, so it's actually cheaper than both IVV and VU, 0:07:12.840 --> 0:07:15.160 and it finished in the top ten of ETF inflows 0:07:15.240 --> 0:07:17.360 last year. I just don't think that I shares in 0:07:17.440 --> 0:07:21.560 Vanguard like a competitor being out there who is lower cost. 0:07:22.040 --> 0:07:24.320 The other thing I'll mention, I agree with you Eric 0:07:24.320 --> 0:07:28.200 in terms of Vanguard allocating money towards technology and customer service. 0:07:28.240 --> 0:07:31.640 But that Vanguard flywheel, it's like they can't help themselves. 0:07:31.720 --> 0:07:31.840 Right. 0:07:31.880 --> 0:07:34.640 We know that as their funds grow that allows them 0:07:34.640 --> 0:07:37.520 to further leverage their back office economies of scale. That 0:07:37.560 --> 0:07:39.360 allows them to run the fund even cheaper, and then 0:07:39.360 --> 0:07:42.760 they pass those savings on to investors. With Vanguard's mutual 0:07:42.800 --> 0:07:45.480 ownership structure. I just think you have to assume that 0:07:45.600 --> 0:07:48.800 as VU grows, they're going to reach a point where 0:07:48.840 --> 0:07:50.400 investors will get a fee cut. I think it's a 0:07:50.440 --> 0:07:52.840 matter of time. So maybe I'm cheating a little bit 0:07:52.880 --> 0:07:55.160 with this prediction because I just think that's going to happen. 0:07:55.480 --> 0:07:58.120 My only counter to that is they're really pushing their 0:07:58.160 --> 0:08:00.840 active move because they were late, and they may choose 0:08:00.880 --> 0:08:03.000 to use that to cut the fees on those funds 0:08:03.560 --> 0:08:07.440 to be the cheapest vandguard Vanguard. Yeah, but again we'll 0:08:07.440 --> 0:08:09.960 see if black Rock cuts. I just I could see 0:08:10.080 --> 0:08:14.600 Vanguard responding. But again, we're at three already, maybe two. 0:08:15.280 --> 0:08:16.880 I think once you get to one or zero, it 0:08:16.920 --> 0:08:19.280 starts to look like gimmicky, Like the customer's almost like, 0:08:19.320 --> 0:08:23.040 you know, I don't want to have be like I 0:08:23.040 --> 0:08:24.480 don't want to pay nothing, because then I got to 0:08:24.480 --> 0:08:26.240 worry about how you're going to like screw me somewhere else. 0:08:26.320 --> 0:08:27.720 Phil Donna, what do you think? 0:08:27.920 --> 0:08:31.000 I have a couple thoughts. One is just conversationally based, 0:08:31.040 --> 0:08:35.160 Like if I'm talking to non market civilians. Maybe we 0:08:35.160 --> 0:08:37.400 can call it like my high school friends. If they're 0:08:37.440 --> 0:08:40.240 talking about the market, they say I'm buying vou like 0:08:40.280 --> 0:08:45.120 they don't. I never hear IVV in conversations. But the 0:08:45.160 --> 0:08:48.600 other point that Nate makes and his predictions is that 0:08:48.880 --> 0:08:51.880 even if they do cut, one way for them to 0:08:51.920 --> 0:08:54.920 offset is through securities lending, which a bunch of these 0:08:55.400 --> 0:08:59.760 issuers do, maybe almost all of the issuers do, so 0:08:59.800 --> 0:09:02.880 that it's one way for them to make up for 0:09:03.040 --> 0:09:05.840 cutting the fees, which is really interesting. It's an interesting trend. 0:09:06.320 --> 0:09:10.680 But if SBOG already is at point two, you know, 0:09:11.080 --> 0:09:13.400 it's been like that for a while, why if change 0:09:13.559 --> 0:09:16.720 or if for IVV wanted to cut, why haven't they yet. 0:09:16.800 --> 0:09:20.400 Yeah? Yeah, so take that, Nate, Take that, Nate, Okay, 0:09:20.440 --> 0:09:32.360 we'll see what happens. Okay. Prediction number two, Nate, Okay. 0:09:32.400 --> 0:09:34.720 Prediction number two is that this will be the year 0:09:34.840 --> 0:09:38.440 of crypto ETFs. Notice I'm not saying spot bitcoin ETFs. 0:09:38.440 --> 0:09:40.920 That was twenty twenty four. I think twenty twenty five 0:09:40.920 --> 0:09:43.839 will be the year of crypto ETFs. And I have 0:09:44.000 --> 0:09:46.720 ten predictions. I won't go through all of these, but 0:09:46.760 --> 0:09:51.800 they range everything from spots Salona ETFs will be approved 0:09:52.120 --> 0:09:56.320 to Vanguard, will allow clients Brokeragje access to Spot Bitcoin 0:09:56.360 --> 0:10:00.480 and ethere ETFs. Spot ethere ETF staking is a proved 0:10:00.920 --> 0:10:05.000 It's really a cornucopia of predictions here that I think 0:10:05.040 --> 0:10:09.320 all tie into a huge tailwind behind crypto ETFs. 0:10:10.200 --> 0:10:14.520 So do you think to kind of summarize, are these 0:10:14.559 --> 0:10:17.320 going to be coin specific ETFs or are we going 0:10:17.360 --> 0:10:21.160 to start to see the indexing of crypto into a product. 0:10:22.040 --> 0:10:24.040 I think it will be both. So I think we 0:10:24.080 --> 0:10:28.640 will see spot Salona ETF's Spot XRP ETFs, their filings 0:10:28.679 --> 0:10:32.480 from both Grayscale and Bitcoin for index based ETFs. I 0:10:32.480 --> 0:10:34.839 think we're going to see everything, and I'll just tell 0:10:34.840 --> 0:10:38.160 you in a nutshell, really, this is all one huge 0:10:38.240 --> 0:10:41.400 bet on the Trump administration that they're actually going to 0:10:41.480 --> 0:10:45.480 deliver on their campaign promise or the innuendo that we 0:10:45.559 --> 0:10:47.760 heard that they're going to be pro crypto, and if 0:10:47.800 --> 0:10:50.839 you look right now, the early indications are that they will. 0:10:51.120 --> 0:10:54.000 Right we have Paul Atkins set to succeed Gary Gensler's 0:10:54.080 --> 0:10:59.240 SEC chair. He's clearly viewed as being pro crypto. David Sachs, 0:10:59.640 --> 0:11:02.720 who he runs a VC fund he's sought to be 0:11:02.840 --> 0:11:06.480 very tech savvy. He's filling this new crypto's our role. 0:11:06.800 --> 0:11:10.839 There's also a Crypto Advisory Council being formed. The point 0:11:10.840 --> 0:11:12.960 here is that it does look like the Trump administration 0:11:13.040 --> 0:11:16.000 will be much more supportive of crypto. And if that's 0:11:16.040 --> 0:11:19.520 the case, then I'm highly optimistic on all ten of 0:11:19.559 --> 0:11:22.719 these crypto predictions, or I should say nine to ten. 0:11:22.760 --> 0:11:24.959 The vanguard one we can talk about. Not quite as 0:11:24.960 --> 0:11:25.640 confident there. 0:11:26.120 --> 0:11:28.720 Yeah, I agree with that, he says, fifty launches. Yeah, 0:11:28.720 --> 0:11:31.880 it's going to be like instead of the coin Tucky 0:11:31.920 --> 0:11:34.960 Derby was just Bitcoin, it's gonna be like this all 0:11:35.000 --> 0:11:39.200 out like Derby Derby. Yeah, universal alt coin Derby. It's 0:11:39.240 --> 0:11:40.040 gonna get crazy. 0:11:40.120 --> 0:11:40.280 Now. 0:11:40.280 --> 0:11:41.880 A lot of this stuff is just going to get ignored. 0:11:41.920 --> 0:11:44.040 I mean, you still think bitcoin ETFs take the lion's 0:11:44.040 --> 0:11:46.640 share of this category. But you know, one of these 0:11:46.640 --> 0:11:48.400 coins is going to have a nice run and gonna 0:11:48.400 --> 0:11:51.280 be like the playful thing for a minute. But it's 0:11:51.280 --> 0:11:53.319 still going to be prominently Bitcoin bringing in the big 0:11:53.360 --> 0:11:53.920 boy flows. 0:11:54.080 --> 0:11:56.360 So are you two for two with are you like 0:11:56.440 --> 0:11:57.440 is it one and a half or no? 0:11:57.360 --> 0:11:59.520 No, No, I'm gonna agree with this one. Too, except 0:11:59.600 --> 0:12:02.800 number ten, So I guess I'm one tenth. This isd 0:12:02.880 --> 0:12:06.600 Vanguard capitulation allows clients broker j access to spot bitcoin 0:12:06.640 --> 0:12:09.760 and E three ETFs. I think it happens. I just 0:12:09.760 --> 0:12:11.960 think you're early. I think it takes. It's gonna take 0:12:11.960 --> 0:12:14.360 a littlehile because remember Vanguard's pretty proud and they came 0:12:14.360 --> 0:12:17.000 out and said, we don't like this. It doesn't have 0:12:17.080 --> 0:12:19.600 it can wreak havoc in portfolios, it has no real 0:12:19.640 --> 0:12:23.120 world usage, and they let GLD trade. That's a total 0:12:23.160 --> 0:12:25.319 slap in the face the bitcoin. The crypto people are 0:12:25.320 --> 0:12:27.560 so pissed off by this, and I tell them, listen, 0:12:28.320 --> 0:12:30.559 she's just not that into you, you know what I mean, 0:12:30.640 --> 0:12:33.480 Like you got to get over it. Because they they're like, no, 0:12:33.720 --> 0:12:36.000 Vanguard will bend the knee, and I'm like, Ben, what 0:12:36.000 --> 0:12:39.559 are you talking about. Vanguard is doesn't need you. 0:12:39.960 --> 0:12:41.480 So they guards not thinking about you. 0:12:41.520 --> 0:12:42.800 They're not thinking about you yet. 0:12:42.800 --> 0:12:45.959 It's like that meme, so Joel, I think in time, 0:12:46.720 --> 0:12:51.000 Vanguard may relent simply because if bitcoin becomes a strategic 0:12:51.120 --> 0:12:55.480 preserve for the US, if there's more advisory assets in 0:12:55.559 --> 0:12:58.520 Vanguard that demand crypto is part of the portfolio. If 0:12:58.520 --> 0:13:02.160 Selim Ramsey has more time to like grow his influence there. 0:13:02.200 --> 0:13:04.160 I know he launched I a bit at black Rock, 0:13:04.240 --> 0:13:06.920 so the new CEO there is clearly a fan. There's 0:13:06.960 --> 0:13:10.000 a couple of things that will germinate. I just think 0:13:10.000 --> 0:13:11.240 they take longer than the year, Nate. 0:13:11.679 --> 0:13:13.360 Okay, Joe, Well, you should know. 0:13:14.000 --> 0:13:16.600 Any time that I'm wrong on a prediction, I always 0:13:16.640 --> 0:13:19.439 say I'm just too early. Eric knows that, and Eric 0:13:19.440 --> 0:13:21.320 and I tend to be very early on a lot 0:13:21.360 --> 0:13:21.880 of predictions. 0:13:22.600 --> 0:13:24.600 Right on say I don't do these, but I do 0:13:24.720 --> 0:13:27.400 bets with Todd Rosenblue. That's my version of the predictions. 0:13:27.440 --> 0:13:30.120 And I'm early. I've never been wrong. I've just been early. 0:13:30.400 --> 0:13:34.240 But Nate himself in his prediction sites Howard Mark saying 0:13:34.280 --> 0:13:37.079 being too far ahead of your time is indistinguishable from 0:13:37.120 --> 0:13:41.240 being wrong, So being too early could mean you're wrong. 0:13:41.320 --> 0:13:44.000 Okay, yeah, so no rebuttal date that's what you get. 0:13:44.720 --> 0:13:46.600 What do you think of more crypto ETFs? 0:13:46.760 --> 0:13:50.320 I think I agree with Eric and Nate in that 0:13:50.400 --> 0:13:52.800 we'll see, you know, like throw all the jargon words 0:13:52.840 --> 0:13:58.240 in covered call zero DT, inverse leverage two x X, 0:13:59.440 --> 0:14:01.640 all kinds of weird stuff. I don't know about the 0:14:01.720 --> 0:14:05.560 Vanguard part. I mean, I'm gonna trust what Eric says here, 0:14:05.600 --> 0:14:07.680 because he's like the Vanguard whisperer. 0:14:08.320 --> 0:14:10.960 Okay, Nate, now go ahead, proceed with here Rebut. 0:14:10.679 --> 0:14:14.640 Okay, so Eric said the magic words, which is Selim Ramji, 0:14:14.960 --> 0:14:18.000 the new Vanguard CEO. So before he came over to Vanguard, 0:14:18.280 --> 0:14:21.480 he was instrumental in moving the eyes Shares BITCOINYTF forward 0:14:21.520 --> 0:14:25.200 while he was at Black Rock. And look, it's one 0:14:25.200 --> 0:14:28.960 thing for Vanguard to not offer their own spot crypto ETFs. 0:14:29.080 --> 0:14:32.200 That's perfectly fine, but it's another thing to treat clients 0:14:32.240 --> 0:14:35.960 like their kids, like they can't have ice cream or whatever. 0:14:36.280 --> 0:14:40.400 And I think Selim knows that he can't just withhold 0:14:40.480 --> 0:14:43.480 access to these products. I think Vanguard will capitulate on 0:14:43.520 --> 0:14:46.480 this decision to gate access to crypto ETFs. And the 0:14:46.520 --> 0:14:49.000 other thing that I would say is, like myself, I 0:14:49.040 --> 0:14:52.640 love Vanguard's investment approach. I personally invest in low cost 0:14:52.880 --> 0:14:56.080 stock and bond funds, as do our clients, but I 0:14:56.080 --> 0:14:59.880 also like a little crypto, a little hot sauces Eric call. 0:15:00.680 --> 0:15:03.720 I don't think I'm alone. Yeah, well, I just think 0:15:03.800 --> 0:15:08.840 Vanguard is actually alienating younger investors who view crypto as 0:15:08.880 --> 0:15:11.760 a normal part of a portfolio, and at some point 0:15:11.760 --> 0:15:13.600 I think that's going to impact their business. And I 0:15:13.640 --> 0:15:15.880 think somebody like Salim's going to see the bigger picture. 0:15:16.040 --> 0:15:19.560 Okay, all right, all right, speaking of bigger picture private markets, 0:15:19.760 --> 0:15:21.880 what's your prediction? Your third prediction? 0:15:22.840 --> 0:15:27.080 Yeah, So, private credit ETFs received a tremendous amount of 0:15:27.080 --> 0:15:30.080 attention last year. There was this filing from State Street 0:15:30.120 --> 0:15:34.840 for the Spider Apollo Public and Private Credit ETF, and 0:15:35.240 --> 0:15:37.920 a lot of people in the industry are saying this 0:15:38.000 --> 0:15:40.680 is going to be the next big thing. I just 0:15:40.720 --> 0:15:43.320 can't get my head around this and how this will work. 0:15:43.840 --> 0:15:46.880 And you know, very simply, what State Street is trying 0:15:46.880 --> 0:15:50.080 to do is partner with Apolo, where Paula would be 0:15:50.120 --> 0:15:52.880 the sole liquidity provider. In other words, they're going to 0:15:52.920 --> 0:15:56.000 be both the buyer and the seller of the private 0:15:56.080 --> 0:15:59.440 credit for this private credit ETF. They'd obviously determine the 0:15:59.480 --> 0:16:02.360 value of this stuff as well. That seems like a 0:16:03.040 --> 0:16:06.040 clear conflict of interest to me. Right, if they own 0:16:06.640 --> 0:16:09.520 private credit that they believe, say is overvalued, how do 0:16:09.520 --> 0:16:11.400 we know that's not what they're selling to State Street 0:16:11.760 --> 0:16:14.360 or vice versa. If State Street needs to redeem shares. 0:16:14.640 --> 0:16:16.800 How do we know Apollo isn't buying the most attractive 0:16:16.800 --> 0:16:19.160 private credit out of the ETF, especially if you were 0:16:19.160 --> 0:16:22.560 in a market where it's under duress. So I just 0:16:22.600 --> 0:16:25.520 think this whole thing is simply a conflict. And I'm 0:16:25.520 --> 0:16:28.680 telling you that the SEC hates conflicts of interest like this. 0:16:29.080 --> 0:16:31.800 So even if we have a more lenient SEC under 0:16:31.840 --> 0:16:35.200 the Trump administration, I just don't see them getting comfortable 0:16:35.760 --> 0:16:37.720 with this. And then the other piece that I'll add 0:16:37.760 --> 0:16:41.880 here is private credit is by definition private right because 0:16:41.880 --> 0:16:45.000 it doesn't trade on a public exchange. It's essentially a 0:16:45.040 --> 0:16:49.400 liquid whereas ETFs or daily liquidity vehicles, and so you 0:16:49.440 --> 0:16:52.120 have a true mismatch here. I just don't see how 0:16:52.160 --> 0:16:57.160 that can work where you put investor's best interest first. 0:16:57.360 --> 0:16:59.960 We have to add. So Bloomberg reported a month ago 0:17:00.120 --> 0:17:03.880 that Apollo is already the desk that they have set 0:17:03.960 --> 0:17:07.360 up to try to facilitate the creation of the CTF. 0:17:07.359 --> 0:17:10.320 It's already up and running. They're already trading this stuff. 0:17:10.680 --> 0:17:14.000 I mean, I think Nate's point about being conflict of interests, 0:17:14.440 --> 0:17:16.439 it's a good point. And there's been some people saying that, 0:17:16.480 --> 0:17:18.520 like Apollo will be able to dump all the stuff 0:17:18.560 --> 0:17:21.080 they don't want to actually own into the ETF. But 0:17:22.000 --> 0:17:24.600 I would think that State Street, to me, is the 0:17:24.600 --> 0:17:27.520 offset of that conflict of interest. That's who's on the label, 0:17:28.040 --> 0:17:30.400 and State Street is going to make sure that their 0:17:30.400 --> 0:17:31.520 investors don't get screwed. 0:17:32.119 --> 0:17:33.440 So I trust State. 0:17:33.280 --> 0:17:36.800 Street enough, and they're thirty two year history of running 0:17:36.840 --> 0:17:43.040 ETFs well, and I just don't want my crap any 0:17:43.080 --> 0:17:43.600 other way. 0:17:43.720 --> 0:17:44.880 I want it in an ETF. 0:17:45.359 --> 0:17:47.479 You may say that privates are better in an interval 0:17:47.520 --> 0:17:50.480 fund or even a mutual fund or a hedge fund, 0:17:50.560 --> 0:17:52.560 but I don't trust any of those. I'm not I 0:17:52.640 --> 0:17:55.080 don't want to pay that money, and I'm right now 0:17:55.080 --> 0:17:56.960 I'm in a character of all the investors. 0:17:57.000 --> 0:17:58.000 I'm not actually me. 0:17:58.720 --> 0:18:01.520 That's how investors have decided to like That's what they've 0:18:01.560 --> 0:18:04.240 been showing with their feet. They just wanted an ETF 0:18:04.480 --> 0:18:07.240 and Nate. There's plenty of ill liquid stuff in ETFs. 0:18:07.280 --> 0:18:07.680 Currently. 0:18:08.119 --> 0:18:11.520 There's times where stock markets close. In the ETF trades 0:18:12.080 --> 0:18:14.679 HYD which is high yield muni's during COVID trade at 0:18:14.720 --> 0:18:18.240 twenty nine percent discount. I think ETF investors would rather 0:18:18.359 --> 0:18:22.480 have this in an imperfect way with discounts or stretched 0:18:22.560 --> 0:18:26.479 arbitrage bands and even a potential for conflict of interest. 0:18:27.080 --> 0:18:30.040 Then go to some interval fund and I will show 0:18:30.080 --> 0:18:34.560 you proof. The XOVR, which is the private equity public 0:18:34.560 --> 0:18:38.119 equity crossover fund that owns SpaceX, has ten percent SpaceX. 0:18:38.400 --> 0:18:39.920 That has two hundred million already. 0:18:40.240 --> 0:18:43.720 That's double Kathy Wood's Arc Venture Fund, which was launched 0:18:43.720 --> 0:18:46.600 at the height of arcmania, and that has one hundred million. 0:18:46.800 --> 0:18:48.000 But it's an interval fund. 0:18:48.440 --> 0:18:51.440 That's like making a great album, but you're only putting 0:18:51.480 --> 0:18:53.000 it on eight track cassette tapes. 0:18:53.080 --> 0:18:53.919 Who's going to buy it? 0:18:54.640 --> 0:18:58.480 So, but Nate isn't saying that this ETF will never come, right, 0:18:58.720 --> 0:19:00.600 He's just saying it won't come in twenty twenty five. 0:19:01.480 --> 0:19:04.159 Well, he's saying that this filing as it is. I 0:19:04.240 --> 0:19:06.720 will okay, I mean, I'll bet you. I will bet 0:19:06.760 --> 0:19:10.800 that the Apollo State Street ETF will launch this year. 0:19:11.400 --> 0:19:13.520 You're betting, Nate, Yeah, steak dinner. 0:19:14.840 --> 0:19:17.640 I will take that, okay, because I stand behind my 0:19:17.640 --> 0:19:20.399 my predictions. Hey, here's here's my question, though, where do 0:19:20.440 --> 0:19:23.000 we draw the line? Right? I think we would agree 0:19:23.040 --> 0:19:26.440 private credit is a liquid So what else can we 0:19:26.440 --> 0:19:30.200 put in an ETF wrapper? Is it art baseball cards? 0:19:30.640 --> 0:19:33.200 Yes, wine, Yes, where do you draw the line? 0:19:33.240 --> 0:19:38.000 So I just think ETF's sometimes trade like clothes unfunds 0:19:38.040 --> 0:19:41.600 in crisis. I just think you're gonna see a situation 0:19:41.680 --> 0:19:45.320 where ets become hybrid clothes und funds and they just 0:19:45.440 --> 0:19:48.400 trade away from the NAV. But people are like, I'll 0:19:48.400 --> 0:19:51.960 take that over getting screwed on these other kinds of vehicles. 0:19:53.040 --> 0:19:54.960 Do we still think this is the next big thing, Nate? 0:19:56.240 --> 0:19:58.399 I don't. And part of that is I'm not so 0:19:58.520 --> 0:20:02.639 sure that the average invest really needs access to private credit. 0:20:03.119 --> 0:20:06.280 I would make that argument right now that that's a 0:20:06.320 --> 0:20:08.919 frothy area of the market in general. But even if 0:20:09.000 --> 0:20:11.879 it wasn't, I don't know that the average sixty to 0:20:11.920 --> 0:20:16.200 forty investor needs the ability to access private credit. I 0:20:16.240 --> 0:20:18.760 don't know what this really adds to a portfolio other 0:20:18.800 --> 0:20:19.640 than complexity. 0:20:20.400 --> 0:20:23.879 That doesn't adding bitcoin to your portfolio also add complexity 0:20:24.040 --> 0:20:25.040 or a ton of crypto. 0:20:26.040 --> 0:20:29.399