Speaker 1: Welcome a trilliance. I'm Joel Webber and Eric. Every January,
Speaker 1: I stay here in New York words really cold, and
Speaker 1: you get to go to a warm, sunny place called Yeah.
Speaker 1: I mean, I bear. I never see the sun. I'm
Speaker 1: always inside, nerding out. It's a whirlwind of an event.
Speaker 1: So hence my voice. I feel fine, but my voice
Speaker 1: is going because I was just talking so much, and
Speaker 1: I'm a little worn out and spent between the panels
Speaker 1: and the networking and the parties and but yeah, it
Speaker 1: was great. Um, but there's no sun to be had,
Speaker 1: at least for from my experience. I don't feel sorry
Speaker 1: for you, and but I do feel stright for myself
Speaker 1: because I've had to hear you talk about this so
Speaker 1: many times. Listen, next year we should go and set
Speaker 1: up a booth and just do the show. Why did
Speaker 1: we do that this year? Yeah, we got a plan ahead.
Speaker 1: We well do. I think we brought up in like
Speaker 1: Descenter was just too late. I'm gonna do it. Got
Speaker 1: a lot of good feedback. A lot of people up
Speaker 1: and say, oh man, I love the podcast, said you
Speaker 1: know it's um, it's come up. I don't know, maybe
Speaker 1: half a dozen people come up and said that. So
Speaker 1: that's good. But in addition to not wanting to hear
Speaker 1: from you, we actually have new people who went to
Speaker 1: the conference this year and they're going to come on
Speaker 1: the show and talk to us about what it was
Speaker 1: like to be a freshman there. Yeah, this might be
Speaker 1: my tenth year, so I'm probably a little jaded. Well,
Speaker 1: I mean, the first year I went, I think it
Speaker 1: was just me and Chris Condon. Then I went a
Speaker 1: couple of years, I was the only person there from Bloomberg,
Speaker 1: and then data started joining the news and this year
Speaker 1: our index team was there with like maybe ten people,
Speaker 1: so there was probably twenty Bloomberg people at the event
Speaker 1: all told. So it's definitely become like Fort Lauderdale Bureau. Yeah,
Speaker 1: it's actually technically in Hollywood, and as you drive up,
Speaker 1: there's a Hollywood Boulevard and I'm just like, it's just
Speaker 1: not different, totally different. So joining us today on Trillions
Speaker 1: first time for both Katie Greifeld, who's a reporter with
Speaker 1: Bloomberg News, as well as Claire Valentine, this time on
Speaker 1: Trillian Inside Inside et f S Part three. Katie, Claire,
Speaker 1: Welcome to Trillions. What's your assessment should I actually go
Speaker 1: there next year? Oh yeah. Even if you don't have
Speaker 1: time to go to the beach, you can at least
Speaker 1: look out on the water, so which is sort of
Speaker 1: depressing through glass windows. Yeah, yeah, I agree. It's a
Speaker 1: nice view, but there's a depressing element to it. You guys,
Speaker 1: get out of outside at all or not much. I
Speaker 1: did a little bit. I sat on the beach in
Speaker 1: a lunch. Katie went for a run. I did go
Speaker 1: for a run. It was at six thirty in the
Speaker 1: morning though, that's when the five K fund run was held,
Speaker 1: and uh, you could see the beach. It was just
Speaker 1: dark and there's celebrity sort of. There was a celebrity,
Speaker 1: Ryan Hall. Uh. If you don't know, he's big in
Speaker 1: my world because I'm a runner. But he he was
Speaker 1: a former big time runner marathon former big time runner
Speaker 1: retired now, but you might know him because he ran
Speaker 1: a sub two oh five marathon, which is which is
Speaker 1: very fast at the ball some marathon, so that was
Speaker 1: a big deal. There's some hills there and I think
Speaker 1: he still holds the half marathon record for the US,
Speaker 1: so he's a big deal. I didn't know he was
Speaker 1: going to be there, so that woke me up and
Speaker 1: James and my team was Jazz. He got a picture
Speaker 1: with him. It was like he met Bob Dylan or something.
Speaker 1: I mean, it was like a major deal for him.
Speaker 1: I never heard of the guy I run, but I'm not.
Speaker 1: I'm not in the marathon circuit. But um that's also running.
Speaker 1: I want to I want to video of that. I
Speaker 1: think it'll be pretty boring for you, but I'll send
Speaker 1: you one. Okay, alright, I'll do that for you. Okay.
Speaker 1: So our stick with Inside ETF is that we give
Speaker 1: you a recorder and you go talk to people. Yeah,
Speaker 1: if I'm talking to somebody and I feel like they
Speaker 1: say something that's you know, kind of cool, representative of
Speaker 1: a bigger theme, I'll just get forty seconds from them,
Speaker 1: and when we can run through the clips, who's first,
Speaker 1: first up? And I'm guessing you guys will agree with
Speaker 1: me that active, non transparent or aunts was probably the
Speaker 1: biggest topic. If there was a theme that was threaded
Speaker 1: through a lot of this, which we've talked about a
Speaker 1: few times on Trillions we have. We did a whole
Speaker 1: show with Dan McCabe, who's the Presidian uh CEO, which
Speaker 1: you should go back and listen if you want a
Speaker 1: primer on what this is, because we think this is
Speaker 1: a theme for the year, like this is gonna be
Speaker 1: a huge one. Yeah, all these like fifteen trillion dollars
Speaker 1: worth of active mutual funds are trying to figure out
Speaker 1: a way to do the e t F and this
Speaker 1: is a way to do it without showing their holdings
Speaker 1: every day. So it's kind of like having their cake
Speaker 1: and needed to the question is is their demand. So
Speaker 1: the first guy we interviewed was Daniel Shapiro from Serule.
Speaker 1: Now Cerule has done a study that basically found that
Speaker 1: et F fishers like these things are gonna bomb, which
Speaker 1: is I'm in that camp pretty much. Some other people
Speaker 1: think they're going to be successful. But Daniel said he
Speaker 1: saw some things that make him more optimistic, and so
Speaker 1: I asked him about that. We gave them until so
Speaker 1: more than five years out, five years, less than ten billion.
Speaker 1: Half of their respondents in pessimistic. Why I think we
Speaker 1: we ourselves highlighted a number of challenges in the products
Speaker 1: would face. We thought that the as managers the conflicted
Speaker 1: and offering their best products into this particular rapper, we
Speaker 1: thought that they wouldn't want to launch the right products
Speaker 1: right away. They might start with something smaller, and as
Speaker 1: we've seen the new filings from Fidelity, from tyrold Price,
Speaker 1: it seems that there's a lot of promise. They're willing
Speaker 1: to let some of their best, some of their largest
Speaker 1: offerings into the E t F rapper, which makes us
Speaker 1: more optimistic. What he's basically saying is that we now
Speaker 1: see the filings coming in for what of these mutual
Speaker 1: funds funds they're going to actually try to convert into
Speaker 1: this new structure. And he was saying that, like he thought,
Speaker 1: maybe they'd take their mediocre or crappy funds and just
Speaker 1: try to get something going with them on this, but
Speaker 1: he found that some of the funds they're going to
Speaker 1: launch were some of their better funds, not all of them,
Speaker 1: and that gave him some hope. They're not only are
Speaker 1: you new to inside E t F, you're new to
Speaker 1: E t F S cross Asset reporter. Now what do
Speaker 1: you what do you make of this a moment? Well, definitely,
Speaker 1: everyone that I talked to agreed this was the theme
Speaker 1: of the conference is what everyone's talking about. But I
Speaker 1: get to talk to anyone but sides people trying to
Speaker 1: issue these that really agreed they're going to take off.
Speaker 1: I think there's a lot of skepticism about are these
Speaker 1: going to gather assets? And talking with Ryan Sullivan from
Speaker 1: Brown Brother's Hairman, we both agreed people are just kind
Speaker 1: of talking in circles at this point. We have to
Speaker 1: wait until these launch and sort of see what happens. Katie,
Speaker 1: what do you think, Well, it's interesting to that point
Speaker 1: that perhaps people won't want to offer their best strategies
Speaker 1: and an et f rapper. We were talking to UM
Speaker 1: Greg Friedman at Fidelity and he said that the investors
Speaker 1: are really rapper agnostic, you know it just they want
Speaker 1: the best strategy, They want the best return that they
Speaker 1: can get, you know, the best price. So that was
Speaker 1: kind of interesting and to this broader debate. It was interesting.
Speaker 1: On Greg Friedman's panel UM on Active Non Transparens on Tuesday,
Speaker 1: there was this sort of spar that broke out between
Speaker 1: Fidelity and then Doug Jones from the New York Stock
Speaker 1: Exchange over whether this would herald the death of a
Speaker 1: mutual fund. But declares point, you know, we've heard from
Speaker 1: a lot of optimistic issuers, but people are really looking
Speaker 1: to see whether they hold water. Did the fight have
Speaker 1: to get broken up? This is two people in suits
Speaker 1: like talking, even a little spark. I mean, some of
Speaker 1: these panels can be very boring people, but this is
Speaker 1: actually I thought that was one of the better ones,
Speaker 1: absolutely because they were taking subtle shots at each other.
Speaker 1: Because they're all offering different rappers and trying to appeal.
Speaker 1: They were all competitors, and we kept coming back to it.
Speaker 1: The moderator did step in, but there was a point
Speaker 1: there where it was just the two of them talking.
Speaker 1: The bigger problem is even if you launch your best
Speaker 1: fund like the Tiro blue Chip, so far it looks
Speaker 1: like the price is gonna be fifty to sixty basis
Speaker 1: points um. So that's I guess, a decent deal if
Speaker 1: you're a mutual fund investor. But for eat F people,
Speaker 1: I mean they want everything below twenty bits. To me,
Speaker 1: that's the single biggest issue. And I guess we'll see
Speaker 1: in large cape equity is where they're going to launch
Speaker 1: the first ones, and that seems to be the area
Speaker 1: that people want active The least active flows tend to
Speaker 1: be a little stronger and fixed income and an international
Speaker 1: and emerging markets where there's more opportunity small caps. So
Speaker 1: um yeah, I know I'm interested, um, just like everybody else.
Speaker 1: And um, as you know, Todd at Rosen Bluth and
Speaker 1: I have another big bet, which is how much will
Speaker 1: they have at the end of the year. Ten billion
Speaker 1: is the over under. I have the under, and if
Speaker 1: I win this time, I'm ordering Saki next. Next up,
Speaker 1: we have former Congress and Barney Frank. So you do
Speaker 1: sometimes get some celebrities here, hence Ryan Hall. But Barney
Speaker 1: Frank wasn't there just to talk like hype people up
Speaker 1: or just be a celebrity. He's there to Actually he's
Speaker 1: on the board of a new l g B t
Speaker 1: q UM index that will be an et F very soon.
Speaker 1: So we asked him what he was being in. You
Speaker 1: know why he was involved with us for many is
Speaker 1: when I first kind of involved with gay lights in
Speaker 1: nineteen seventy two, we won the defension. We were fighting
Speaker 1: against bad things. We've reached a point now where for
Speaker 1: millions of us to we have in much of the country,
Speaker 1: we can start going after good things based on a sexuality.
Speaker 1: That is, we're no longer trying to defend ourselves against bigotry.
Speaker 1: In most cases, we want now to go forward in
Speaker 1: Vanshall legitimate interest in a way that's constructive. And that's
Speaker 1: and he can't now Before we dig into that, I
Speaker 1: got a part two to this, which is Billy Bean,
Speaker 1: who is a former professional baseball player who came out.
Speaker 1: Billy Bean, No, it's actually saying I asked him. He's like,
Speaker 1: it's very confusing. I know different. Billy Bean a player
Speaker 1: he played on the Detroit Tigers, I believe, with Alan
Speaker 1: trammell Um, and he was he actually had some cool
Speaker 1: stories about playing with Tony Gwynn and least players I
Speaker 1: used to baseball cars of anyway, different topic. He was
Speaker 1: talking about being a major league baseball player and being
Speaker 1: in the closet and then coming out and that's part
Speaker 1: of what got him involved with this as well. And
Speaker 1: it's a really heartfelt story. Here we go. And I
Speaker 1: made the big leagues when I was twenty one, and
Speaker 1: so you don't make the big leagues unless yere a
Speaker 1: baseball player. And you know, there was no Internet, and
Speaker 1: and uh, you know, I didn't quite understand my sexual orientation.
Speaker 1: And I got married very young and and tried to
Speaker 1: be everything to everyone. And as I got a little older,
Speaker 1: and was into big leagues for a little bit. Um,
Speaker 1: I started to become more self aware and and I
Speaker 1: met somebody and I left my marriage and and that
Speaker 1: person died, uh tragically, very young. Um, the night before
Speaker 1: what was my last season in the big leagues. And
Speaker 1: instead of talking to my family or my roommate was
Speaker 1: Brad Osma's who's been a big league manager, played eighteen
Speaker 1: years in big leagues. Um, it just seemed like from
Speaker 1: the information that I had in my life that someone
Speaker 1: like me didn't belong in baseball. And and I just
Speaker 1: I just stopped playing and with no explanation for anybody,
Speaker 1: didn't show up for spring training the next year, heavy right,
Speaker 1: And so I was not expecting that. Yeah, no, look,
Speaker 1: this is why I played both of those because there's this,
Speaker 1: there's the Barney Frank who else has a real story
Speaker 1: in this? But when you dig into these small e
Speaker 1: t F s, there are some real interesting stories and
Speaker 1: people who really care. So sometimes these small ets get
Speaker 1: blown off. But even the Whiskey ETF had an interesting
Speaker 1: story about this guy in Lexington, Kentucky. Um, and I
Speaker 1: find that's where the passion is. What was Billy's et
Speaker 1: F connection. So Barney's on that board, so is he,
Speaker 1: and so is Martina and Evratalova. So this is an
Speaker 1: index now, but it should be an ETF soon. It'll
Speaker 1: be interesting if against traction, because there was one called
Speaker 1: Pride pr I D but it didn't really take off,
Speaker 1: although someone pushed back and said, you know, this was
Speaker 1: UBS trying to sort of like co op this movement.
Speaker 1: This is from the movement. One thing that I find
Speaker 1: interesting about that is like probably two people who had
Speaker 1: no idea about E T F and then all of
Speaker 1: a sudden they end up in inside et F in Florida,
Speaker 1: kind of like our guests. Uh, did you guys meet
Speaker 1: anybody else like this? I did not, but I think
Speaker 1: it really speaks to the idea of this field is
Speaker 1: so crowded with E TF and how are you going
Speaker 1: to stand out? And I wrote an article about this
Speaker 1: in some of the ways that people are trying to
Speaker 1: differentiate themselves, and I think it sort of combines both
Speaker 1: like E. S G and kind of wanting to do
Speaker 1: good but also wanted to compete with the big players,
Speaker 1: and how do you do that you make yourself unique? Katie,
Speaker 1: how much s G talk was there? There was so
Speaker 1: much E s G talk. We've heard so much about
Speaker 1: this in the past three weeks, and it was it
Speaker 1: was interesting. You know, everyone says it's here to say,
Speaker 1: everyone's excited about it, wants to get on board. Well
Speaker 1: I was gonna say, no, one knows how to define it.
Speaker 1: And it almost feels like, you know, past the potato
Speaker 1: because we've asked several people, several issuers, how are you
Speaker 1: defining this? And they are really relying on third parties
Speaker 1: at this point. So I'm not I just worried about
Speaker 1: the investor. I worry this is like active mutual funds
Speaker 1: Part two because, like Matt Hogan and the best new
Speaker 1: ETF pundit SmackDown argued for s USL, which is the
Speaker 1: I shares E s G, it's I think it might
Speaker 1: be the largest E s G fund bar none. Guess
Speaker 1: what's not not in it? Apple, Facebook, Netflix, Amazon, Berkshire,
Speaker 1: JP Morgan. I mean, these are the leaders of their industries.
Speaker 1: It's like a car without an engine, and maybe those
Speaker 1: stocks will actually fall because of their E s G
Speaker 1: in the future and this this thing outperforms, But I
Speaker 1: don't know. Those are some heavy duty companies, You're not
Speaker 1: there aren't in there and people are buying this and
Speaker 1: not knowing that. I think they're going to be surprised
Speaker 1: if they buy it. Know it fine, but I just
Speaker 1: worry that they're going to be disappointed if it underperforms.
Speaker 1: Electric cars don't have engines. That's true, there is a
Speaker 1: metaphor there. Yeah, maybe that that's a good way to
Speaker 1: sell it, but I wouldn't buy it. By the way,
Speaker 1: when I write about this, I get them publicly people
Speaker 1: that yeah, you're you know what about this and this,
Speaker 1: But I'll get a lot of messages offline, like and
Speaker 1: at the conference, I wrote this article about this, and
Speaker 1: people were like, you're spot on. I can't say anything
Speaker 1: to agree with you publicly, but I agree. I think
Speaker 1: people um are sort of leaning towards this idea of
Speaker 1: an E S G tilt instead of just a flat
Speaker 1: out E s G. And people that I talked with
Speaker 1: said that, you know, because there's a question of how
Speaker 1: do you define it, you can sort of define it
Speaker 1: in a way that's like E S G light almost,
Speaker 1: and that might have more success that if If people
Speaker 1: are going to use it as a like a five
Speaker 1: percent allocation on top of their equities, that's fine. That
Speaker 1: then it becomes some like a theme. But then are
Speaker 1: you really cleaning up your portfolio because the rest of
Speaker 1: your portfolio still owns those companies like ex On and whatnot.
Speaker 1: So that to me, a lot of the says, I
Speaker 1: just worry it's being sold, like the five dollar organic avocado.
Speaker 1: It's being sold, so you feel like you're doing something,
Speaker 1: but it's really you're kind of getting hosed a little. Well,
Speaker 1: the question I asked a bunch of people at this
Speaker 1: conference was whether this E S G enthusiasm is really
Speaker 1: a bowl market phenomenon. You know, when everything is rallying,
Speaker 1: you kind of have the luxury of being able to
Speaker 1: invest along your values. But when we actually do hit
Speaker 1: a downturn, if and when you know, are people going
Speaker 1: to have that luxury of choice? And so far, you know,
Speaker 1: no one wanted to disagree with the buzzword of the week,
Speaker 1: but um, the point that Phil McIntosh at NASTACK said
Speaker 1: was it's going to depend on whether the returns are
Speaker 1: actually better in E S G. And there's been a
Speaker 1: lot of conflicting research on that. So it might rest
Speaker 1: on that if you believe E s G is a
Speaker 1: factor that we'll have to find alpha um. By all
Speaker 1: means you can just drop a little on your portfolio.
Speaker 1: But if you are looking to clean up your portfolio,
Speaker 1: those are the people I worry about. Because you're gonna
Speaker 1: sell your Vanguard five hundred for this, just be careful,
Speaker 1: know what you're owning. UM. And I think that's a
Speaker 1: big issue. And ms c I, the head of mbsc I,
Speaker 1: came out recently and said if you don't something like,
Speaker 1: if you don't do this, your you will dramatically underperform.
Speaker 1: I find that to be very dangerous talk. I just
Speaker 1: think that's irresponsible to be honest. UM. I think it's
Speaker 1: just better to sort of like offer caveats here and
Speaker 1: be honest about the proposition, because you don't want someone
Speaker 1: to wake up and trail the market by and be like,
Speaker 1: you know, why did I do this and get angry
Speaker 1: about it? Who'd you talk to you next? So, while
Speaker 1: I'm a skeptic, there's someone I think a little further
Speaker 1: to the right of me, which is the MAGA guy.
Speaker 1: There's an et F with the tigger Maga Hal Lambert.
Speaker 1: It leans towards companies with that donate or have GOP
Speaker 1: values or donate to GOP. I believe did a great
Speaker 1: Brillions episode with him before. Yeah, we did a whole
Speaker 1: episode with him and he's a really nice guy. He
Speaker 1: was talking about Larry Fink's Climate letter and uh, he
Speaker 1: offered some sort of like pushback on that, and here
Speaker 1: he is like, my biggest problem with the s G
Speaker 1: is that it's it's all just soft issues, so it's
Speaker 1: very relative. There's no real hard evidence on anything, so
Speaker 1: it's opinionated, and it's being driven by the U N
Speaker 1: out of out of Europe, and now they're forcing US
Speaker 1: companies to adopt policies and it's basically policies that they
Speaker 1: can't get past legislatively by the left, and so they're
Speaker 1: trying to basically front end that and go to the
Speaker 1: corporations and force this on them. So if you look
Speaker 1: at what like Bratt black Rock is doing, Larry Fink,
Speaker 1: you know they have now come out and said everything
Speaker 1: is gonna be sustainable in what they're doing. Well, you
Speaker 1: know what, what does that due to clients that don't
Speaker 1: have that same view. And by the way, if you
Speaker 1: look at black Rock and you look at you know,
Speaker 1: what they're doing with their own company. You know, black
Speaker 1: Rock has jets, they have their own private jets and
Speaker 1: and uh whatever, I'm fine with jets. The other thing
Speaker 1: they're doing, though, is they're leasing those jets out when
Speaker 1: they're not using them. So when you talk about global
Speaker 1: warming and climate change and you're worried about all that,
Speaker 1: and you're gonna least jets out to make a few
Speaker 1: extra thousand dollars to put carbon in the atmosphere, is
Speaker 1: that really s G friendly or they really SG focused,
Speaker 1: or they STUF doing it for marketing. Hey, no one
Speaker 1: wants to say what he said, but there's some truth
Speaker 1: to that, and there is a lot of hypocrisy and
Speaker 1: it needs to be said. And I think you can
Speaker 1: identify hypocrisy and still be for the movement to fight
Speaker 1: climate change. Emitting carbon is emitting carbon. I think everybody
Speaker 1: has to contribute. That's not unfair, is it. No? I
Speaker 1: mean my take is that even if it is PR,
Speaker 1: that's sort of better than nothing. It's a movement forward,
Speaker 1: it's a step forward. And I agree I'm talking talking
Speaker 1: about I just think the some of the pressure should
Speaker 1: be punched up right now. I feel like it's all
Speaker 1: about how are the people gonna like change? But what
Speaker 1: about the elite who who just seemed to be the
Speaker 1: biggest carbon emitter is out there. There's just not that
Speaker 1: much pressure on them. It's weird. I didn't see one
Speaker 1: Davos article that really focused on that. How is MAGAT
Speaker 1: performed MAGAT and not having a good run. It's a
Speaker 1: fifteen point one percent since launching and smps like thirty three,
Speaker 1: so it's basically half now MAGGO I think leans towards
Speaker 1: energy and industrial stock. Yeah, it's a sector tilt away
Speaker 1: from a look. Mega to me is is the anti
Speaker 1: E s G sector wise. You get more energy and
Speaker 1: industrials and almost no tech. So if tech falls out
Speaker 1: of BED, I a would say, if you think if
Speaker 1: you're anti high beta and growth and tech and you
Speaker 1: think those you know, the fang type names are going
Speaker 1: to fall out of BED, mag is not a bad play,
Speaker 1: even if you disagree. It's sort of like an anti tech,
Speaker 1: energy industrial heavy kind of ETF. We asked Black Rock
Speaker 1: about halse comments and it responded that it offsets travel
Speaker 1: related emissions by retiring carbon credits and also reduced air
Speaker 1: travel per employee. As of you're in okay, we have
Speaker 1: some more names on your list. Who's next next is
Speaker 1: Dan Draper from Investco. And I think another issue was,
Speaker 1: you know, costed following everybody wants free trading. Fility just
Speaker 1: announced fractional shares after announcing free trading. He was talking
Speaker 1: a little bit about thinking about how asset managers are
Speaker 1: going to evolve and change as headline expense ratio is
Speaker 1: faull to almost nothing. Once we have a large platform,
Speaker 1: can e T s be a source to bring clients
Speaker 1: new clients onto a platform, and once they're there, can
Speaker 1: we effectively follow them through their data, you know, and
Speaker 1: being able to find other revenue sources throughout the platform.
Speaker 1: So I think it's interesting concept of potentially moving from
Speaker 1: assets under management to data under management. So, you know,
Speaker 1: that's a that's a great line, by the way, and
Speaker 1: I think what we're going to see is five or
Speaker 1: six companies. A lot of the assets just flow to
Speaker 1: these big sort of consolidated giant companies that are everything
Speaker 1: to everybody, and what they do besides make a little
Speaker 1: money on the expense ratio is going to be other revenances.
Speaker 1: How can you creatively earn some money on all that
Speaker 1: assets and all the people that are part of the assets.
Speaker 1: And that's sort of what he's talking about. Yeah. Well,
Speaker 1: first off, his idea of data under management instead of
Speaker 1: assets under management. I'm dying to call this draper's dumb idea?
Speaker 1: Do you am? So I want to get that on
Speaker 1: the record first, But I think it's really interesting idea
Speaker 1: and I think it has a lot of merit to it. Um.
Speaker 1: I My pushback is what does data mean? That's just
Speaker 1: such a buzz word. Um. But I do think you know,
Speaker 1: these companies are going to need to make money somehow,
Speaker 1: and that could be a pathway forward. I think it's
Speaker 1: a question of can you use the data, can you
Speaker 1: gather it, can you clean it? And can you implement it? Yeah.
Speaker 1: I want to see what the pop up on the experiences, like, hey,
Speaker 1: we've been scraping your data and we noticed X and
Speaker 1: it's like, oh, you've been doing what? Yeah? But the
Speaker 1: low fee, the zero fee in a lot of cases
Speaker 1: uh e t F four that we've seen. That was
Speaker 1: another big topic and we spoke to Rory Tobin at
Speaker 1: Spider about that and um he said that what they've
Speaker 1: been doing is cutting costs elsewhere, you know, trying to
Speaker 1: bring more digital capabilities to portfolio management, and it was
Speaker 1: it was interesting. He likened it to Ryanair, the European
Speaker 1: low cost airline, how they may not have seatback pockets,
Speaker 1: you may not get to your destination on time, but
Speaker 1: you know, it works. They're Europe's largest low budget airlines.
Speaker 1: So he's trying to tap into that wisdom. And for
Speaker 1: a while they weren't going to have seats, They're going
Speaker 1: to be standing position. Yeah, I mean, I get his
Speaker 1: point there, but I also think it's a terrible metaphor
Speaker 1: because people hate airlines that do that. They hate it,
Speaker 1: but it's working for Ryan Air. They're profitable. Eric, who
Speaker 1: who's next next is? You know, we talked about Dan
Speaker 1: Draper runs a huge company and their struggles. But then
Speaker 1: I moderated moderated a panel called the Rebels, which is
Speaker 1: about the small issuers and India issuers and how they
Speaker 1: can survive in a era of giants. So here's Andrew
Speaker 1: Chainin of um Ufo the space ETF. He also was
Speaker 1: formerly of Hack. He came up with this et F
Speaker 1: Hack and he got into a lawsuit with his own
Speaker 1: white label issuer. And I thought Hack was one of
Speaker 1: the greatest theme launches ever, in fact that I think
Speaker 1: it inspired a generation of of theme launch. It wasn't bad. Yeah,
Speaker 1: So after Hack kind of became a controversy, he launched
Speaker 1: a new fund called UFO. Long story short, he's going
Speaker 1: to comment on the Hack controversy, and he's also going
Speaker 1: to comment on why he prefers to be a small issue,
Speaker 1: because I thought maybe after that he would just go
Speaker 1: and sort of join black Rock or or Vanguard or
Speaker 1: something like that and just you know, take that road.
Speaker 1: But he's like, he likes to like to be the
Speaker 1: small guy. One of the best things I thought that
Speaker 1: actually came out of the Hack fiasco is there's now
Speaker 1: a federal rolling showing through the through the courts that
Speaker 1: actually a white label client does have protections in this industry,
Speaker 1: and before it was an unknown and we hadn't had
Speaker 1: to deal with this issue before. So although there was
Speaker 1: a lot of questions and possible concerns, if anything, I
Speaker 1: feel like this is a huge win for the overall
Speaker 1: ETF industry as well as for white label clients and
Speaker 1: just talk a little bit about the role of a
Speaker 1: small issue where it seems so hard from the outside
Speaker 1: looking in, Um, you know, why not just joined a
Speaker 1: big firm and live a comfortable life. You're You're right,
Speaker 1: there's absolutely nothing easy about being a small issue or
Speaker 1: and going off on your own. However, it allows you
Speaker 1: to partner with the partners that you want to work with,
Speaker 1: allows you to push forward the ideas that you believe
Speaker 1: in it, and allows you to shape your organization the
Speaker 1: way you think an organization should be structured. And I
Speaker 1: think that freedom and allowance gives you the ability to
Speaker 1: create something truly different. And that's why I'm thrilled to
Speaker 1: be able to be an independent insut or. Did anybody
Speaker 1: on that panel said that say that they weren't thrilled
Speaker 1: to be an independent initiator? No, but they expressed challenges
Speaker 1: like when you come out with a product and then
Speaker 1: black Rock or Spider launch is something very similar for
Speaker 1: half the cost, that's a bummer, and that product has
Speaker 1: a better likelihood of getting onto a platform that like
Speaker 1: a Merrill or ubs has And so sometimes the small
Speaker 1: guys are just left out of the distribution system and uh,
Speaker 1: it's a it's a rough road. I feel for them,
Speaker 1: and I tend to lean indie. That's why I picked
Speaker 1: an indie fund for my best new et F pundit
Speaker 1: to SmackDown Um, I think I did that go well,
Speaker 1: I didn't win, but I think I made a case,
Speaker 1: and I got a couple of emails saying, you you
Speaker 1: made a good point, but did you place in the
Speaker 1: top three. I don't think so. I think I'm in
Speaker 1: the I'm in the middle. Usually look this this indie
Speaker 1: the best pundit SmackDown. I think it really favors moments,
Speaker 1: an improvisational comedy. The person who one was amazing. I
Speaker 1: don't know if FORR. E. T F was the greatest ever.
Speaker 1: It's TDV. It's like a tech dividen fund. But she
Speaker 1: had a great moment on stage, and she was very likable,
Speaker 1: and the presentation is huge, and you know she nailed it.
Speaker 1: But that said, I'm proud of what I presented because
Speaker 1: I picked the uranium minor et F and I basically
Speaker 1: premised that, look, people want to fight climate change, but
Speaker 1: they don't want to give up their lifestyles, and wind
Speaker 1: and solar won't cover the difference, so you need something
Speaker 1: to fill it in. And as Bill Gates said, this
Speaker 1: is carbon free, it's scalable, and it's seven So if
Speaker 1: there's even a little public consensus or embracement of nuclear power,
Speaker 1: then this thing should shoot up. And I like the
Speaker 1: fact that it launched after a horrible back test. The
Speaker 1: sectors down in the past eight years, and so it
Speaker 1: has a lot of room to run. So I wanted
Speaker 1: to just be on the record presenting this thing ahead
Speaker 1: of time, because if it starts to go up, people
Speaker 1: gonna go Yeah. Eric was first on that, and if
Speaker 1: it doesn't, nobody will probably even bother to like say anything.
Speaker 1: Katie Claire, did you guys meet any India issuers that
Speaker 1: you were impressed by? Well, I met Andrew, which who
Speaker 1: had spoken with before, but I got to talk with
Speaker 1: him some more, and um, really interesting marketing there. I
Speaker 1: think it just really speaks to how people are trying
Speaker 1: to stand out. I think he had astronaut ice cream
Speaker 1: or something. Yeah, the guy that we just heard cream. Yeah,
Speaker 1: he had a huge green blow up alien with a
Speaker 1: UFO shirt on. He wore these huge orange sneakers that
Speaker 1: were the first ever Nike NASA collaboration, so the sneakers
Speaker 1: you wear in space, and then he had space ice cream.
Speaker 1: He went all out. Who's next? Yeah, next up? We
Speaker 1: got James mortier As who's from GMO. Sometimes they have
Speaker 1: economists and people like that speak. It's not an E
Speaker 1: T F kind of conversation. But what he said I
Speaker 1: thought was fascinating. He thought the sixty forty portfolio was
Speaker 1: in trouble, which is like a mainstay of your management.
Speaker 1: Are the advisors there probably have something like a sixty forty.
Speaker 1: So I thought this was interesting to hear him challenge
Speaker 1: that this is going to have a rough road going forward.
Speaker 1: One of the big challenges I think the people is
Speaker 1: the sixty forty is simply not going to work the
Speaker 1: way that people expected to work. And that's a real challenge.
Speaker 1: And we are going to end up with a portfolio
Speaker 1: that is a very long way short of the expectations
Speaker 1: that people have from their investments. And what are some
Speaker 1: ways to like an alternative or in your kids you
Speaker 1: like E M value, Yes, so I think you can
Speaker 1: do better than the s and right now that that
Speaker 1: involves owning things like emerging market values stocks which are
Speaker 1: beaten up and loathed but offer the chance of a
Speaker 1: decent equity like return. So I think you can still
Speaker 1: board a portfolio that makes sense um and will give
Speaker 1: you the kind of returns you need, but it will
Speaker 1: look incredibly unconventional, and that's why most people will will
Speaker 1: balk at it. They just won't be able to stomach
Speaker 1: the visual perception of what they're doing. Katie, what do
Speaker 1: you what do you make of the death of sixty
Speaker 1: forty conversation? You know, it's something that you hear every
Speaker 1: once in a while, especially when markets are really going
Speaker 1: down the toilets. But I haven't heard anyone, you know,
Speaker 1: give me a really full throated uh case for why
Speaker 1: it would die. So it was really interesting to hear
Speaker 1: James's comments. And I think part of it is that
Speaker 1: remember two um, stocks and bonds pretty much both felt
Speaker 1: the only thing that worked was cash. That was called
Speaker 1: the everything down and then everything goes up. If everything
Speaker 1: starts going up and down sixty forty, there is no
Speaker 1: more diversification. So what he's saying is look out of that.
Speaker 1: And I was at an alternative panel that talked about
Speaker 1: that too, said maybe you should look for a long
Speaker 1: short strategy. Something has an alternative stream, so in case sixty,
Speaker 1: in case both of those start falling, you have something.
Speaker 1: His big pitch though, was e M value. He thinks
Speaker 1: emerging markets values at P of ten, and that is
Speaker 1: a great place to be right now. I'm not saying
Speaker 1: to use it, But if you are interested, the ticker
Speaker 1: that would do that is p X at p x H.
Speaker 1: It's pretty much the only E M value et F
Speaker 1: out there. Claire, how are you doing on on all
Speaker 1: your kers? Who? Here's a question we usually ask, and
Speaker 1: I'm gonna ask it now. What's your new favorite ticker? Oh?
Speaker 1: That's a good one. Um. I like some of the
Speaker 1: cyber ones. I like Hack. That's kind of a fun one.
Speaker 1: It feels like alphabet soup. I'm still trying to get
Speaker 1: my head around all of them. Hack is like an
Speaker 1: all time Yeah, it's a top five easily by by
Speaker 1: anybody's standards. It's a great one. Eric, Uh, we got
Speaker 1: another clip. Yeah. So um. Sometimes you go to these
Speaker 1: events and you run into actual like founding father types, legends,
Speaker 1: and you know, unless you know them, you may not
Speaker 1: even know you're next to somebody. Here's Jay Baker who
Speaker 1: worked at AMX back in the day, and he was
Speaker 1: tasked with trying to get more volume and spy because
Speaker 1: nobody was trading it. It almost failed and the whole
Speaker 1: industry would never happen. And this is the guy that
Speaker 1: kind of saves spy. And we had Jay Baker on
Speaker 1: our special trillions about the creation actually of spy. Yeah,
Speaker 1: if you go and google the et F story, it's
Speaker 1: a great six part series if you want to learn more.
Speaker 1: But at that point it was in an American Stock
Speaker 1: Exchange products. State Street wasn't involved. They did get involved
Speaker 1: with the marketing later and they did a great job,
Speaker 1: but in the beginning it was moving slowly. So what
Speaker 1: happened was a senior executive at the American Stock Exchange
Speaker 1: approached me and Steve Bloom and said, look, spiders moving
Speaker 1: a little bit slowly. I went to do institutional marketing.
Speaker 1: I want you to get a hundred million in the
Speaker 1: Spider within six months. So we went around to all
Speaker 1: the different um institutional firms. There was some interest, you know,
Speaker 1: there was interest to an extent, but it was interest
Speaker 1: a little bit of a shrug of the shoulders. So
Speaker 1: we went to one in particular called Die with Securities,
Speaker 1: and we answered about two thousand questions that they had
Speaker 1: about the product, and they ended up basically creating two
Speaker 1: hundred fifty million dollars worth the spider spiders at forty
Speaker 1: five so this is several million shares. And the reason
Speaker 1: they did it was they found an opportunity, and the
Speaker 1: opportunity was people wanted to short spider, so they basically
Speaker 1: created hedge, created two D fifty million, sold short two
Speaker 1: fifty million, SMP five hundred future, so they were hedge
Speaker 1: whether the market went up or down five points and
Speaker 1: loaned out the spider. I didn't ever hear that before. Yeah,
Speaker 1: it's tells you the early days of ets, they were
Speaker 1: for institutions to do trading. They were supposed to be
Speaker 1: like a better version of the futures contract. Then black
Speaker 1: Rock or Barclays came along and saw the retail opportunity.
Speaker 1: But either way, I just like these stories where it's
Speaker 1: like a Silicon Valley story where nothing's going right, but
Speaker 1: you just hustle and then you get a couple of
Speaker 1: breaks and and then boom, you get that tipping point.
Speaker 1: And this is you know before that for sure, how
Speaker 1: much hustle was there on the floor of this place.
Speaker 1: There's lots of running around, and not just in the
Speaker 1: actual run. It was saw some people kind of sweaty
Speaker 1: trying to get to all their meetings. But I think
Speaker 1: it's cool to you know, being new to the space,
Speaker 1: it's really neat to be in the same room with
Speaker 1: people who are here from the beginning, and I think
Speaker 1: it's also a reminder of how kind of young the
Speaker 1: area is and how it's still up and coming. Yeah,
Speaker 1: it was a great mix of people who you know,
Speaker 1: were around at the start, you know, when the first
Speaker 1: ETFs came out, like for example, we spoke to John Jacobs,
Speaker 1: who was one of the creators of the queues and
Speaker 1: then you know there's a lot of young people such
Speaker 1: as clear as myself, people who are very new to
Speaker 1: the space. And do you have those hustlers there? And
Speaker 1: we're going to close it out with We're gonna close
Speaker 1: with this very unique site called jobs and ETFs. Anybody
Speaker 1: out there is looking for and by the way, people
Speaker 1: do come to this without jobs to maybe, like you know,
Speaker 1: find somebody. You know. There is definitely like networking, and
Speaker 1: I've seen people find jobs here. So here we have
Speaker 1: Claude Matrosh, who is one of the people who runs
Speaker 1: Jobs and et F, and I just asked them a
Speaker 1: little bit about you know what this site does and
Speaker 1: you know how many jobs are on there, and it's
Speaker 1: it's really a great resource. At the moment, we have
Speaker 1: over a hundred jobs listed on the website. Um. Most
Speaker 1: of these jobs comes from companies that want so expand
Speaker 1: their teams or expand their their their portfolios. Yeah, I
Speaker 1: mean a hundred jobs and I've gone on there. They're
Speaker 1: from big companies, small companies. They're in all over the world. Um.
Speaker 1: You know again, sometimes I feel like it's the nineties
Speaker 1: economy and sod T t t F s UM. Again. The
Speaker 1: revenue growth isn't major because of the price compression, but
Speaker 1: the assets are flowing here. It's always leading in assets,
Speaker 1: and so there's a ton of jobs coming across. And
Speaker 1: what he specializes in is getting these new companies that
Speaker 1: are coming over like a t row and trying to
Speaker 1: fit like who from the E T F rold might
Speaker 1: come over. So we see this move a lot where
Speaker 1: the head of capital markets at like say a Spider
Speaker 1: or a Vanguard will go over to lead like an
Speaker 1: older mutual fund company that just happened with Tim Coin
Speaker 1: left Spider to go to t Row and leave that up.
Speaker 1: And so this is a trend we've seen and he's
Speaker 1: kind of helps facilitate that. I am shocked that we
Speaker 1: haven't talked about this before. This seems like a great episode.
Speaker 1: I know we should have him in Um and his
Speaker 1: partner is really cool too. I had a eight dinner
Speaker 1: with him and had one too many Japanese old fashions.
Speaker 1: I think they'd be good guests, all right. So the
Speaker 1: other part of jobs, I guess you could say, is
Speaker 1: like there are after parties where you get to like,
Speaker 1: you know, meet people. What kind of afterparties, um, other
Speaker 1: than you know, just consuming too much. There's the one
Speaker 1: the conference has by the pool bar, and I think
Speaker 1: everybody goes there. But then there's like dinners and stuff.
Speaker 1: So I went to BBH dinner on the first night,
Speaker 1: and then I on the second night, I went to
Speaker 1: an informal one by Ryan Curland organized from Alpha architect
Speaker 1: which had a lot of fint with there. And that
Speaker 1: was an a Mexican restaurant Marguerite Deville Aboup, you know,
Speaker 1: two miles down the road. Both fun. I didn't do
Speaker 1: a kind of partying, but I enjoyed the cocktail hours
Speaker 1: by the beach and just I think we should just
Speaker 1: pick up the Bloomberg New York office moving for a while, Katie.
Speaker 1: It was a great scene. Um. Yeah, the hotel party
Speaker 1: that was great. And I went to one of the
Speaker 1: parties held by Jane Street. The name of the restaurant
Speaker 1: escapes me, but one of the beauties of being in
Speaker 1: Florida in January. Even though I didn't go outside that much,
Speaker 1: I did feel like it was okay to order an
Speaker 1: Appall Spirits. You know, it was okay to drink a
Speaker 1: summer drink that I totally agree. You're and you're in Hollywood, Claire, Katie,
Speaker 1: thanks for joining us and Drillion. Thanks for listening to
Speaker 1: Trillians until next time. You can find us on the
Speaker 1: Bloomberg terminal, Bloomberg dot com, Apple Podcast, Spotify, and wherever
Speaker 1: else you'd like to listen. We'd love to hear from you.
Speaker 1: We're on Twitter, I'm at Joel Webber Show. He's at
Speaker 1: Eric Faultiness. You can find Katie at k Griefield k
Speaker 1: g R E I F E L D and Clear
Speaker 1: Valentine's at CFB Underscore eighteen. This episode of Trillions was
Speaker 1: produced by Magnus Hendrickson and edited by Darrelle Dillard. Francesco
Speaker 1: Levie is the head of Bloomberg Podcast by