WEBVTT - Sharon French Discusses Smart Beta ETFs 0:00:02.200 --> 0:00:06.800 This is Masters in Business with Barry Ridholts on Bloomberg Radio. 0:00:07.600 --> 0:00:10.440 This week on the podcast, I have an extra special guest. 0:00:10.760 --> 0:00:13.600 Her name is Sharon French and she is the head 0:00:13.680 --> 0:00:18.959 of Beta Solutions at Appenheimer Funds. She has a storied career, 0:00:19.480 --> 0:00:24.480 stopping at such places as JP Morrigan, Chase, Alliance, Bernstein, 0:00:24.960 --> 0:00:29.480 and black Rock, amongst others. She has been an instrumental 0:00:29.560 --> 0:00:32.800 person in the development and growth of the E t 0:00:33.000 --> 0:00:37.640 F sector as well as a very active participant in 0:00:37.680 --> 0:00:41.600 the E s G, Environmental, Social and Governance UH sector 0:00:41.680 --> 0:00:45.800 of investing. She is consistently named one of the most 0:00:45.840 --> 0:00:50.040 influential people in finance. Most recently Cranes had their list 0:00:50.120 --> 0:00:53.840 of forty women, but find a list of a hundred 0:00:54.080 --> 0:00:58.480 most influential women in markets, investing, finance, and Sharon is 0:00:59.040 --> 0:01:02.080 invariably on that list. You will find this to be 0:01:02.320 --> 0:01:07.440 an absolutely fascinating conversation. So, with no further ado, my 0:01:07.560 --> 0:01:14.080 conversation with Sharon French of Oppenheimer Funds. This is Masters 0:01:14.120 --> 0:01:19.199 in Business with Barry Ridholts on Bloomberg Radio. I'm Barry Ridholts. 0:01:19.240 --> 0:01:22.560 You're listening to Masters in Business on Bloomberg Radio. My 0:01:22.720 --> 0:01:26.280 special guest this week is Sharon French. She is the 0:01:26.400 --> 0:01:30.639 head of Beta Solutions at Oppenheimer Funds, where she also 0:01:30.760 --> 0:01:34.560 implements the firm's E s G efforts, as well as 0:01:34.640 --> 0:01:38.360 overseas a number of UH Smart Beta et F products 0:01:38.360 --> 0:01:41.920 and solutions. She has previously worked at such storied firms 0:01:41.959 --> 0:01:48.040 as Black Rock Alliance, Bernstein Chase, JP Morrigan Chase. She's 0:01:48.080 --> 0:01:51.120 a graduate of Wharton School of Business and serves on 0:01:51.160 --> 0:01:55.960 the board of Women in ETFs. Sharon French, Welcome to Bloomberg. 0:01:56.200 --> 0:01:58.240 Thank you, Barry. I'm glad to be here. We've been 0:01:58.280 --> 0:02:01.360 talking about doing this now for a long time. I'm 0:02:01.400 --> 0:02:04.760 glad we finally got you in the studios to have 0:02:04.880 --> 0:02:08.600 this conversation. Let's talk a little bit about your career. 0:02:08.720 --> 0:02:13.200 You began back at JP Morgan Chase when they were 0:02:13.280 --> 0:02:16.760 really a much smaller shop. Weren't they, Yes, Yes, down 0:02:16.760 --> 0:02:19.120 on Water Street, one Water Street, right across in the 0:02:19.120 --> 0:02:22.640 Staten Island Ferry. What was yeah? What were they like 0:02:22.800 --> 0:02:26.000 then and what was your role with them? Sure? So 0:02:26.320 --> 0:02:30.200 I graduated with a management degree concentration and finance. I 0:02:30.200 --> 0:02:34.200 went into a sort of global training program with them. Certainly, 0:02:34.440 --> 0:02:37.040 you know much smaller at the time, you know, still 0:02:37.160 --> 0:02:40.800 very regionally based. Um. You know, the the project that 0:02:40.880 --> 0:02:44.079 I was working on is really how to define profitability 0:02:44.080 --> 0:02:47.160 for their different product lines. Um. But I got a 0:02:47.240 --> 0:02:50.840 chance very early in my career to travel abroad too. 0:02:50.919 --> 0:02:52.720 I lived in Paris, I lived in London, and lived 0:02:52.720 --> 0:02:56.760 in Milan, Madrid, Frankfurt, doing cost studies with country managers 0:02:57.240 --> 0:03:00.400 and then making a recommendation to you know, either d 0:03:00.520 --> 0:03:03.280 market a product or or you know, sort of focus 0:03:03.360 --> 0:03:06.799 in a particular area. And so I was definitely over 0:03:06.840 --> 0:03:09.120 my skis. Looking back, I don't know that I knew 0:03:09.200 --> 0:03:11.440 really what I was doing, but I certainly learned a lot. Well, 0:03:11.520 --> 0:03:13.520 this is was just right out of grad school. They 0:03:13.520 --> 0:03:16.120 start sending you this was right out of undergrad. Yes, 0:03:16.360 --> 0:03:19.200 right out of undergrad So I was young. Yeah, yeah, 0:03:19.240 --> 0:03:21.119 but you have to work really hard the first year 0:03:21.120 --> 0:03:23.720 and then you know sort of um, you know, compete 0:03:23.760 --> 0:03:26.280 to go overseas. So thankfully, you know, I've never been 0:03:26.280 --> 0:03:29.839 showed a hard work and so they you know, gave 0:03:29.840 --> 0:03:32.280 me the opportunity and I jumped at it. So you 0:03:32.320 --> 0:03:35.960 go from Chase to Wharton, where do you go? So 0:03:36.120 --> 0:03:39.600 my undergrads from University of Delaware Wharton is my um 0:03:39.640 --> 0:03:44.040 my certified Investment Management Analyst designation, that's right. And so 0:03:44.040 --> 0:03:47.360 where did you go from from upen? Uh so? So 0:03:47.400 --> 0:03:49.880 then I just went straight into Chase, right, So I 0:03:50.160 --> 0:03:53.160 started my career in global banking, then moved into brokerage, 0:03:53.200 --> 0:03:56.240 then sset manager. Yeah so alright, so then you go 0:03:56.360 --> 0:03:58.440 from how how do you end up in black Rock 0:03:59.000 --> 0:04:01.440 right in the middle of the entire build out of 0:04:01.480 --> 0:04:03.720 ice Share. Yeah, yeah, that was fun. That was right 0:04:03.760 --> 0:04:05.760 after Larry Fink bought b G. I so right, I 0:04:05.800 --> 0:04:08.720 think that deal closed December two thousand nine. And look, 0:04:08.800 --> 0:04:12.240 you know, I certainly have an appreciation, a broad appreciation 0:04:12.280 --> 0:04:15.600 for financial services in general, because my journey and career 0:04:15.640 --> 0:04:20.240 progression was, like I said, global banking, wealth management, brokerage platforms. 0:04:20.520 --> 0:04:22.600 Really sure, some Leman brothers up through what is now 0:04:22.640 --> 0:04:26.320 called Morgan Stanley UM, and then I went into asset management, 0:04:26.360 --> 0:04:30.200 always on the active or fundamental active side, right, which 0:04:30.240 --> 0:04:31.760 is what people like you and I grew up with 0:04:31.800 --> 0:04:35.720 the mutual fund. But what really drove me crazy at 0:04:35.720 --> 0:04:40.400 Alliance Bernstein was that we would go into an institutional presentation. Right, 0:04:40.440 --> 0:04:42.400 so you've got the committee there, you've got the chief 0:04:42.400 --> 0:04:45.720 investment officer and would be trying to sell whatever strategy, 0:04:45.960 --> 0:04:49.559 and invariably, probably fifty percent of the time, we would 0:04:49.560 --> 0:04:54.200 lose to b G I Northern Trust State Street because 0:04:54.200 --> 0:04:57.640 of a passive mandate. And you know what I was 0:04:57.680 --> 0:05:00.839 trying to articulate to the chief investment officer is that 0:05:00.880 --> 0:05:04.160 the real prudent way to run the pension fund, as 0:05:04.200 --> 0:05:07.120 an example, is to figure out how to combine intelligent 0:05:07.200 --> 0:05:10.480 alpha with efficient beta so that there's really room for 0:05:10.520 --> 0:05:14.760 both of us. So what again, intellectually stuck in my 0:05:14.880 --> 0:05:19.240 brain is I cannot really as a practitioner talk about 0:05:19.279 --> 0:05:23.840 the indexed enhanced index or beta side of the business. 0:05:24.160 --> 0:05:27.000 And so I got a call from a recruiter, James Beck, 0:05:27.480 --> 0:05:30.200 wonderful recruiter here in New York City, and they had 0:05:30.360 --> 0:05:34.159 a position at I Shares And I loved Alliance Bernstein 0:05:34.600 --> 0:05:37.559 Loos Andrews, especially as a leader. Was was just a legend. 0:05:37.640 --> 0:05:40.800 They had such a fabulous research group, especially in the 0:05:40.880 --> 0:05:44.839 nineties right into the tie absolutely and Bernstein plus Alliance 0:05:44.920 --> 0:05:47.240 was sort of like boom right. It was just a 0:05:47.279 --> 0:05:50.120 fabulous combination. So I never thought I would leave, but 0:05:50.200 --> 0:05:54.560 this I had this nagging thing in my brain intellectually 0:05:54.640 --> 0:05:57.960 as a professional that I needed to satisfy. I needed 0:05:57.960 --> 0:06:01.240 to be able to talk about both sides of the 0:06:01.279 --> 0:06:06.200 investment management industry again as as a professional. So that's 0:06:06.240 --> 0:06:08.719 really why I went, and I gotta tell you, And 0:06:08.760 --> 0:06:10.960 of course I got you know, I got grilled, and 0:06:11.080 --> 0:06:13.680 everybody said to me, oh, you're going to the dark side, 0:06:13.800 --> 0:06:16.400 And I guess I suppose I did, But I did it, 0:06:16.560 --> 0:06:20.279 you know, deliberately. Well, by dark side you mean more 0:06:20.320 --> 0:06:23.680 efficient and lower cost or dark side just the company 0:06:23.760 --> 0:06:27.720 dark side anything passive right from fundamental active into the 0:06:27.839 --> 0:06:30.839 dark side of indexing. If you were, you were dead 0:06:30.960 --> 0:06:34.240 right when you say they're not mutually exclusive, they're complementary. 0:06:34.240 --> 0:06:36.560 And I don't understand why people, I guess when you're 0:06:36.560 --> 0:06:39.760 losing business and we've seen the flows have just been 0:06:40.160 --> 0:06:43.080 when you started at I Shares, did you ever imagine 0:06:43.680 --> 0:06:46.839 Vanguard would be five trillion, black Rock would be six trillion, 0:06:47.200 --> 0:06:49.680 and a decade of flows would shift from active to 0:06:49.720 --> 0:06:52.000 passes the way we've seen. No, I really didn't, And 0:06:52.080 --> 0:06:53.520 and look, you and I both know that. I think 0:06:53.520 --> 0:06:56.279 two thousand and eight really propelled that forward dramatically. But 0:06:56.279 --> 0:06:58.560 but when I joined I shares Vanguard and State three. 0:06:58.600 --> 0:07:01.160 We're certainly a of I shares in terms of the 0:07:01.200 --> 0:07:04.160 league tables, but I shows came on strong. And one 0:07:04.160 --> 0:07:06.400 of the big strategic moves that I Share has made, 0:07:06.800 --> 0:07:08.840 and this is right when Mark Weedman took over in 0:07:08.880 --> 0:07:12.440 two thousand and eleven, maybe nine months after, is they 0:07:12.480 --> 0:07:15.400 you know, they were losing the core positions to Vanguard, 0:07:15.560 --> 0:07:17.840 right they were, they were being relegated to the satellites, 0:07:18.240 --> 0:07:21.000 and so they came out with the core series right 0:07:21.200 --> 0:07:24.920 sort of replicating Vanguard's core products at a lower phase, 0:07:25.440 --> 0:07:27.560 and that was a big game change. I mean, certainly 0:07:27.680 --> 0:07:31.200 us m V, which rivalist SPLV and had a better construction, 0:07:31.240 --> 0:07:33.480 took a lot of assets in low vall. So they 0:07:33.560 --> 0:07:37.559 you know, they really made a lot of good strategic moves. 0:07:37.920 --> 0:07:40.720 I'm fascinated by Larry Fink in two thousand and nine, 0:07:40.720 --> 0:07:44.240 when everybody is still stinging from the g f C 0:07:44.520 --> 0:07:47.200 from the financial crisis, says, no, No, now is the 0:07:47.240 --> 0:07:49.280 time when we're going to make a giant purchase and 0:07:49.400 --> 0:07:53.160 totally reformulate the firm. That is one of the great 0:07:53.560 --> 0:07:56.920 all time pivots in history. And if you recall the 0:07:57.000 --> 0:08:00.080 time everyone thought, oh, my gosh, he's totally overpaying b 0:08:00.960 --> 0:08:03.720 everybody's laughing. He's laughing all his way to the bank. 0:08:04.280 --> 0:08:08.960 And now they are literally the biggest shop in the world. So, 0:08:08.960 --> 0:08:11.000 so you were there at a time when the growth 0:08:11.160 --> 0:08:15.320 was really rampant. What was that experience like? So here's 0:08:15.360 --> 0:08:17.880 how I described in many of us who have been 0:08:17.880 --> 0:08:20.120 at I Shares and have since left and gone on 0:08:20.200 --> 0:08:25.600 to really wonderful things. It's like going to boot camp 0:08:25.800 --> 0:08:27.840 for the Special Forces. I knew you were going to 0:08:27.960 --> 0:08:32.160 use that metaphor because I've attended a number of conferences 0:08:32.160 --> 0:08:34.960 where you and I have both spoken, and that crew 0:08:35.160 --> 0:08:38.040 of E T F people all seem to have gone 0:08:38.040 --> 0:08:43.360 through the same baptism of fire. It's absolutely fair. Again, 0:08:43.360 --> 0:08:45.440 if you have anybody else in your show who's who 0:08:45.520 --> 0:08:47.280 was there for a period of time and left, we 0:08:47.440 --> 0:08:50.800 all say wonderfully positive things about the experience. And I 0:08:50.840 --> 0:08:54.760 mean that so genuinely, because every single day you are 0:08:54.840 --> 0:08:58.319 walking into battle, the bar is set so high for 0:08:58.400 --> 0:09:01.800 everything that you have to achieve, and Refin's expectations are real. 0:09:01.960 --> 0:09:06.560 They they they are quite lofty for everybody, and so 0:09:06.760 --> 0:09:10.240 you know, you really sharpen your skill set that when 0:09:10.240 --> 0:09:12.680 you get out. You get out like you are a 0:09:12.679 --> 0:09:14.880 Green Beret or a Navy seal or recall it what 0:09:14.920 --> 0:09:18.440 you will, right, So therefore you are very hirable. People 0:09:18.640 --> 0:09:22.520 love to take people from black Rock now difficult culture 0:09:22.679 --> 0:09:26.839 because of that. Um. But you know, I absolutely look 0:09:26.880 --> 0:09:30.520 back at that time in my life as a wonderful experience. 0:09:30.600 --> 0:09:32.600 That's shaped a lot of who I am today. And 0:09:32.679 --> 0:09:35.440 the proof is how successful they've become. Whatever they're doing, 0:09:35.559 --> 0:09:38.800 it seems to be working. Yeah, I'm very hults. You're 0:09:38.840 --> 0:09:42.080 listening to Master's in Business on Bloomberg Radio. My special 0:09:42.080 --> 0:09:45.000 guest today is Sharon French. She is the head of 0:09:45.080 --> 0:09:49.760 Beta Solutions at Oppenheimer Funds, where she oversees smart beta 0:09:49.840 --> 0:09:54.040 products as well as E s G efforts. Um, before 0:09:54.080 --> 0:09:56.800 we move on to what you're currently doing in Oppenheimer, 0:09:56.840 --> 0:10:01.200 I have one last black Rock quest Shin. So you 0:10:01.240 --> 0:10:04.720 were head of private Clients and Institutions at Black Rock. 0:10:05.480 --> 0:10:09.199 What did that work entail on a day to day basis? 0:10:09.240 --> 0:10:12.600 What were you basically in branding and marketing or were 0:10:12.640 --> 0:10:15.480 you front line dealing with c I O S and 0:10:15.559 --> 0:10:20.080 investment committee front line? Good question? Um? Uh yeah, so 0:10:20.200 --> 0:10:24.839 it so institutional, which was also a responsibility of mine 0:10:24.840 --> 0:10:28.760 out of lines Bernstein so institutional and private banks. So 0:10:28.920 --> 0:10:31.440 you know, we certainly dealt with JP Morgan private bank 0:10:31.520 --> 0:10:34.319 quite a bit, and a lot of the others Wills, Fargo, etcetera, 0:10:34.400 --> 0:10:37.480 you know them well, UM and so it was it 0:10:37.640 --> 0:10:43.240 was really a strong product development client fit role at 0:10:43.280 --> 0:10:46.600 that time that the the I shares you know, product 0:10:46.640 --> 0:10:49.080 lineup if you will, was growing pretty dramatically, but it 0:10:49.160 --> 0:10:53.400 was very closely connected and linked to certain channels. So 0:10:53.480 --> 0:10:57.720 the channel that I fail exactly now they're they're pure 0:10:57.760 --> 0:11:02.079 beta you know index stuff, you know, the um some 0:11:02.160 --> 0:11:05.400 institutional kinds for using as trading vehicles, but they certainly 0:11:05.440 --> 0:11:07.839 were looking to get away from that specifically within smart 0:11:07.840 --> 0:11:11.200 beta first trust was coming up very fast in the 0:11:11.360 --> 0:11:14.280 in the sort of rear view mirror at the time UM, 0:11:14.360 --> 0:11:18.480 so we had to sort of pivot and balance between 0:11:18.640 --> 0:11:22.280 our our pure beta market cap strategies, which is really 0:11:22.320 --> 0:11:25.720 where they started into how do we tilt a particular 0:11:25.720 --> 0:11:28.600 product more fundamentally, and a lot of the feedback that 0:11:28.640 --> 0:11:32.360 we were getting for that product development was driven exactly 0:11:32.480 --> 0:11:34.360 from some of the private banks that we worked with 0:11:34.360 --> 0:11:37.760 in some of the larger institutions quite interesting. So let's 0:11:37.800 --> 0:11:42.240 talk about beta solutions, which is kind of a mouthful 0:11:42.320 --> 0:11:45.280 to instead of just saying beta. So let me just 0:11:45.280 --> 0:11:48.040 start with the obvious question, what's the difference between Beta 0:11:48.120 --> 0:11:52.160 solutions and basic index? And yeah, well so, and there's 0:11:52.200 --> 0:11:55.960 a reason why it's called that. So, yeah, right when 0:11:56.000 --> 0:11:59.000 I was hired to Oppenheimer Funds, it was a very 0:11:59.040 --> 0:12:03.720 deliberate decision Artstime as the CEO, to really, you know, 0:12:03.840 --> 0:12:06.560 commit and go full force into the E T F 0:12:06.640 --> 0:12:10.560 business utilizing smart Beta, taking a pass on market cap 0:12:10.600 --> 0:12:13.559 because there's certainly big players who you know, corner that market. 0:12:13.800 --> 0:12:16.360 Hard hard to add value there if you're smaller or 0:12:16.400 --> 0:12:19.439 even a mid sized player, that right, That's right, And 0:12:19.520 --> 0:12:22.400 so he sort of wanted to call the unit. So 0:12:22.440 --> 0:12:27.080 it's a this is a sort of a a independently run, 0:12:27.120 --> 0:12:30.360 if you will, operating unit within Oppenheimer Funds, which gives 0:12:30.440 --> 0:12:33.320 us the space and the focus and the commitment to 0:12:33.400 --> 0:12:35.800 sort of build our business alongside of our active business. 0:12:36.280 --> 0:12:38.480 But he wanted to call it smart Beta, and I said, 0:12:38.679 --> 0:12:40.320 you know, is that really what we're trying to do, 0:12:40.400 --> 0:12:43.400 aren't we Aren't we trying to take a beta concept 0:12:44.000 --> 0:12:46.240 and wrap it in whatever it makes sense to wrap 0:12:46.240 --> 0:12:49.400 it in, whether it's an et F fund, a separate 0:12:49.440 --> 0:12:53.559 account and use it. So shouldn't this be called beta solutions? 0:12:53.600 --> 0:12:57.439 Because if we are pigeonholing ourselves just into smart beta. 0:12:57.600 --> 0:13:00.120 And you know, for the longest time people really know 0:13:00.160 --> 0:13:04.040 what smart data was. It had all kinds of names, strategic, beta, alternative, veta, 0:13:04.080 --> 0:13:07.920 de menal, indexing exactly, probably the most descriptive. Are you 0:13:07.960 --> 0:13:09.760 on the side of the fence that thinks the phrase 0:13:09.800 --> 0:13:12.160 smart data is a marketing term? I am on that 0:13:12.200 --> 0:13:13.960 side of the film. You're you're not a fan of that. 0:13:14.000 --> 0:13:16.079 I know a lot of people just cringe every time 0:13:16.360 --> 0:13:20.240 here because if you think about it, if beta is 0:13:20.280 --> 0:13:23.240 just what the market's giving you, what is how you 0:13:23.320 --> 0:13:27.040 modifying that with smart? I like alternatively weighted right, because 0:13:27.040 --> 0:13:29.600 I think of I think of buying the market right, 0:13:29.640 --> 0:13:33.840 which is market cap and certainly favors certain stocks or sectors, 0:13:33.880 --> 0:13:37.200 which you know, there's always been concentration risk in that approach. 0:13:37.280 --> 0:13:39.960 Some people still want it, which is fine, but there's 0:13:40.040 --> 0:13:43.360 better ways and different choices on how to drive that 0:13:43.440 --> 0:13:46.640 risk return profile through alternatively waiting the index. And I 0:13:46.679 --> 0:13:49.280 really do believe that I remember way back when. I 0:13:49.280 --> 0:13:51.640 think it was Guggenheim who had the equal weighted that's 0:13:52.880 --> 0:13:55.720 and that was suddenly like, wow, so you don't have 0:13:55.800 --> 0:13:58.880 the market cap weighted. It was never giants, although it 0:13:58.920 --> 0:14:02.040 certainly has grown, but it was always home. You mean, 0:14:02.080 --> 0:14:04.320 there's a different way to do this. It's kind of 0:14:04.360 --> 0:14:09.240 surprising that the smart beta move hadn't begun earlier because 0:14:09.240 --> 0:14:13.439 people were clearly thinking about ways to look at indexing 0:14:13.480 --> 0:14:16.040 that wasn't just cap weight That's right. And what I'm 0:14:16.080 --> 0:14:18.360 really encouraged by Barry is that if you look at 0:14:18.400 --> 0:14:23.800 flows in teen versus eighteen, smart beta, of the total 0:14:23.880 --> 0:14:29.080 pie of et F flows was about twelve pen it was. 0:14:30.800 --> 0:14:33.880 That's giant. It seems to have plateaus somewhat now, right 0:14:34.000 --> 0:14:36.600 or is it still growing? It's still growing. Yeah, it's 0:14:36.600 --> 0:14:40.000 still growing some of the well, you know, I mean 0:14:40.080 --> 0:14:44.440 this year, I mean, I haven't seen April numbers yet, 0:14:44.480 --> 0:14:47.000 but it's it's haund pretty healthy growth this year, you 0:14:47.040 --> 0:14:49.760 know that. And I know that it's over whether it 0:14:49.800 --> 0:14:53.800 will double. I mean, it's it doubled. From whether it 0:14:53.840 --> 0:14:55.600 will double, that's that's a bit of a stretch. But 0:14:55.640 --> 0:14:57.880 the point of the matter is we knew we would 0:14:57.880 --> 0:15:00.960 get smart beta market share from three places. The first 0:15:01.080 --> 0:15:04.720 is underperforming active and you know sort of morning star 0:15:04.840 --> 0:15:09.400 one and two star rated funds. We certainly saw it there. Um, 0:15:09.640 --> 0:15:11.840 the just the sheer growth of smart Beta trying to 0:15:11.880 --> 0:15:14.160 get our unfair share of that. And that's the growth 0:15:14.160 --> 0:15:18.400 I'm talking about from eighteen doubling and then passive. So 0:15:18.760 --> 0:15:22.760 as people got more educated about the merits of alternatively 0:15:22.800 --> 0:15:26.920 weighted some of the you know, uh, sort of traditional 0:15:27.040 --> 0:15:31.720 passive buyers started to move towards and understand what they 0:15:31.760 --> 0:15:34.400 were getting by paying in some cases twenty basis points 0:15:34.440 --> 0:15:36.640 more to get a smart beta product. They started to 0:15:36.680 --> 0:15:38.960 move parts of their portfolio to smart beta from having 0:15:39.000 --> 0:15:42.000 it be all passive. So there were three pillars by 0:15:42.000 --> 0:15:45.720 which we gathered market share, and we're about five billion 0:15:45.760 --> 0:15:49.960 today and from our our start with it's about so 0:15:50.000 --> 0:15:53.080 we're pretty happy with. So let's since you brought that up, 0:15:53.160 --> 0:15:58.120 let's talk about what Oppenheimer's portfolio options look like. So 0:15:58.720 --> 0:16:02.520 you have the alternative way thing you're saying billion, what 0:16:02.560 --> 0:16:06.400 are the other et F offerings they have in either 0:16:06.480 --> 0:16:11.960 the beta or the non beta opportunities? Sure? Sure, So 0:16:12.000 --> 0:16:15.760 we have twenty equity strategies. UM starting out with revenue 0:16:15.760 --> 0:16:20.160 weighted revenue weighted, so that's a traditional smart beta fundamental. 0:16:20.200 --> 0:16:24.040 It is absolutely yeah, and that is due to a 0:16:24.080 --> 0:16:27.280 small acquisition we made back at the end of of 0:16:27.400 --> 0:16:31.200 revenue shares. UM really kept five of those products and 0:16:31.200 --> 0:16:34.320 then built that suite out and then we started to 0:16:34.320 --> 0:16:37.400 move into factors and we've got a really nice partnership 0:16:37.440 --> 0:16:41.680 with Fitsie Russell. We introduced Dynamic multi factor, which we're 0:16:41.720 --> 0:16:43.760 super proud of. We were one of the first us 0:16:43.760 --> 0:16:47.120 in PIMCO. So this is an active no, it's it 0:16:47.240 --> 0:16:50.440 well interesting we have it's sort of an active overlay. 0:16:50.920 --> 0:16:53.840 So it's a macro signal coming from our global multi 0:16:53.960 --> 0:16:58.840 Asset group which takes UM sort of leading economic indicators 0:16:59.320 --> 0:17:03.560 as well as the sort of the momentum signals from 0:17:03.560 --> 0:17:07.080 the market and tells us monthly whether we're either in 0:17:07.080 --> 0:17:11.439 a recovery, an expansion, a contraction or a slowdown. And 0:17:11.480 --> 0:17:15.200 then we take the five factors and we wait them 0:17:15.240 --> 0:17:18.440 depending upon which market regime we're in, and so based 0:17:18.480 --> 0:17:20.879 on that you will alter within the e t F 0:17:21.160 --> 0:17:24.760 the waiting of the So it is rules based, but 0:17:24.920 --> 0:17:27.800 it is informed by this active signal and it has 0:17:27.840 --> 0:17:31.199 done phenomenal. We launched it in November. It's at the 0:17:31.240 --> 0:17:33.600 top of the category. So this is kind of an 0:17:33.680 --> 0:17:38.640 interesting space because people have been talking about making its 0:17:38.680 --> 0:17:41.119 ironic how beta has driven so much of e t 0:17:41.359 --> 0:17:45.040 f s, but we're talking about making e t fs 0:17:45.440 --> 0:17:48.280 more dynamic and more active based on a variety of 0:17:48.320 --> 0:17:51.199 other inputs. So this one is rules based, driven by 0:17:51.240 --> 0:17:54.919 a series of economic inputs. Any other dynamic or active 0:17:54.960 --> 0:17:58.000 ETFs current or on the rise well, interestingly, so we 0:17:58.080 --> 0:18:01.840 did file with the SEC for a senior loan product. 0:18:01.880 --> 0:18:05.520 We've got a very very well recognized and successful senior 0:18:05.560 --> 0:18:09.160 loan FRANX fixed income right, so so we were making 0:18:09.160 --> 0:18:12.560 our foray into the fixed income marketplace. We also filed 0:18:12.560 --> 0:18:16.280 for short duration uh e t F some liquidity enhanced 0:18:16.280 --> 0:18:19.679 ETFs and all these are not to a specific index. 0:18:19.680 --> 0:18:22.680 The role dynamic and can change. Well, these are actually active. 0:18:22.760 --> 0:18:26.040 So what we're doing is filing active fixed income ETFs 0:18:26.119 --> 0:18:29.040 with some of our key teams and Oppenhammer funds. And 0:18:29.240 --> 0:18:33.639 had we not been bought by Investco, because those products 0:18:33.640 --> 0:18:35.600 are just sitting on the shelf, those approvals by the 0:18:35.680 --> 0:18:38.800 SECO sitting on the shelf, we would have launched fixed 0:18:38.800 --> 0:18:41.679 income active UM just sort of you know, build out 0:18:41.680 --> 0:18:45.600 the asset allocation sure and all the academic research says 0:18:45.640 --> 0:18:48.560 that while active may not necessarily create a lot of 0:18:48.640 --> 0:18:51.960 value in the equity side, it really can create value 0:18:52.000 --> 0:18:54.679 unfixed income. It does absolutely, and I think you know, 0:18:54.760 --> 0:18:57.040 firms who are thinking about that should really look at 0:18:57.160 --> 0:18:59.119 sort of what are some of their core competencies on 0:18:59.160 --> 0:19:02.120 the fixed income side. Certainly we've seen you know, Gunlock 0:19:02.200 --> 0:19:04.359 and Gross do well with the products when they came out, 0:19:04.400 --> 0:19:06.680 and they're sort of leading the fixed don't come active 0:19:06.720 --> 0:19:10.679 ETF space, But we really believe that that there's something 0:19:10.720 --> 0:19:12.920 in that for investors. I think the jury is still 0:19:12.920 --> 0:19:15.399 out on the equity side. I mean we saw the 0:19:15.440 --> 0:19:18.600 big you know, Presidian approval that was a big development 0:19:18.600 --> 0:19:21.040 a couple of weeks ago. I'm not familiar with that ETF. 0:19:21.080 --> 0:19:24.000 What was the um. The company is Prosidian, and they 0:19:24.040 --> 0:19:26.000 have been working with the SEC to try to get 0:19:26.040 --> 0:19:32.760 an approval for a non transparent solution. Quite quite interesting. 0:19:33.160 --> 0:19:36.080 I'm very ritults. You're listening to Masters in Business on 0:19:36.119 --> 0:19:40.320 Bloomberg Radio. My special guest today is Sharon French. She 0:19:40.640 --> 0:19:44.760 is the head of Beta Solutions, for Oppenheimer Funds. She 0:19:44.880 --> 0:19:49.520 also covers environmental, social and governance efforts at the firm. 0:19:49.680 --> 0:19:52.040 She is a graduate of the Wharton School of Business 0:19:52.400 --> 0:19:56.359 and sits on the board of Women in ETFs. So, 0:19:56.359 --> 0:20:00.879 so let's talk about what's going on, um with women 0:20:01.400 --> 0:20:04.040 in the E t F space. Tell us a little 0:20:04.040 --> 0:20:06.600 bit about Women in E t F the board that 0:20:06.680 --> 0:20:10.199 you're on, uh, and what is that group about and 0:20:10.240 --> 0:20:12.960 what are they looking to accomplish. Yeah, I would love 0:20:13.000 --> 0:20:14.800 to talk about that. Thank you for the question. So 0:20:14.800 --> 0:20:18.840 I'm co president with Jillian del Signore JP Morgan of 0:20:18.880 --> 0:20:20.720 Women in E t F. So I have been a 0:20:22.160 --> 0:20:25.840 global governance committee and board members since the beginning. Um, 0:20:25.920 --> 0:20:28.600 how long has this been around? For just over five years? 0:20:28.600 --> 0:20:31.600 We just hit our five year anniversary in January. That's decent, 0:20:31.680 --> 0:20:34.440 you know these days, five years just for something to 0:20:34.480 --> 0:20:36.639 survive and grow is not a bit. And I have 0:20:36.720 --> 0:20:39.880 to tell you we are growing so fast. We're global. Um. 0:20:39.960 --> 0:20:41.920 So we're in a May as well as Asia, pack 0:20:42.440 --> 0:20:46.520 and Canada. Um, We've got ten chapters, were just about 0:20:46.560 --> 0:20:51.360 to hit five thousand members globally. That's fantastic. And this Verry, 0:20:51.400 --> 0:20:53.480 this hit at the heart of what I really think 0:20:53.600 --> 0:20:56.480 is needed within the e t F industry. There are 0:20:56.520 --> 0:21:00.440 women of Wall Street, there are women in hedge funds. UM. 0:21:00.440 --> 0:21:02.960 But this was really something that we heard a lot, 0:21:03.960 --> 0:21:07.639 as we believe, but within financial services there are a 0:21:07.680 --> 0:21:10.800 lot of women gravitate to the e t F ecosystem, 0:21:10.800 --> 0:21:15.720 whether you're an AUTHORIIC participant. We have really drilled down 0:21:16.200 --> 0:21:18.159 with some theories on this, but we would love to 0:21:18.160 --> 0:21:20.399 get a research partner to prove it. Well, let me 0:21:20.400 --> 0:21:25.760 man explain this to you, okay please, But UM, we 0:21:25.880 --> 0:21:28.879 think it's innovation. We think women are very drawn to 0:21:28.920 --> 0:21:35.040 innovation and UM evolution. Um, there's a lot of women 0:21:35.240 --> 0:21:37.960 in supporting the e t F industry on the legal side. 0:21:38.000 --> 0:21:41.720 There's a lot on the trading side, especially authorized participants 0:21:41.720 --> 0:21:45.000 and market makers. You and I know many of them. Um. 0:21:45.040 --> 0:21:48.400 There are a lot of women leading e t F businesses. Uh. 0:21:48.440 --> 0:21:51.000 There are a lot of women in e t F distribution. 0:21:51.160 --> 0:21:53.560 Again like my co president Jillian del Signore over at 0:21:53.600 --> 0:21:57.600 JP Morgan. UM, there are also you know heads of products. 0:21:57.600 --> 0:22:00.560 I mean, uh, they're the head of uh the e 0:22:00.640 --> 0:22:02.760 t F business at JP Morgan. Also used to be 0:22:02.760 --> 0:22:04.560 the head of product both at I Shares and and 0:22:04.680 --> 0:22:09.439 JP Morgan. So so there is just a huge concentration 0:22:09.480 --> 0:22:11.439 of women within the E T F industry that we 0:22:11.600 --> 0:22:14.399 felt a need to get connected. So our mission is 0:22:14.440 --> 0:22:19.000 to connect, support and inspire UM. So it's really having 0:22:19.119 --> 0:22:23.040 some of the more senior executives within ETFs mentor and 0:22:23.200 --> 0:22:26.719 sponsor and connect the women who are joining us who 0:22:26.760 --> 0:22:29.480 are just starting out in the industry UM. And we 0:22:29.600 --> 0:22:31.640 have events all over the world and by the way, 0:22:31.680 --> 0:22:35.000 we do encourage men. Uh they're a well over ten 0:22:35.080 --> 0:22:37.360 percent of our membership as men. We're hoping to get 0:22:37.400 --> 0:22:41.200 it up to because we are trying to continue to 0:22:41.240 --> 0:22:44.240 push forward the agenda of gender equality and the diversity 0:22:44.280 --> 0:22:46.560